- February 19, 2023
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
The current legal saga facing FTX former CEO Sam Bank-Friedman shows no signs of abating, with new cases weekly. The latest reports say that the FTX founder has been served a subpoena to testify at a deposition about bankrupt crypto firm Voyager Digital.
Sam Bankman-Fried To Testify In Court Deposition
This development was confirmed in a court filing on February 18. According to the details, Sam Bankman-Fried, alongside Alameda CEO Caroline Ellison, FTX co-founder Gary Wang and FTX’s head of product Ramoc, must appear for a remote deposition on February 23.
In addition, they must produce all requested documents and communications before February 20. The subpoena was served by representatives of unsecured creditors affected by Voyager Digital’s collapse and subsequent bankruptcy.
On July 6, 2022, Voyager Digital, a cryptocurrency exchange and custodian, announced that it had filed for bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York. According to court filings, Voyager Digital had a debt profile of $1 to $10 billion.
The company cited struggles in its business due to significant losses and the rapid decline in the cryptocurrency markets. However, it was widely speculated that the company was affected by the bankruptcy of hedge fund Three Arrows Capital. Three Arrows made huge losses on Terra Luna which caused a ripple effect in the crypto industry.
Following this development, Voyager Digital creditors agreed to a $1.4 billion deal to sell its assets to FTX. However, the collapse of FTX in November broke the deal. Since then, Binance has swooped in and agreed to purchase Voyager for $1 billion.
FTX Legal Woes Deepen
FTX dominated the cryptocurrency exchange scene for several years with Binance. However, this changed in November 2022 when the exchange filed for insolvency. It was revealed that FTX used clients’ funds to finance its sister company Alameda Research which made shoddy investments. Court filings showed that FTX owes at least $3 billion to its top 50 creditors.
Among these are the technology companies Apple and Microsoft, the streaming service Netflix, the e-commerce leader Amazon, and the social network TikTok. FTX also owes money to companies in the cryptocurrency sector, such as exchanges and wallet providers Binance, Coinbase, BitGo, BitNob, BitStamp, and Bittrex.
Related Reading: FTX Judge Considers Approval For Independent Bankruptcy Investigation
Former CEO Sam Bank-Friedman has been charged with fraud and mismanagement of clients’ funds. Bank-Friedman has denied any wrongdoing and has argued that he was trying to save the company from potentially going under. It was revealed on Monday that FTX had begun requesting refunds from donor recipients in a bid to recover lost funds.
FTX Token (FTT) Price
FTT value has plummeted massively since the crash of the FTX exchange. The token is currently valued at $1.62 with a market cap of $572,197 and ranked 212, according to CoinMarketCap.
-Featured image from wallpaper.com, chart from TradingView.
