LONDON (Bywire News) - FTX, the defunct crypto exchange, has been granted permission by a U.S. Bankruptcy Court to issue subpoenas to its founder, Sam Bankman-Fried, and other members of his family.
The proceedings, which are part of FTX's investigation into the alleged misappropriation and theft of funds, were approved by Judge John Dorsey. FTX filed for bankruptcy in November after accusations that Bankman-Fried had used FTX customers' money to prop up the balance sheet of the FTX-affiliated hedge fund Alameda Research.
FTX has stated that it needs more information from former insiders, including its indicted founder, in order to identify misspending that could be clawed back to repay its customers. Subpoenas have been issued to Bankman-Fried, his parents Barbara Fried and Joseph Bankman, his brother Gabriel Bankman-Fried, former FTX Chief Technology Officer Gary Wang, former Alameda Research CEO Caroline Ellison, and former FTX Chief Operating Officer Constance Wang.
FTX has reported that most of the subpoena targets have begun cooperating with the investigation, and that discussions are continuing with Ellison. Sam Bankman-Fried, however, remains non-responsive. Ellison and Gary Wang have both pleaded guilty to fraud charges relating to the collapse of FTX and Alameda, while Bankman-Fried has pleaded not guilty and is due to stand trial in federal court in Manhattan in October.
The subpoenas focus on questionable spending by FTX insiders, including the $16.7 million spent on Bahamian real estate by Bankman-Fried's parents and a Washington, D.C., headquarters building purchased by Guarding Against Pandemics, an advocacy organization founded by the Bankman-Fried brothers. FTX is also seeking information on political donations, including those made by Sam Bankman-Fried and his mother's political action committee, Mind the Gap. Mind the Gap has previously stated that Bankman-Fried has not made any direct contributions to the organization, but has donated to some of its recommended programs.
(Reporting by Dietrich Knauth; Editing by Nick Zieminski, and Michael O'Sullivan)