• 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