John Reed Stark, a former SEC attorney, recently commented on the absence of charges against Sam Bankman-Fried’s parents for their alleged role in their son’s misconduct.
In a post on his X platform, Stark expressed surprise that the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) have not named Allan Bankman and Barbara Fried as defendants alongside their son.
Stark, who spent nearly 20 years at the SEC leading dozens of prosecutions, said that in the past, the agency would have likely named SBF’s parents as “relief defendants” – individuals who received illicit proceeds from another’s wrongdoing.
The FTX bankruptcy proceedings have accused Bankman and Fried of discussing transferring assets to themselves despite knowing of FTX’s insolvency. The couple also allegedly directed charitable contributions on behalf of FTX.
Beyond SBF’s parents, Stark criticized the DOJ’s lack of crypto-related criminal cases compared to nearly 200 enforcement actions brought by the SEC. He suggested this inaction emboldens industry players to dismiss the civil penalties.
Stark argued the DOJ needs to step up with criminal prosecutions and prison sentences to deter misconduct. In his view, the threat of DOJ action would make “crypto-grifters” think twice in a way that SEC injunctions and fines alone do not.