Request important information
Bankrupt cryptocurrency exchange FTX has received approval from the bankruptcy court in the state of Delaware to subpoena insiders, including former CEO Sam Bankman-Fried, as witnesses on the 8th.
The purpose of the subpoena is to request information or documentation regarding how you have used FTX or customer assets. Recipients include Caroline Ellison, former CEO of sister company Alameda Research, FTX co-founder Gary Wang, and the parents of former CEO Bankman-Fried.
FTX is committed to maximizing stakeholder value on bankruptcies, and has long argued that insider summons is critical to that end. Some insiders are cooperative and others are not, he said.
The company will subpoena insiders and ask them to provide information and documents regarding FTX assets, transactions, accounts, business operations, personal assets, records of communications, etc.
FTX has also obtained authorization to subpoena not only insiders, but also third parties involved.
connection: Severe shock in the virtual currency market, summary of Alameda shock and FTX turmoil
FTX filed for bankruptcy under Chapter 11 of the US Bankruptcy Code in November last year. After that, the new CEO John J. Ray III, who has experience overseeing the bankruptcy of the US energy company Enron, etc., has taken the lead in proceeding with the bankruptcy process, including checking the financial status of FTX.
What is Chapter Eleven
A reconstruction-type bankruptcy legal system similar to the Civil Rehabilitation Law of Japan. The company will be restructured by reducing debts while continuing to operate. Debt collection will be suspended after the application, and the debtor will work on debt consolidation and formulate a reconstruction plan within 120 days in principle.
Mr. Ray explained that he has been involved in business restructuring for more than 40 years since becoming CEO, but he has never seen a situation like FTX. He noted a lack of reliable financial information, a lack of systemic integrity and regulatory oversight. He said the company was run by a small group of inexperienced and potentially problematic people, calling it an unprecedented bankruptcy.
connection: Part of FTX’s reality revealed, new CEO submits documents to court
As for FTX insiders, former CEO Sam was released on bail after being arrested and placed under close surveillance at his parents’ home. Earlier this year, former CEO Sam pleaded not guilty to eight criminal charges, including fraud.
Meanwhile, Ellison and Wang pleaded guilty to criminal charges, including conspiracy to commit wire fraud against FTX customers. Both are said to be cooperating with the prosecution.
connection: Former CEO of FTX Sam, claiming innocence in arraignment