The judge overseeing the bankruptcy case of the FTX exchange has accepted a motion allowing debtors of the company to request subpoenas to obtain information and documents from former colleagues and relatives of Sam Bankman-Fried.
In a brief filed on February 8, Judge John Dorsey stated that FTX debtors were authorized under bankruptcy court rules to issue subpoenas to certain persons “for the production of documents, electronically stored information, or things tangible”. The original motion filed Jan. 25 defined the target of the subpoenas as insiders who “do not currently cooperate with debtors to provide material information,” a list that includes Bankman-Fried, former Alameda Research CEO Caroline Ellison, the FTX co-founder Gary Wang and members of the immediate Bankman-Fried family.
“The debtors attempted to agree with all insiders to set a mutually agreed upon date, time, location, and scope of the filing,” the January 25 filing said. “To date, none of the insiders subject to this motion have agreed to provide the requested information.”
On February 8, Judge Dorsey granted a separate motion subpoenaing “relevant third parties” in connection with the discovery of a confidential investigation. The initial filing in January did not include the names of the third parties, but he added that they could “possess specific evidence critical to debtor asset recovery efforts and investigation” into $300 million in unauthorized transfers.
The bankruptcy court is exploring the possibility of assigning an independent examiner to the FTX case that works together with the debtors. Judge Dorsey is expected to rule on the matter at a hearing to be held on February 9.
In criminal court, Bankman-Fried faces eight counts related to alleged illegal transactions and movement of funds between FTX and Alameda. On February 7, Attorney for the Southern District of New York Damian Williams asked the court to stay the Securities and Exchange Commission and Commodity Futures Trading Commission civil proceedings against Bankman-Fried “until the conclusion of the parallel criminal case”.
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