FTX seeks permission to subpoena Sam Bankman-Fried, family and insiders

FTX bankruptcy lawyers are seeking permission to subpoena former CEO Sam Bankman-Fried, his family and top lieutenants at the collapsed crypto exchange, according to new court documents.

“Certain insiders are currently cooperating with the debtors to provide important information. But others are not, and thus authorization to issue subpoenas to those with the missing information is critical to the debtors’ and committee’s recovery efforts,” lawyers for the FTX debtors and the official creditors committee wrote in a joint motion. 

The filing names Bankman-Fried’s parents, Joseph Bankman and Barbara Fried, and his brother, Gabriel Bankman-Fried, saying the trio acted as his advisers. Lawyers are also targeting FTX co-founders Gary Wang and Nishad Singh, former Alameda Research CEO Caroline Ellison and Constance Wang, the former chief operating officer of FTX Trading Ltd. and co-CEO of FTX Digital Markets Ltd. 

Lawyers are seeking information and documents regarding FTX’s assets and business operations and the personal assets of FTX insiders, among other things. New FTX CEO John Ray III has previously said that FTX executives did not maintain proper business records, which has complicated his efforts to recover assets during the bankruptcy process. 

“The insiders are best positioned to assist the movants with information helpful to unwind the complex web of entities and transactions that they created,” lawyers wrote in the court filing. The FTX debtors say they’ve met, or tried to meet, with Bankman-Fried and other FTX insiders on a voluntary basis, but did not receive the information they are seeking. 

Lawyers representing the U.S. government in the bankruptcy process have pushed for the appointment of an independent examiner to investigate finances of all companies involved in the case, to ensure a full accounting. Representatives for FTX and its affiliated companies, as well as joint provisional liquidators for FTX’s trading operation in the Bahamas, have pushed back on a request. In court documents filed on Wednesday they argued that an examiner would duplicate their investigative efforts and cost the companies millions of dollars, which would reduce assets they have on hand to pay back customers and investors. 

Bankman-Fried has pleaded not guilty to criminal charges in a separate case for his alleged wrongdoing at FTX. Ellison and Wang have pleaded guilty to criminal charges and are cooperating with federal authorities, according to government court filings. 

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.

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