Joseph Bankman, the father of troubled former crypto entrepreneur Sam Bankman-Fried, allegedly held an advisory role at a top Democratic dark money network, an arrangement a watchdog says "deserves serious scrutiny."
The allegation appeared in a lawsuit Bankman-Fried's former company, FTX, filed against his parents Monday after they allegedly "exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars," the company's lawyers wrote. FTX is seeking to recoup money to pay owed debts.
Bankman-Fried's father, a Stanford University law professor, "sat on the advisory board of Arabella Advisors," according to the complaint.
Arabella Advisors, a Washington, D.C.-based consulting firm, manages a nonprofit network that provides fiscal sponsorship to dozens of left-wing groups.
A lawsuit filed Monday by Sam Bankman-Fried's former company, FTX, against his parents linked Joseph Bankman to a top Democratic dark money network. (Charles Guerin/Abaca for Fox News Digital)
The funds it manages, which include the New Venture Fund, Sixteen Thirty Fund, Windward Fund and Hopewell Fund, collectively raise over a billion dollars in anonymous cash annually and, in turn, also shower liberal causes and initiatives with money nationwide.
"You can tell a lot about someone by the company they keep, so it's truly not surprising to learn about the ties between the Arabella Advisors network and the Sam Bankman-Fried scandal," Caitlin Sutherland, the executive director of Americans for Public Trust, told Fox News Digital. "This arrangement deserves serious scrutiny, especially the extent to which SBF tried to leverage his political influence through the most powerful liberal dark money network in America."
Arabella Advisors spokesperson Steve Sampson said that Bankman "never had any role" at the firm. For-profits such as Arabella Advisors typically do not have an advisory board, and Sampson did not answer if the consultancy had one.
According to court documents, FTX had previously wired $8 million to the Arabella-managed New Venture Fund. It's possible the attorneys suing Bankman and his wife, Barbara Fried, had mistakenly written that he holds an advisory role at the firm when he may have potentially held it at the New Venture Fund or a project housed at the New Venture Fund.
The New Venture Fund did not answer if Bankman held an advisory role at the fund or at a project it managed. A spokesperson said the fund "worked with the FTX Foundation to provide administrative services for some of its grantmaking."
"In early 2022, NVF issued grants from a project advised by Mr. Bankman and affiliated with the FTX Foundation, all of which went to carefully vetted charitable organizations addressing environmental challenges and hunger," the fund's spokesperson continued. "This is a pending legal matter, and the remaining money will be returned based on resolution of that process."
Sam Bankman-Fried leaves federal court in New York City Dec. 22, 2022. The former CEO of FTX and Alameda had been released on $250M bail. (Charles Guerin/Abaca for Fox News Digital)
Parker Thayer, an investigative researcher at the Capitol Research Center, said the fund's promise to return the "ill-gotten gains of FTX" comes "too little too late" and is a "serious indictment of their credibility, particularly as they face other lawsuits alleging discrimination and retaliation against employees who voiced concerns about unethical partisan practices that might have violated IRS law."
An FTX attorney and Bankman did not respond to requests for comment.
"The allegations in the lawsuit against Sam Bankman Fried's parents of reaping millions of dollars from their son's bankrupt cryptocurrency business and funneling dark money to liberal causes through Arabella suggests that both of them — law professors at Stanford University — may be guilty of conspiracy, banking and election law crimes," Paul Kamenar, counsel to the National Legal and Policy Center, told Fox News Digital.
FTX filed for bankruptcy in November when the firm ran out of money after the cryptocurrency equivalent of a bank run. Customers simultaneously tried to withdraw their assets over doubts about the company's financial strength. Bankman-Fried is facing seven counts, including fraud and money laundering.
Sam Bankman-Fried is facing seven counts, including fraud and money laundering. (Ting Shen/Bloomberg via Getty Images)
Bankman-Fried was a prolific supporter of Democratic causes. During the midterm election cycle, he was the second-largest contributor to liberal political action committees and organizations, behind only liberal financial magnate George Soros.
Bankman-Fried's philanthropic collective, the FTX Foundation, which was committed to fighting climate change and other global health issues, has since disintegrated.
The group has supported the CarbonPlan and Giving Green, two climate initiatives dedicated to achieving a so-called green transition from fossil fuels, and the Good Food Institute, an organization pushing the expansion of plant-based meat.
Fox News Digital's Louis Casiano and Thomas Catenacci contributed to this report.
Joe Schoffstall is a politics producer/reporter for Fox News Digital. Story tips can be sent to