FTX Seeks to Question Sam Bankman-Fried’s Family About Its Wealth

Steven Church, Bloomberg News

Sam Bankman-Fried, co-founder of FTX Cryptocurrency Derivatives Exchange, departs from court in New York, US, on Tuesday, Jan. 3, 2023. Bankman-Fried pleaded not guilty to criminal charges Tuesday and is set to face a trial in October, a courtroom showdown likely to be one of the highest-profile white-collar fraud cases in recent years. Photographer: Stephanie Keith/Bloomberg , Photographer: Stephanie Keith/Bloomberg

(Bloomberg) -- The parents and brother of alleged crypto fraudster Sam Bankman-Fried should be forced to answer questions and provide financial documents about their personal wealth and any money they may have gotten from FTX, the bankrupt firm he founded, lawyers said in a court filing.

FTX asked a judge for permission to question, under oath, Bankman-Fried’s family and a handful of the company’s former top executives as part of a hunt for hidden assets that could be used to repay creditors owed billions of dollars.

The court filing shows the aggressive approach that FTX advisers are taking to recover any money that Bankman-Fried may have inappropriately handed out. The company was heavily involved in lobbying elected officials and making campaign donations. Federal prosecutors have charged Bankman-Fried with fraud for his role in the collapse of FTX, which filed for bankruptcy in November.

Joseph Bankman and his wife, Barbara Fried, were involved in their son’s company, according to the court filing. Joseph Bankman, a law professor at Stanford Law School, offered tax advice to FTX employees and helped recruit the company’s first lawyers, the court filing said, citing media reports. Fried allegedly founded a political action committee that got money from FTX and its top executives, according to the filing.

The brother, Gabriel Bankman-Fried, founded an organization that lobbied members of the US Congress from a multimillion dollar property near the US Capitol, according to the filing, which cited news stories.

Joseph Bankman, Barbara Fried and Gabriel Bankman-Fried did not immediately respond to emails seeking comment.

US Bankruptcy Judge John Dorsey must approve the request before FTX lawyers can send subpoenas to Bankman-Fried’s family requiring them to submit to questioning and to provide documents.

The case is FTX Trading Ltd., 22-11068, US. Bankruptcy Court for the District of Delaware.