On Wednesday, U.S. Bankruptcy Judge John Dorsey issued an order allowing the now-defunct cryptocurrency exchange FTX to subpoena co-founders Sam Bankman-Fried and Gary Wang, ex-Alameda Research CEO Caroline Ellison, and Bankman-Fried’s family.
The subpoena is part of an inquiry into “misappropriated and stolen” assets. As of last November, FTX was operating under Chapter 11 bankruptcy protection.
The bankruptcy filing took place amid the accusation of client asset misuse by SBF to stabilize the financial situation at Alameda Research, a hedge fund with ties to the company.
The legal team for FTX requested permission to issue subpoenas to the “insiders” on January 25, claiming that some people in Bankman-Fried’s inner circle had been assisting the restructuring team in retrieving the assets.
On Wednesday, FTX reported in court documents that it had begun receiving cooperation from most subpoena targets. Since FTX’s last update, the company has been talking with Ellison and claimed that SBF “remains non-responsive.”
Attorney Kimberly Brown said in the January 25 petition that there were unresolved questions regarding “many aspects of the Debtors’ finances and transactions.”
The petition also accuses FTX’s former engineering chief Nishad Singh, FTX’s former COO Constance Wang and ex-Co-CEO of FTX Digital Markets Ryan Salame of failing to cooperate with efforts to recover consumer funds.
The Wall Street Journal reported in December on documents showing that on November 9, Salame tipped off officials in the Bahamas, where FTX headquarters was located. He claimed that FTX’s trading desk, Alameda, was diverting money from FTX customers to cover its losses.
The fund had billions of dollars worth of FTT, the native token of FTX, against billions of dollars worth of liabilities, as revealed in a leaked balance statement from Alameda just days earlier.
After being charged with fraud for their roles in the demise of FTX and Alameda, Ellison and Gary Wang pleaded guilty. The trial of SBF, who pleaded not guilty, will begin in Manhattan federal court in October.