FTX debtors can issue subpoenas to company ‘insiders’, says court

The list of FTX insiders included former CEO Sam Bankman-Fried, former Alameda Research CEO Caroline Ellison, FTX co-founder Gary Wang, and members of SBF’s immediate family.

The judge overseeing crypto exchange FTX’s bankruptcy case has granted a motion allowing the firm’s debtors to request subpoenas for information and documents from former colleagues and family members of Sam Bankman-Fried.

In a Feb. 8 filing, Judge John Dorsey said FTX debtors were authorized under bankruptcy court rules to issue subpoenas to certain individuals “for the production of documents, electronically stored information, or tangible things”. The original motion filed on Jan. 25 defined the target of the subpoenas as insiders not “currently cooperating with the Debtors to provide important information” — a list which includes Bankman-Fried, former Alameda Research CEO Caroline Ellison, FTX co-founder Gary Wang, and members of SBF’s immediate family.

“The Debtors attempted to confer with all of the Insiders to arrange a mutually agreeable date, time, place and scope of production,” said the Jan. 25 filing. “To date, none of the Insiders subject to this Motion have agreed to provide the requested information.”

Judge Dorsey granted a separate motion on Feb. 8 ordering subpoenas of “relevant third parties” related to discovery of a confidential investigation. The initial filing from January did not include the names of the third parties, but added they could “possess specific evidence critical to the Debtors’ asset recovery efforts and investigation” into $300 million in unauthorized transfers.

Proceedings are underway in the bankruptcy court to consider whether to assign an independent examiner to FTX’s case operating alongside the debtors. Judge Dorsey is expected to rule on the matter in a Feb. 9 hearing.

Related: FTX seeks to claw back political donations by the end of February

In criminal court, Bankman-Fried faces eight counts related to alleged illicit transactions and movement of funds between FTX and Alameda. On Feb. 7, U.S. Attorney for the Southern District of New York Damian Williams petitioned the court to delay civil proceedings from the Securities and Exchange Commission and Commodity Futures Trading Commission against SBF “until the conclusion of the parallel criminal case”.