The imploded cryptocurrency exchange FTX wants the Delaware bankruptcy court to expel its Turkish units from the bankruptcy case, arguing that U.S. court orders “do not have legal or practical effect” in Turkey.
In a filing put forward Friday, FTX also said there’s “no reason to believe that the Turkish government will comply with this Court’s orders,” meaning the exchange will not be able “to exercise sufficient control” over the affairs of the Turkish units to comply with its duties under the Bankruptcy Code.
Soon after FTX filed for Chapter 11 bankruptcy in November, the Turkish Treasury and Finance Ministry launched a probe into the collapse of the exchange, which ran a local subsidiary called FTX Turkey, before seizing its assets later that month.
Authorities in Turkey Seize FTX Founder Sam Bankman-Fried’s Assets
Amid a probe into the collapse of the FTX cryptocurrency exchange, Turkish authorities have seized the assets of Sam Bankman-Fried and other affiliates, the Turkish Treasury and Finance Ministry announced on Wednesday. An inquiry into claims of fraud against the FTX former CEO Bankman-Fried has been opened as well, according to the statement. The move follows last week’s initiation of a probe into the collapse of the exchange, which ran a local subsidiary called FTX Turkey. Turkey Forces Crypto...
FTX says Turkish units 'not strategic'
As detailed in the filing, the local exchange is 80% owned by FTX Trading Ltd, with the remaining 20% of the equity owned by SNG Investments, an indirect wholly-owned subsidiary of Alameda Research LLC, which operated as a market-maker.
The filing refers to both FTX Turkey and SNG Investments as “not strategic” to FTX’s global operations.
Additionally, citizens have begun filing private claims and initiating execution proceedings against FTX Turkey Turkish Debtors, according to the filing.
FTX argues that this also means that any assets of FTX Turkey located in the country may be subject to those private claims and proceedings, adding that local authorities may use them to satisfy any judgments by Turkish courts.
Feds Want Sam Bankman-Fried to Stop Contacting Potential Witnesses on Signal
Federal prosecutors have urged U.S. District Judge Lewis Kaplan to modify Sam Bankman-Fried’s bond agreement, saying the disgraced crypto mogul may have engaged in “witness tampering” by sending encrypted messages to a potential witness. In a four-page filing put forward Friday, prosecutors said Bankman-Fried had tried to contact “the current General Counsel of FTX US” through the encrypted messaging application Signal and email on January 15. While identified in the filing only as “Witness-1,”...
Given all the reasons, FTX believes that the dismissal of Turkish entities is in the best interests of both creditors and debtors’ estates, and continuing the proceedings “will result in a waste of scarce resources and the unnecessary accumulation of fees.”
Friday also saw federal prosecutors ask U.S. District Judge Lewis Kaplan to ban FTX’s founder Sam Bankman-Fried from using encrypted communications channels such as Signal.
The prosecutors alleged that by using messaging applications, he may have tried to influence the testimony of potential witnesses in the bankruptcy proceedings.
