“Behind the FTX Collapse: A Father’s Story of Survival”: Joe Bankman
What happens when your son becomes the most notorious figure in financial crime history, and you’re left to navigate the wreckage as both a father and an attorney?
When I sat down with Joe Bankman, I knew I was speaking with someone who had lived through an unimaginable nightmare. Joe isn’t just any law professor at Stanford, he’s the father of Sam Bankman-Fried, the former FTX founder who was sentenced to 25 years in federal prison. But this conversation wasn’t about cryptocurrency or courtroom drama. It was about what happens to a family when their world implodes overnight.
Joe has spent his career as a respected tax law scholar and clinical psychologist, even coming within one vote of revolutionizing tax filing in California. None of that mattered when the federal government turned its full attention to his son. The man who once helped shape policy suddenly found himself completely powerless.
”It’s Like You’re Walking Along the Beach and a Tidal Wave Hits You”
The collapse of FTX in November 2022 didn’t just destroy a cryptocurrency empire, it shattered a family. Joe’s description of that moment still gives me chills: “It’s like you’re walking along the beach and a tidal wave hits you. And you look out and one of your family members is swept to see. And everybody, your house is ruined. All your possessions are gone.”
Before the collapse, Joe and his partner Barbara Fried were living their own fulfilling lives as Stanford professors. They were proud of Sam’s philanthropic work and business success, even if they didn’t fully understand cryptocurrency. “When people talked about crypto, I thought it was like cryptography,” Joe admitted. But understanding the business became irrelevant when their son’s world, and theirs, crumbled.
The family made a crucial decision early on: they stopped reading the news. With hundreds of articles being published, Joe realized that consuming media coverage wouldn’t help them survive to the next day. It’s a strategy I’ve seen work for other families in crisis, creating a protective bubble where you can control what enters your space.
When Your Own Government Becomes Your Adversary
Perhaps the most haunting part of our conversation was Joe’s description of sitting through Sam’s month-long trial. As both an attorney and a father, he understood the legal process intellectually, but nothing prepared him for the emotional reality. “Until you see the power of our government working against you, you have no idea how powerful it is,” he told me. “It’s like however powerful you might think you are, you are nothing compared to that.”
Joe had to watch federal prosecutors spend over a month painting his son as a monster while he sat silently in the gallery, surrounded by reporters documenting his every reaction. The most heartbreaking detail? Sam was delivered to court at 5 AM each day, kept in a holding cell, and marched out in handcuffs. Joe’s only chance to connect with his son was maybe catching his eye across the courtroom.
Even Stanford Law School, where Joe had taught for years, didn’t want him teaching during the crisis. The institution he’d served faithfully suddenly saw him as a liability. Banks closed their accounts without explanation. The very systems that had supported their middle-class life suddenly turned against them.
The Hidden Cruelties of the Prison System
What struck me most was Joe’s description of trying to visit Sam in prison. The bureaucratic nightmare that families face isn’t widely understood by the public. Visits are limited to half a day per week, with rigid dress codes that guards interpret inconsistently. Joe and Barbara have been turned away after driving 400 miles to Los Angeles, sometimes for paperwork issues that weren’t their fault.
“Sometimes you have to leave to change clothes,” Joe explained, describing how approved clothing suddenly becomes unacceptable at the guard’s discretion. Meanwhile, Sam doesn’t know why his parents don’t show up, left to wonder if something terrible has happened to them.
The cruelest irony? Joe believes these aren’t malicious guards, they’re understaffed people following impossible rules. But the system makes it harder, not easier, for families to maintain crucial bonds during incarceration.
When I asked Joe for his biggest takeaway from this nightmare, his answer revealed the heart of a man who refuses to become bitter: “I think it’s people versus institutions. This hasn’t at all hurt my faith in people. In fact, I’m more pro-people than ever before. A lot of people under terrible circumstances have time to be kind.”
Joe’s story reminded me that behind every headline about white-collar crime, there’s a family trying to survive their own version of hell. His grace under unimaginable pressure, his continued dedication to teaching and his patients, and his refusal to let institutional failures poison his faith in human kindness, these are the real lessons from his nightmare.