Sam Bankman-Fried’s Mother and Brother Not Cooperating With Financial Probe, FTX Lawyers Say
At least some of Sam Bankman-Fried's immediate family aren’t cooperating with the probe into the collapsed crypto exchange FTX and should be cross-questioned in court, the company’s lawyers have said in a legal filing made Wednesday.
The FTX founder’s brother, mother and father were his “advisors,” and should be subpoenaed alongside former company executives as the company’s new management seeks to find out what happened to allegedly misappropriated funds, the filing said.
“The Debtors and their advisors have been working tirelessly and nonstop over the last 70 plus days … to implement controls, recover and protect estate assets,” said the legal filing made jointly by FTX and creditor representatives. “Key questions remain, however, concerning numerous aspects of the Debtors’ finances and transactions," the filing continued.
FTX wants to know who received potentially stolen funds from FTX, and what communications they had with its executives – but alleges that some potential witnesses aren't playing ball despite requests to cooperate voluntarily.
Sam Bankman-Fried’s mother, Barbara Fried, “has ignored the requests altogether,” the attorneys say, while “the debtors have not received meaningful engagement or any response from [former chief engineer Nishad] Singh or Mr. Gabriel Bankman-Fried,” Sam’s brother.
Discussions with lawyers for Sam Bankman-Fried's father, Joseph Bankman, are "ongoing" and were expected to lead to a consensual outcome, the filing said.
FTX, known in bankruptcy proceedings as the Debtor, alleges that Gabriel Bankman-Fried’s lobbying organization, Guarding Against Pandemics, “purchased a multimillion-dollar property a few blocks from the United States Capital [sic], which the debtors believe was purchased using misappropriated customer funds.”
Fried’s political action committee, Mind the Gap, also allegedly received donations from Sam Bankman-Fried and other FTX staffers, and both parents “resided in a $16.4 million [Bahamas] house titled in their names, despite understanding that the house was ‘intended to be the company’s property’,” the filing said.
In an emailed statement, Marissa McBride, Executive Director of Mind the Gap, told CoinDesk that “Sam Bankman-Fried contributed to some of the programs that Mind the Gap recommended to its network, but he did not make any direct contributions to Mind the Gap,” and that the group publicly discloses all contributions received to the Federal Election Commission.
Sam Bankman-Fried should also be subpoenaed by the court, the filing said, as should FTX co-founder Gary Wang and Caroline Ellison, chief executive of trading firm Alameda Research, who, the filing said, “expressly declined to provide the requested information.”
The request will be discussed at a Feb. 8 hearing in the U.S. bankruptcy court in Delaware. A spokesperson for Sam Bankman-Fried did not immediately respond to a request for comment.
UPDATE (Jan 27, 07:10 UTC): adds comment from Mind the Gap.