Sam Bankman-Fried Lawyers Move to Quash Subpoena: Undue Burden

Summary of the Article

  • Sam Bankman-Fried’s lawyers are attempting to quash a subpoena issued by Voyager Digital, claiming that it is procedurally deficient and potentially violates Bankman-Fried’s Fifth Amendment rights.
  • The subpoena was served on his mother, Barbara Fried, rather than Bankman-Fried himself.
  • Lawyers for Voyager’s creditors are looking into the attempt of FTX exchange (which was run by Bankman-Fried) to bail out the crypto lender when it filed for bankruptcy protection in July.

Bankman-Fried’s Lawyers Move To Quash Subpoena

Sam Bankman-Fried’s lawyers have moved to quash a subpoena issued by Voyager Digital. The subpoena was intended for Bankman-Fried but served on his mother, Barbara Fried. The attorneys claim that this is procedurally deficient and presents an undue burden as well as potentially violating Bankman-Fried’s Fifth Amendment rights.

Voyager Creditors Investigating Attempt To Bail Out Crypto Lender

Voyager Digital’s creditors are investigating an attempt made by the FTX exchange (which was run by Sam Bankman-Fried) to bail out crypto lender Voyager Digital when it declared bankruptcy protection in July. The specific type of subpoena used is called a Rule 45 subpoena which requires documents for inspection and copying from the named individual. Substitute service is not permitted with this type of subpoena.

Subpoena Places Undue Burden On Bankman-Fried

The filing states that the subpoenas places an undue burden on Sam Bankman-Fried as it gives him only one business day to produce 49 separate documents and only four days notice of appearance. Compliance with this could also violate his Fifth Amendment rights under U.S Constitution which protects against self incrimination as all requests call for documents relevant to criminal case where loans from/to Alameda are at stake.

„Procedurally Deficient“ Subpoena Moves To Be Quashed

In response, Sam Bankman- Friedman’s legal counsel believes that leaving the said subpoena in possession of Barbara Fried does not satisfy the Rule 45 requirement for personal service thus making it „procedurally deficient“. They further add that substitute service is generally not permitted to serve Rule 45 subpoenas either; hence they ask for these proceedings be quashed immediately due its inability to meet procedural requirements, placing undue burden and potential violation of Fifth Amendment rights.


Therefore, Sam Bankson Friedman’s lawyers have submitted their motion in court asking it be quashed due its procedural deficiencies, potential violation of Constitutional Rights and imposing too much burden on Mr Bankson Friedman

Bitcoin, Ether Slide on Inflation, Regulator Woes

• Bitcoin and Ether prices dropped on Monday due to investor concern over inflation data and stablecoin regulation.
• The New York Department of Financial Services ordered Paxos to stop minting new Binance USD tokens, resulting in a drop in value against its rival tether (USDT).
• Investors will be watching the U.S. Federal Reserve’s consumer price index (CPI) report tomorrow to determine the size of the central bank’s next interest rate hike.

Cryptocurrency Prices Drop

Bitcoin and ether, two of the largest cryptocurrencies by market capitalization, both slid on Monday as investors grew concerned with inflation data and stablecoin regulation. Bitcoin was down 1.4% trading at around $21,640 while ether fell below $1,500.

New York Department of Financial Services Orders Paxos to Stop Minting BUSD Tokens

The New York Department of Financial Services issued an order to Paxos mandating that it stop minting new Binance USD tokens (BUSD). This resulted in BUSD falling to 0.9950 cents against its rival tether (USDT) on the Binance exchange according to crypto data firm Kaiko.

U.S Federal Reserve’s Consumer Price Index Report

Investors are keeping an eye out for Tuesday’s consumer price index (CPI) report from the U.S Federal Reserve which is expected to give insight into how monetary policy impacts inflation and possibly predict the size of the central bank’s next interest rate hike. The CPI currently stands at 6.5%, indicating some downward momentum that has pleased riskier asset markets but Fed governors remain worried about over-tightening money supply and causing harm to economic growth.

Kraken Agrees To Pay $30 Million Fine in SEC Settlement

Bitcoin experienced significant drops this past week after Kraken agreed to shutter its staking service in the United States and pay a $30 million fine as part of a settlement with the U.S Securities and Exchange Commission (SEC). BTC had recently changed hands above $24,000 but now analysts are predicting that it may find support at $20,000 in upcoming weeks due to recent events impacting market sentiment negatively.


Overall cryptocurrency markets have been bearish this month with bitcoin losing roughly a quarter of its January gains and ether dropping below $1500 as investors worry about factors such as inflation data, stablecoin regulations and restrictions imposed by government agencies like the SEC on exchanges like Kraken could continue driving prices lower in coming weeks ahead of Tuesday’s CPI report from the Federal Reserve which could provide more clues as to future monetary policy decisions taken by central banks globally affecting crypto markets going forward

US Gov’t Opposes Subpoenas of FTX Founder, Fam

• The U.S. Trustee has opposed a plan by FTX and creditors to subpoena its founder Sam Bankman-Fried, his family and senior staff of the bankrupt crypto exchange.
• This proposal would duplicate any independent examination of the exchange’s downfall, said U.S. Trustee Andrew Vara in a legal filing made Thursday.
• FTX filed for bankruptcy protection on Nov. 11, with new CEO John Ray replacing Bankman-Fried who resigned as CEO the same day.

FTX Files for Bankruptcy

On November 11th, 2020, FTX filed for bankruptcy protection and its founder Sam Bankman-Fried resigned as CEO to be replaced by restructuring expert John Ray.

U.S Trustee Opposes Subpoenas

Proposals for FTX and a committee of its creditors to subpoena Bankman-Fried, his immediate family and senior staff have been opposed by the U.S Trustee – a branch of the Department of Justice dealing with bankruptcy – due to potential duplication of an independent examination into the exchange’s downfall which has yet to be appointed by a court hearing set for Monday February 3rd 2021.

Key Witnesses Not Cooperating

FTX stated that potentially key witnesses are not cooperating with requests for information such as co-founder Gary Wang and head of FTX’s trading arm Alameda Research, Caroline Ellison who have both expressly declined providing requested information about more than $300 million allegedly misappropriated from the company before its collapse.

U.S Government Objects Proposal

The U.S Government objected this proposal stating that plans set to be discussed at Wednesday’s hearing would duplicate any independent examination if an examiner is appointed after Monday’s hearing; thus they have ‘an obligation to prevent unnecessary expenditures in the administration of an estate.‘


In conclusion, FTX filed for bankruptcy on November 11th 2020 and proposals put forward by creditors to subpoena founder Sam Bankman-Fried have been objected by U.S Government due to potential duplication with any future independent examinations which may take place following Monday’s hearing into appointing an examiner if necessary