Associates and family members of Sam Bankman-Fried are refusing to cooperate in the FTX bankruptcy case, according to a court filing dated Jan. 25.
SBF associates do not cooperate
Following its collapse last November, FTX, once a leading cryptocurrency exchange, entered bankruptcy proceedings in the US Bankruptcy Court for the District of Delaware.
Now, as part of those proceedings, the company is seeking relevant information from former founder and CEO Sam Bankman-Fried and others close to him.
According to one filing, certain people are “currently cooperating” to provide “important information” while others are not. As such, FTX and its creditors’ committee want these people to be subpoenaed and forced to provide documents and information.
That information should help recover allegedly embezzled funds. Bankman-Fried relatives and associates conducted transactions, received donations and purchased property, all of which could be relevant to tracing the flow of funds.
Sam-Bankman Fried himself is allegedly not cooperating with the case. Brother Gabriel Bankman-Fried and partner Nishad Singh have not provided a meaningful response. Associates Gary Wang and Caroline Ellison have declined to provide information.
Additionally, Bankman-Fried’s mother, Barbara Fried, has ignored requests for information. Lawyers for her father, Joseph Bankman, are reportedly cooperating.
SBF’s arrest was secret
Sam Bankman-Fried and other sources close to him also revealed new details about his imprisonment in the Bahamas during a Forbes interview on January 26.
According to Forbes, Bankman-Fried received a call from his lawyer on December 12 warning him of his impending arrest, which would take place later that day. Bankman-Fried’s lawyer had obtained that information from the FBI. The FBI also offered a choice: Bankman-Fried could wait for his imminent arrest, which would allow him to remain in the Bahamas, or he could agree to be extradited to the US immediately.
Bankman-Fried and her parents tried to find out if the offer was legitimate by calling several Bahamian officials who knew nothing about the development.
According to a diplomatic memo, the US Department of Justice (DOJ) believed that Bankman-Fried would attempt to flee the Bahamas or destroy important evidence if allowed to remain at large. That allegedly motivated the Justice Department to keep Bankman-Fried’s arrest secret in order to pressure him to return to the United States.
Ultimately, only two Bahamian officials, Attorney General Leo Pinder and Magistrate Court Judge JoyAnn Ferguson-Pratt, were aware of the planned arrest. The miscommunication led to Bankman-Fried’s detention at Fox Hill Prison.
The lack of internet prompted the extradition
Sam Bankman-Fried did not personally disclose that information. However, he echoed an earlier sentiment by noting that the lack of internet was the hardest part of being in prison. He said:
“I didn’t realize how important internet access is to me combined than everything else, but that was like 80% of the total cost of being in prison.”
Bankman-Fried was allowed to make only one 30-minute phone call during her prison stay, and was able to read a newspaper on occasion. He was also able to speak with his lawyers on a daily basis. This limited communication — specifically, the absence of internet access — was the “driving force behind his extradition and bail deal,” Forbes says.
On December 21, after nine days in jail, Bankman-Fried agreed to extradition. Previous reports suggested that Bankman-Fried and his lawyer would fight the extradition before opting to reverse that position days later. Bankman-Fried soon returned to the US, where he faced eight charges, including fraud and money laundering.
The FTX bankruptcy case is separate from the Bankman-Fried criminal case. Ellison and Wang cooperated with authorities to reach a plea agreement in mid-December. Bankman-Fried himself will remain on bail until his trial in October.
Posted in: FTX, Bankruptcy
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