The mother of former FTX CEO Sam Bankman-Fried is a law professor and Democratic fundraiser who once wrote an essay decrying “personal responsibility.”
The cryptocurrency platform filed for bankruptcy last week after users discovered that adjacent trading firm Alameda Research had allegedly been using consumer holdings from FTX to make investments. Following the incident, in which billions of customers’ dollars may have been stolen, the life of Bankman-Fried has come under scrutiny.
Barbara Fried, the mother of Bankman-Fried, is a law professor at Stanford University who has written about “questions of distributive justice” in areas such as tax policy and political theory. She also runs a political action committee called Mind the Gap, which fundraises for the Democratic Party among executives in Silicon Valley. The organization raised nearly $4 million in the most recent midterm election cycle, according to data from Open Secrets, which showed that FTX Director of Engineering Nishad Singh made a $1 million contribution.
Facebook co-founder Dustin Moskovitz and former Google CEO Eric Schmidt have also backed the organization, according to a report from Vox, which described one of the entity’s purposes as avoiding “public detection.”
Bankman-Fried himself contributed nearly $39 million to various campaigns during the recent midterm elections, with 99.6% of funds benefiting Democratic candidates, according to more data from Open Secrets, which listed him as the nation’s sixth-largest individual midterm donor. He was previously the second-largest contributor to President Joe Biden amid his successful bid for the White House.
In the days since FTX imploded, a 2013 article penned by Fried in the Boston Review claiming that the notion of personal responsibility has “ruined criminal justice and economic policy” began circulating online. “Public reactions to wrongdoing have been studied most extensively in the context of crime,” she asserted. “Researchers have found that peoples’ evaluations of serious wrongfulness vary significantly across social conditions and individuals. Tellingly, the more information people have about the context of the crime, the person who committed it, and the circumstances he or she came from, the more nuanced are their views of moral responsibility.”
Fried said that harm reduction policies are meant to “reduce future harm at a tolerable cost to all of us, wrongdoers included, by influencing wrongdoers’ future choices through rehabilitation, more carefully calibrated deterrence, and, when necessary, isolation from society.” She nevertheless insisted that her views do not “coddle criminals.”
Whether Bankman-Fried himself will spend time in prison has yet to be determined. The former billionaire is presently located in the Bahamas under supervision from law enforcement, who may transfer him to the United States for bankruptcy proceedings and questions from policymakers. The two nations signed an extradition treaty in 1990.
Joseph Bankman, the father of Bankman-Fried, also works as a law professor at Stanford University and has drafted legislation for Sen. Elizabeth Warren (D-MA), one of the most ardent skeptics of cryptocurrency in the federal government, according to a report from Fortune. Linda Fried, the aunt of Bankman-Fried, is the dean of Columbia University’s Mailman School of Public Health and a co-chair of the World Economic Forum’s Global Future Council on the Future of Human Enhancement.
John Ray III, the lawyer who is overseeing FTX amid bankruptcy proceedings, said that Bankman-Fried and his associates ran an extraordinarily mismanaged company. “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” he wrote. “From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”
Executives may have spent corporate dollars on purchasing luxury real estate listed under their own names. Leadership at the cryptocurrency venture lacked disbursement controls “appropriate for a business enterprise,” allowing executives to “purchase homes and other personal items for employees and advisors” in the Bahamas, according to Ray.
