CRIMINAL CAPITALI$M
FTX’s Sam Bankman-Fried fighting court battle in Antigua over assets

Mark Hollingsworth
Sat, 2 September 2023 

Sam Bankman-Fried was arrested after the sudden collapse of the FTX exchange in November 2022 - REUTERS/Eduardo Munoz/File Photo

The founder of collapsed cryptocurrency exchange FTX has been accused of failing to cooperate with the liquidation of a separate company he owned in the Caribbean, The Telegraph can reveal.

Sam Bankman-Fried has been accused of failing to hand over key documents to court-appointed liquidators for now-bankrupt holding company Emergent Fidelity Technologies (EFT). He has also filed 16 applications to block the process, despite claims of relative poverty.

The legal battle has been taking place in Antigua where EFT is registered. Until recently, the holding company owned 56 million shares in stock trading service Robinhood. This stake, worth $606m, was frozen by the US Department of Justice as part of a massive fraud investigation.

Robinhood repurchased the shares on Friday. The funds from the sale are to be held in the US Department of Justice’s seized asset deposit fund under the terms stipulated by US Judge Lewis Kaplan, who is overseeing Mr Bankman-Fried’s criminal fraud case.

FTX creditors are still pursuing the cash from this stake and the investigation into EFT continues.

They are furious because they claim Mr Bankman-Fried has been obstructing the liquidation.

In an affidavit seen by The Telegraph, the liquidators said: “Mr Bankman Fried has not cooperated with the liquidators or provided the EFT’s corporate documents.”

FTX was once the world’s second-largest cryptocurrency exchange and valued at $32bn.

After its sudden collapse last November and the arrest of Mr Bankman-Fried, the Antiguan High Court appointed Cayman-based liquidators Angela Barkhouse and Toni Shukla, of Quantuma, as liquidators of all EFT assets.

They have been investigating the intricate web of EFT’s complex assets on behalf of FTX creditors, according to court documents.

Creditors believe they have claim to EFT’s assets. One, Ben Shimon, stated he “invested funds with FTX Trading which were improperly diverted to Emergent, of which Bankman-Fried was a founder, director and majority owner”.

Lawyers for the creditors believe Mr Bankman-Friedman’s legal battle in Antigua may have breached his bail conditions, which limit his spending to $1,000 per day.

Publicly, Mr Bankman-Friedman is complaining about restrictive bail conditions and says he is down to his last $100,000 in cash.

Creditors have filed a claim in the court for Mr Bankman-Fried to disclose his funds, to no avail.

His lawyer David Dorsett was twice asked by The Telegraph how his client was paying his legal fees but declined to comment.

Mr Dorsett said: “Mr Bankman-Fried applied for the Antiguan High Court proceeding (the liquidators) to be struck out and service of the claim form on him set aside.

“Should we succeed in our application, the positions and actions of the liquidators will come into serious question.

In response to Mr Bankman-Fried’s attempts to remove liquidators, Judge Ramdhani in said: “It is the urgent task of the liquidators to secure the complete financial records of the assets of EFT.

“To date, Mr Bankman-Fried has not assisted with respect to the financial records.”

His lawyer Mr Dorsett said: “Mr Bankman-Fried has complied with all orders with respect to him cooperating with the liquidators in the Antiguan matter”.

In some cases, Mr Bankman-Fried has been ordered to pay legal costs and security for costs in the Antiguan Court. He has failed to pay most of these fees.

Mr Bankman-Fried is currently in jail after a judge in New York revoked his bail, accusing him of trying to influence witnesses ahead of a criminal trial in October.

He stands accused of defrauding investors in connection with FTX’s implosion. The trial could be one of the biggest fraud cases in history. The former billionaire denies all the charges.