FTX wants to ask Sam Bankman-Fried's parents and brother if they received any money from the crypto exchange
Phil Rosen
Thu, January 26, 2023
Sam Bankman-FriedPhoto by Michael M. Santiago/Getty Images)
Court documents show FTX aims to question Sam Bankman-Fried's parents and brother about their personal wealth, per Bloomberg.
The family should provide financial documents about any money they may have received from the company, FTX lawyers said.
The bankruptcy judge still has to approve the request before FTX lawyers can move forward.
FTX wants to question Sam Bankman-Fried's family members about whether they received any funds from the bankrupt crypto exchange, court filings show, per Bloomberg.
As part of the company's mission to recover funds that could be used to pay back creditors, FTX lawyers said in the filing that Bankman-Fried's parents, Joseph Bankman and Barbara Fried, as well as brother Gabriel Bankman-Fried, should answer questions under oath and also provide financial documents about their personal wealth.
Before FTX can move forward with any questioning, US Bankruptcy Judge John Dorsey must approve the request.
Federal prosecutors have charged Sam Bankman-Fried, the founder of the FTX empire, with fraud amid allegations that FTX transferred billions of dollars in clients' funds to prop up his Alameda Research trading arm. He has pleaded not guilty.
Both of Bankman-Fried's parents have been involved with the company. Joseph Bankman, a Stanford law professor, reportedly gave tax advice to FTX staffers and helped recruit the company's lawyers.
Barbara Fried is said to have founded a political action committee that took money from FTX. Like her husband, she is also a law professor at Stanford.
In addition, Reuters reported in November that a $16.4 million house in the Bahamas listed Bankman-Fried's parents as signatories and was described in property records as a "vacation home." He later said it was actually meant to be company property.
As for Gabriel Bankman-Fried, he founded a nonprofit focused on pandemics that lobbied politicians, and a $3.28 million house in Washington DC that it bought last year has just been put on the market.
Meanwhile, Bankman-Fried remains under house arrest at his parents' home in Palo Alto, California, as he awaits trial.
FTX opposes new bankruptcy investigation as it probes Bankman-Fried connections
Thu, January 26, 2023
By Noele Illien, Tom Wilson and Dietrich Knauth
ZURICH/LONDON (Reuters) - FTX has objected to a U.S. Department of Justice request for an independent investigation into the once-prominent crypto exchange's collapse, saying it is already conducting a wide-ranging probe that includes family members of FTX founder Sam Bankman-Fried.FTX said in a court filing in Wilmington, Delaware, late on Wednesday that the DOJ's proposed review would only add cost and delay to its bankruptcy case. FTX acknowledged "fraud, dishonesty, incompetence, misconduct, mismanagement, and irregularity" in its past conduct, but said that its previous wrongdoing is already being probed by the company's new management, its creditors and law enforcement agencies.
As part of its own investigation, FTX asked U.S. Bankruptcy Judge John Dorsey, who is overseeing its Chapter 11 proceedings, to help it secure documents from Bankman-Fried, members of his family and other insiders with information about FTX transactions that used "misappropriated and stolen" funds. These transactions, it said, include a $16.7 million Bahamian real estate purchase under the name of Bankman-Fried's parents, Joseph Bankman and Barbara Fried.
FTX is also seeking information about political donations connected to Bankman-Fried, asking wide-ranging questions about Mind the Gap, a political action committee founded by Barbara Fried, and Guarding Against Pandemics, an advocacy organization founded by Sam Bankman-Fried and his brother, Gabriel Bankman-Fried. FTX said Guarding Against Pandemics' multimillion-dollar Washington, D.C., headquarters was purchased with misappropriated funds.
Bankman-Fried and members of his family could not immediately be reached for comment.
A spokesperson for Mind the Gap said it did not receive direct contributions from Sam Bankman-Fried, although Bankman-Fried made donations to some political causes it recommended to its donor network.
FTX, once among the world's top crypto exchanges, shook the sector in November by filing for bankruptcy, leaving an estimated 9 million customers and other investors facing total losses in the billions of dollars.
The U.S. Department of Justice's bankruptcy watchdog has called for an independent investigation into its collapse, a request that received backing from a bipartisan group of U.S. senators.
FTX’s new CEO, John Ray, who worked with court-appointed examiners while leading Enron Corp and Residential Capital through bankruptcy, is prepared to testify that examiners in those two cases cost a combined $150 million and provided "minimal" benefits to creditors, FTX said.
FTX's official committee of creditors joined the company in opposing the appointment of an examiner.
FTX also on Wednesday night filed a new list of creditors in bankruptcy court, which included financial watchdogs and government agencies from the United States, Japan and Switzerland, as well as companies including Airbnb Inc and crypto giant Binance.
Airbnb and Binance did not immediately respond to a request for comment.
The U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) and U.S. Internal Revenue Service (IRS) are among those on the new list of creditors. It did not give details of the nature or amount of monies owed.
FTX said on Thursday that the list was meant to ensure the broadest possible outreach to potential stakeholders in its bankruptcy, and that FTX does not necessarily owe money to each name on the creditor list.
FTX said last year it owed its 50 biggest creditors nearly $3.1 billion. Dorsey in January allowed FTX to keep secret the names of 9 million of its individual customers for three months.
Sam Bankman-Fried, who has been accused of stealing billions of dollars from FTX customers to pay debts incurred by his crypto-focused hedge fund, has pleaded not guilty to fraud charges. He is scheduled to face trial in October.
(Reporting by Noele Illien in Zurich, Tom Wilson in London and Dietrich Knauth in New York; Editing by Kirsten Donovan, Alexia Garamfalvi and Matthew Lewis)
Sam Bankman-Fried’s Mother and Brother Not Cooperating With Financial Probe, FTX Lawyers Say
Jack Schickler
Thu, January 26, 2023 at 10:22 AM MST·2 min read
At least some of Sam Bankman-Fried's immediate family aren't cooperating with the probe into the collapsed crypto exchange FTX and should be cross-questioned in court, the company’s lawyers have said in a legal filing made Wednesday.
The FTX founder’s brother, mother and father were his “advisors,” and should be subpoenaed alongside former company executives as the company’s new management seeks to find out what happened to allegedly misappropriated funds, the filing said.
“The Debtors and their advisors have been working tirelessly and nonstop over the last 70 plus days … to implement controls, recover and protect estate assets,” said the legal filing made jointly by FTX and creditor representatives. “Key questions remain, however, concerning numerous aspects of the Debtors’ finances and transactions," the filing continued.
FTX wants to know who received potentially stolen funds from FTX, and what communications they had with its executives – but alleges that some potential witnesses aren't playing ball despite requests to cooperate voluntarily.
Sam Bankman-Fried’s mother, Barbara Fried, “has ignored the requests altogether,” the attorneys say, while “the debtors have not received meaningful engagement or any response from [former chief engineer Nishad] Singh or Mr. Gabriel Bankman-Fried,” Sam’s brother.
Discussions with lawyers for Sam Bankman-Fried's father, Joseph Bankman, are "ongoing" and were expected to lead to a consensual outcome, the filing said.
FTX, known in bankruptcy proceedings as the Debtor, alleges that Gabriel Bankman-Fried’s lobbying organization, Guarding Against Pandemics, “purchased a multimillion-dollar property a few blocks from the United States Capital [sic], which the debtors believe was purchased using misappropriated customer funds.”
Fried’s mother's political action committee, Mind the Gap, also allegedly received donations from Sam Bankman-Fried and other FTX staffers, and both parents “resided in a $16.4 million [Bahamas] house titled in their names, despite understanding that the house was ‘intended to be the company’s property’,” the filing said.
Sam Bankman-Fried should also be subpoenaed by the court, the filing said, as should FTX co-founder Gary Wang and Caroline Ellison, chief executive of trading firm Alameda Research, who, the filing said, “expressly declined to provide the requested information.”
The request will be discussed at a Feb. 8 hearing in the U.S. bankruptcy court in Delaware. A spokesperson for Sam Bankman-Fried did not immediately respond to a request for comment.
Phil Rosen
Thu, January 26, 2023
Sam Bankman-FriedPhoto by Michael M. Santiago/Getty Images)
Court documents show FTX aims to question Sam Bankman-Fried's parents and brother about their personal wealth, per Bloomberg.
The family should provide financial documents about any money they may have received from the company, FTX lawyers said.
The bankruptcy judge still has to approve the request before FTX lawyers can move forward.
FTX wants to question Sam Bankman-Fried's family members about whether they received any funds from the bankrupt crypto exchange, court filings show, per Bloomberg.
As part of the company's mission to recover funds that could be used to pay back creditors, FTX lawyers said in the filing that Bankman-Fried's parents, Joseph Bankman and Barbara Fried, as well as brother Gabriel Bankman-Fried, should answer questions under oath and also provide financial documents about their personal wealth.
Before FTX can move forward with any questioning, US Bankruptcy Judge John Dorsey must approve the request.
Federal prosecutors have charged Sam Bankman-Fried, the founder of the FTX empire, with fraud amid allegations that FTX transferred billions of dollars in clients' funds to prop up his Alameda Research trading arm. He has pleaded not guilty.
Both of Bankman-Fried's parents have been involved with the company. Joseph Bankman, a Stanford law professor, reportedly gave tax advice to FTX staffers and helped recruit the company's lawyers.
Barbara Fried is said to have founded a political action committee that took money from FTX. Like her husband, she is also a law professor at Stanford.
In addition, Reuters reported in November that a $16.4 million house in the Bahamas listed Bankman-Fried's parents as signatories and was described in property records as a "vacation home." He later said it was actually meant to be company property.
As for Gabriel Bankman-Fried, he founded a nonprofit focused on pandemics that lobbied politicians, and a $3.28 million house in Washington DC that it bought last year has just been put on the market.
Meanwhile, Bankman-Fried remains under house arrest at his parents' home in Palo Alto, California, as he awaits trial.
FTX opposes new bankruptcy investigation as it probes Bankman-Fried connections
Thu, January 26, 2023
By Noele Illien, Tom Wilson and Dietrich Knauth
ZURICH/LONDON (Reuters) - FTX has objected to a U.S. Department of Justice request for an independent investigation into the once-prominent crypto exchange's collapse, saying it is already conducting a wide-ranging probe that includes family members of FTX founder Sam Bankman-Fried.FTX said in a court filing in Wilmington, Delaware, late on Wednesday that the DOJ's proposed review would only add cost and delay to its bankruptcy case. FTX acknowledged "fraud, dishonesty, incompetence, misconduct, mismanagement, and irregularity" in its past conduct, but said that its previous wrongdoing is already being probed by the company's new management, its creditors and law enforcement agencies.
As part of its own investigation, FTX asked U.S. Bankruptcy Judge John Dorsey, who is overseeing its Chapter 11 proceedings, to help it secure documents from Bankman-Fried, members of his family and other insiders with information about FTX transactions that used "misappropriated and stolen" funds. These transactions, it said, include a $16.7 million Bahamian real estate purchase under the name of Bankman-Fried's parents, Joseph Bankman and Barbara Fried.
FTX is also seeking information about political donations connected to Bankman-Fried, asking wide-ranging questions about Mind the Gap, a political action committee founded by Barbara Fried, and Guarding Against Pandemics, an advocacy organization founded by Sam Bankman-Fried and his brother, Gabriel Bankman-Fried. FTX said Guarding Against Pandemics' multimillion-dollar Washington, D.C., headquarters was purchased with misappropriated funds.
Bankman-Fried and members of his family could not immediately be reached for comment.
A spokesperson for Mind the Gap said it did not receive direct contributions from Sam Bankman-Fried, although Bankman-Fried made donations to some political causes it recommended to its donor network.
FTX, once among the world's top crypto exchanges, shook the sector in November by filing for bankruptcy, leaving an estimated 9 million customers and other investors facing total losses in the billions of dollars.
The U.S. Department of Justice's bankruptcy watchdog has called for an independent investigation into its collapse, a request that received backing from a bipartisan group of U.S. senators.
FTX’s new CEO, John Ray, who worked with court-appointed examiners while leading Enron Corp and Residential Capital through bankruptcy, is prepared to testify that examiners in those two cases cost a combined $150 million and provided "minimal" benefits to creditors, FTX said.
FTX's official committee of creditors joined the company in opposing the appointment of an examiner.
FTX also on Wednesday night filed a new list of creditors in bankruptcy court, which included financial watchdogs and government agencies from the United States, Japan and Switzerland, as well as companies including Airbnb Inc and crypto giant Binance.
Airbnb and Binance did not immediately respond to a request for comment.
The U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) and U.S. Internal Revenue Service (IRS) are among those on the new list of creditors. It did not give details of the nature or amount of monies owed.
FTX said on Thursday that the list was meant to ensure the broadest possible outreach to potential stakeholders in its bankruptcy, and that FTX does not necessarily owe money to each name on the creditor list.
FTX said last year it owed its 50 biggest creditors nearly $3.1 billion. Dorsey in January allowed FTX to keep secret the names of 9 million of its individual customers for three months.
Sam Bankman-Fried, who has been accused of stealing billions of dollars from FTX customers to pay debts incurred by his crypto-focused hedge fund, has pleaded not guilty to fraud charges. He is scheduled to face trial in October.
(Reporting by Noele Illien in Zurich, Tom Wilson in London and Dietrich Knauth in New York; Editing by Kirsten Donovan, Alexia Garamfalvi and Matthew Lewis)
Sam Bankman-Fried’s Mother and Brother Not Cooperating With Financial Probe, FTX Lawyers Say
Jack Schickler
Thu, January 26, 2023 at 10:22 AM MST·2 min read
At least some of Sam Bankman-Fried's immediate family aren't cooperating with the probe into the collapsed crypto exchange FTX and should be cross-questioned in court, the company’s lawyers have said in a legal filing made Wednesday.
The FTX founder’s brother, mother and father were his “advisors,” and should be subpoenaed alongside former company executives as the company’s new management seeks to find out what happened to allegedly misappropriated funds, the filing said.
“The Debtors and their advisors have been working tirelessly and nonstop over the last 70 plus days … to implement controls, recover and protect estate assets,” said the legal filing made jointly by FTX and creditor representatives. “Key questions remain, however, concerning numerous aspects of the Debtors’ finances and transactions," the filing continued.
FTX wants to know who received potentially stolen funds from FTX, and what communications they had with its executives – but alleges that some potential witnesses aren't playing ball despite requests to cooperate voluntarily.
Sam Bankman-Fried’s mother, Barbara Fried, “has ignored the requests altogether,” the attorneys say, while “the debtors have not received meaningful engagement or any response from [former chief engineer Nishad] Singh or Mr. Gabriel Bankman-Fried,” Sam’s brother.
Discussions with lawyers for Sam Bankman-Fried's father, Joseph Bankman, are "ongoing" and were expected to lead to a consensual outcome, the filing said.
FTX, known in bankruptcy proceedings as the Debtor, alleges that Gabriel Bankman-Fried’s lobbying organization, Guarding Against Pandemics, “purchased a multimillion-dollar property a few blocks from the United States Capital [sic], which the debtors believe was purchased using misappropriated customer funds.”
Fried’s mother's political action committee, Mind the Gap, also allegedly received donations from Sam Bankman-Fried and other FTX staffers, and both parents “resided in a $16.4 million [Bahamas] house titled in their names, despite understanding that the house was ‘intended to be the company’s property’,” the filing said.
Sam Bankman-Fried should also be subpoenaed by the court, the filing said, as should FTX co-founder Gary Wang and Caroline Ellison, chief executive of trading firm Alameda Research, who, the filing said, “expressly declined to provide the requested information.”
The request will be discussed at a Feb. 8 hearing in the U.S. bankruptcy court in Delaware. A spokesperson for Sam Bankman-Fried did not immediately respond to a request for comment.
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