Collapsed Crypto Exchange FTX Seeks Court Subpoenas for Founder’s Immediate Family over Alleged Misappropriated Funds

FTX is a crypto-exchange that went bankrupt in 2022. Now, the company’s new leadership is trying to figure out how the funds were misappropriated. FTX’s lawyers filed a legal document Wednesday stating that at least some members of Sam Bankman-Fried, the founder of the company, are not cooperating in the investigation and should be cross-examined in court.

The filing stated that the FTX founder’s father, brother, and mother were his “advisors.” They should be subpoenaed together with other company executives to learn what happened to the allegedly misappropriated cash. The filing also stated that “key questions remain, however, concerning numerous aspects of the Debtors’ finances and transactions.”

FTX is interested in knowing who could have stolen company funds and what communications were had with its executives. However, the company says that potential witnesses are refusing to cooperate despite repeated requests. Sam Bankman Fried’s mother, Barbara Fried “has completely ignored the requests,” the attorneys claim, while “the creditors have not received any meaningful engagement or any response.” [former chief engineer Nishad] Singh or Mr. Gabriel Bankman Fried,” Sam’s brother.

According to the filing, discussions with Joseph Bankman’s lawyers about Sam Bankman-Fried are ongoing and should lead to a consensus. FTX also alleges Gabriel Bankman-Fried, a lobbying organization for Guarding Against Pandemics purchased a multimillion-dollar property just blocks from the United States Capital. [sic]The debtors believe that the purchase of, was made with misappropriated customer funds.

Mind the Gap, Fried’s mother’s political action committee received donations from Sam Bankman Fried and other FTX staffers. Both parents were “residenced in a $16.4million [Bahamas] They were able to title the house in their names despite the fact that they knew the house was ‘intended for the company’s properties’,” the filing stated.

The filing stated that Sam Bankman-Fried and Gary Wang, co-founders of FTX, should be subpoenaed to the court. Caroline Ellison, chief executive at trading firm Alameda Research who, according to the filing, “expressly declined” to provide the requested information.

The request will be considered at a hearing on February 8, in Delaware’s U.S. Bankruptcy Court. Sam Bankman Fried spokesperson did not immediately respond when we asked for comment.

The legal battle between FTX founders and their family members is a reminder about the risks and challenges that the crypto industry faces. Despite crypto exchanges such as FTX growing in popularity, the industry is still lacking regulation and oversight. This lack of oversight has resulted in a few high-profile failures of crypto exchanges, with customers suffering losses of millions of dollars.

FTX’s legal filing also highlights the need to have transparency and accountability within the crypto industry. The alleged misappropriation is a serious matter that needs to be addressed and those responsible should be held responsible. The outcome of legal proceedings between FTX founders and their family members will be closely monitored by the crypto community. This could have a major impact on the future development of the industry.

The legal battle between FTX founders and their family members is a reminder about the risks and challenges that the crypto industry faces. The lack of regulation and oversight in this industry and the potential for misappropriation highlight the need to be transparent and accountable.