Court Allows FTX’s Turkish Subsidiary To Be Excluded From Proceedings

• Last month, FTX asked for this order to be signed by the Court.
• Turkey’s Financial Crimes Investigation Board have froze the assets of the firm.

On Monday, Judge John T. Dorsey of the Delaware Bankruptcy Court approved the discharge of FTX’s Turkish firms from the U.S. bankruptcy proceedings of the defunct exchange. Last month, FTX asked for this order to be signed, stating that the Turkish firms should be excluded since their inclusion is “not strategic” and a waste of valuable resources.

According to FTX’s bankruptcy petition from January, the crypto exchange will be unable to “exercise sufficient control” over its Turkish subsidiaries since there is no reason to assume that the Turkish government would cooperate with this court’s instructions.

Under Turkish Authorities Control

Furthermore, FTX Turkey, an FTX subsidiary based in Turkey, is held 80% by FTX Trading Ltd. and 20% by SNG Investments, an indirect wholly-owned subsidiary of FTX’s sister trading business, Alameda Research LLC. In the petition, it is said that private lawsuits have been filed against the subsidiary by Turkish nationals and that local authorities may utilize the confiscated assets to settle judgments issued by Turkish courts.

Moreover, after the country’s financial crisis developed last November, local authorities started investigating the subsidiary’s operations. After allegations of fraud by ex-CEO Sam Bankman-Fried surfaced, Turkey’s Financial Crimes Investigation Board quickly froze the assets of the local company and its affiliates and launched an investigation.

In the United States, Bankman-Fried is on trial on eight counts, including wire fraud and conspiracy to commit money laundering. The former CEO, who is just 30 years old, faces over 130 years in jail if he is proven guilty on all counts. 

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