Counsel for the former exchange executive says the subpoena from Voyager is procedurally deficient, presents an undue burden, and potentially violates his fifth amendment rights.

A subpoena for Sam Bankman-Fried that was given to his mother, Barbara Fried, and not Sam himself is being called “procedurally deficient” by his legal counsel.

The counsel for Bankman-Fried is arguing that caselaw in U.S. courts holds that this specific type of subpoena must be personally delivered to the named individual and not left in the care of someone else.

Lawyers for Voyager’s creditors are investigating FTX’s attempt to bail out crypto lender Voyager Digital when it went bankrupt in July 2022.

The specific type of subpoena in question is called a Rule 45 subpoena, which commands the named individual to produce designated documents for inspection and copying. These types of subpoenas are used to procure records and documents used in court cases.

“Leaving the Subpoena in the possession of Barbara Fried does not satisfy the Rule’s requirement for personal service on Mr. Bankman-Fried. Substitute service is generally not permitted to serve a Rule 45 subpoena,” counsel writes, citing prior precedent from a number of cases.

His counsel also says that the subpoena places an undue burden on Bankman-Fried because it only gives him one business day to produce 49 separate documents, and a four-day notice to appear. It was also served before the President’s Day long weekend.

Compliance with the subpoena would also potentially violate Bankman-Fried’s Fifth Amendment rights, which protects against self-incrimination.

“Each of the document requests calls for documents that may be relevant to the Criminal Case, in which loans by and to Alameda are at issue,” they write. “The requested production would entail reviewing a large volume of material and making judgments about their responsiveness – a process that could be deemed to constitute an incriminating testimonial act in the Criminal Case.”

Voyager’s creditors are due back in court in New York on February 22 for another hearing.

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Charges can wait until the Department of Justice’s case against the FTX founder concludes, a judge said.

The U.S. Securities and Exchange Commission’s case against FTX founder Sam Bankman-Fried will be put on hold until related charges brought by the Department of Justice are dealt with, a U.S. judge said in a Feb. 13 ruling.

U.S. prosecutors last week said a pause would save time and resources, as the DOJ case against Bankman-Fried will likely influence overlapping civil cases. The SEC said Bankman-Fried used customer funds for his lavish lifestyle.

On Tuesday, another civil case brought against the disgraced founder by the U.S. Commodity Futures Trading Commission was also delayed until after the trial.

In December, Bankman-Fried was arrested following the collapse of FTX, and has pleaded not guilty to criminal charges brought against him by the DOJ, which include wire fraud and money laundering.

The post SEC Case Against Bankman-Fried Postponed Pending Criminal Trial appeared first on Crypto Insider.

The inquiry will investigate the extent of the risk to the charity’s assets and whether the trustees are complying with their duties around protection of said assets.

The Charity Commission for England and Wales has initiated a probe into Effective Ventures Foundation, a charity backed by Sam Bankman-Fried, founder of the now bankrupt crypto exchange FTX.

The inquiry will investigate the extent of the risk to the charity’s assets and whether the trustees are complying with their duties around the protection of said assets.

The charity reported FTX’s bankruptcy as a “serious incident” because of the significant funds it had received from the exchange’s philanthropic arm.

“There is no indication of wrongdoing by the trustees at this time,” the Commission said on Monday. “However, there are indications of potential risks to the charity’s assets, and the inquiry has been opened to establish facts and help ensure the trustees protect the charity’s assets and are running the charity in line with their duties and responsibilities.”

The Commission added that the trustees are cooperating fully and that it may extend the scope of its enquiry should further regulatory issues emerge.

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The stock was owned – via a holding company – by Sam Bankman-Fried and FTX co-founder Gary Wang.

The U.S. Department of Justice (DOJ) has seized more than 55 million shares of Robinhood (HOOD) stock owned – via a holding company – by Sam Bankman-Fried and FTX co-founder Gary Wang, according to a court document. The shares were worth just over $456 million based on HOOD’s closing price of $8.25 on Friday.

The stock had been held at an account at U.K.-based brokerage ED&F Man.

The “seized Assets constitute property involved in violations” of crimes such as money laundering and wire fraud reads the court document. Sam Bankman-Fried was formally charged with those and other crimes on Dec. 13.

The Robinhood shares were in principle owned by FTX co-founders Bankman-Fried and Gary Wang through their Emergent Fidelity Technologies holding company. FTX, now run by John Ray III, had asked a judge late last month to freeze the stock. Bankman-Fried naturally opposed the move, saying, in part, he needed the shares to help pay his legal fees.

The U.S. government said it was in the process of seizing a number of assets potentially linked to FTX on Wednesday.

The post Robinhood Shares Worth Nearly $500M Seized in FTX Case appeared first on Crypto Insider.

House Financial Services Committee Chairwoman Maxine Waters said she was ‘surprised’ and ‘disappointed’ to hear of SBF’s arrest.

A hearing by the House Financial Services Committee on the collapse of crypto exchange FTX will go on as planned on Tuesday even without the firm’s former CEO and founder Sam Bankman-Fried, who has been arrested.

Bankman-Fried was taken into custody by Bahamas police late on Monday. As soon as the island nation got word that the U.S. had charged the former CEO, reportedly for fraud and money laundering, they arrested him, expecting a request for extradition.

Maxine Waters (D-Calif.), Chairwoman of the U.S. House Financial Services Committee, which will hold the hearing, said she was “surprised” to hear of Bankman-Fried’s arrest and “disappointed” that he would therefore not attend the hearing.

“Although Mr. Bankman-Fried must be held accountable, the American public deserves to hear directly from Mr. Bankman-Fried about the actions that’ve harmed over one million people, and wiped out the hard-earned life savings of so many,” Waters said.

Bankman-Fried, who has given numerous media interviews since the implosion of his empire despite being under criminal investigation, agreed to participate in the hearing on Dec. 9.

FTX, once a darling of Wall Street, Washington, and the media , filed for bankruptcy on Nov. 11, after a CoinDesk article revealed that much of its sister firm Alameda Research’s balance sheet was made up of FTT tokens, which are issued by FTX. That triggered a bank run on its deposits, which eventually led to the exchange’s insolvency.

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The suit, filed in Miami last month, called FTX a “house of cards, a Ponzi scheme where the FTX entities shuffled customer funds between their opaque affiliated entities.”

A class action lawsuit filed against former FTX CEO Sam Bankman-Fried and a host of paid celebrity promoters for the now-defunct crypto exchange has been dropped.

On Thursday, lawyers for the suit’s lead plaintiff, Edwin Garrison, filed a voluntary notice of dismissal with the U.S. District Court for the Southern District of Florida.

The initial suit, filed in Miami, called FTX a “house of cards, a Ponzi scheme where the FTX entities shuffled customer funds between their opaque affiliated entities.”

According to the notice on Thursday, none of the defendants in the case – including Bankman-Fried, NFL quarterback Tom Brady, comedian Larry David, tennis player Naomi Osaka, and the NBA’s Golden State Warriors team – had been served with the summons or the complaint.

Garrison’s lawyer, Adam Moskowitz, did not return CoinDesk’s request for comment as to whether the matter had been settled out of court.

The suit initially called for unspecified damages and a jury trial.

The post Class Action Lawsuit Against FTX’s Celebrity Promoters and Sam Bankman-Fried Is Quietly Dropped appeared first on Crypto Insider.

The Senate Banking and House Financial Services Committees are holding hearings on FTX’s collapse next week.

The Senate Banking Committee wants Sam Bankman-Fried to appear before it next week in person to discuss the collapse of FTX, and will subpoena him if he does not appear voluntarily, a letter from its leaders said Wednesday.

Senators Sherrod Brown (D-Ohio) and Pat Toomey (R-Pa.), respectively the chair and ranking member of the committee, wrote a public letter to Bankman-Fried, who resigned from the exchange the same day it filed for bankruptcy last month. The committee is holding a hearing on Wednesday, Dec. 14, a day after the House Financial Services Committee holds its own hearing on the exchange.

“FTX’s collapse has caused real financial harm to consumers, and effects have spilled over into other parts of the crypto industry. The American people need answers about Sam Bankman-Fried’s misconduct at FTX,” the lawmakers said in a prepared statement. “The Committee has requested that he testify at our upcoming hearing on FTX’s collapse, and will consider further action if he does not comply.”

Normally witnesses appear voluntarily, the lawmakers said in the letter. If Bankman-Fried does not confirm his participation by Thursday, “I am prepared, along with Ranking Member Pat Toomey, to issue a subpoena to compel your testimony,” the letter signed by Brown said.

House Financial Services Committee Chair Maxine Waters has also invited Bankman-Fried to testify, saying in a tweet Wednesday that she may also seek to subpoena him if he does not appear voluntarily.

Bankman-Fried has gone on a press tour since the bankruptcy, speaking to numerous reporters. He has not provided any concrete answers about how FTX appeared to send billions in customer funds to Alameda Research, another company he founded and was a majority owner of, saying he was unsure how it happened and implying that others were responsible for the fund movements.

He now faces a number of investigations, including an investigation by federal prosecutors with the U.S. Attorney’s Office in the Southern District of New York, who are investigating whether Bankman-Fried may have tried to manipulate the price of TerraUSD and Luna, which collapsed in their own dramatic fashion earlier this year, according to the New York Times.

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The country’s Financial Crimes Investigation Board MASAK says the founder of the collapsed crypto exchange Sam Bankman-Fried is also under investigation.

Authorities in Turkey are looking to seize “suspicious assets” associated with collapsed crypto exchange FTX, and are investigating the platform’s founder Sam Bankman-Fried.

A Wednesday notice from the country’s Financial Crimes Investigation Board, known as MASAK, says the agency had sought approval from the Istanbul Chief Public Prosecutor’s Office to initiate “an investigation for various antecedent crimes and laundering the property values ​​arising from the crime” and to “confiscate the suspicious assets” in accordance with local law.

After a CoinDesk article scrutinizing the financial stability of Sam Bankman-Fried’s crypto empire set off a series of events that culminated in a bankruptcy filing in the U.S., regulators in the numerous jurisdictions where the platform had a local presence have sprung to action, most notably in The Bahamas, where FTX was headquartered.

Since Nov. 14, MASAK has also been investigating the exchange’s local unit, FTX Turkey. The ongoing investigations have shown that customers’ trust was “not duly preserved” by the fallen company, and that authorities have “a strong suspicion of crime” being committed, particularly by Bankman-Fried who “directly or indirectly” controls the entities and persons through which FTX operates in Turkey, the notice said.

“As a result of our aforementioned application, a judicial investigation was opened against the suspects and a confiscation measure was applied to the assets of the suspects,” the notice said in Turkish.

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“Everyone was talking about him like he’s walking on water and has a zillion dollars,” Musk said of the now-disgraced Bankman-Fried. “And that [was] not my impression.”

Elon Musk didn’t waste any time jumping into the Twitter fray after an apparent hack of bankrupt crypto lender FTX drained hundreds of millions of dollars from company-controlled wallets.

Just a couple of hours after the apparent hack began late Friday night, Musk tweeted “FTX meltdown/ransack being tracked in real-time on Twitter.” He also responded to a post by crypto entrepreneur Sam Altman with a raunchy meme of former FTX CEO Sam Bankman-Fried.

Around 2:30 am EST on Saturday morning, Musk joined a Twitter Space with over 60,000 listeners to discuss the hack of FTX and share his thoughts on Bankman-Fried.

“To be honest, I’d never heard of him,” Musk said. “But then I got a ton of people telling me [that] he’s got, you know, huge amounts of money that he wants to invest in the Twitter deal. And I talked to him for about half an hour. And I know my bullshit meter was redlining. It was like, this dude is bullshit – that was my impression.”

“Then I was like, man, everyone including major investment banks – everyone was talking about him like he’s walking on water and has a zillion dollars. And that [was] not my impression…that dude is just – there’s something wrong, and he does not have capital, and he will not come through. That was my prediction,” Musk added.

Musk also told listeners that they should keep their crypto in cold wallets, not in exchanges.

“I would reaffirm that, if you have crypto, you should have it in a directly-accessible cold wallet. Not in an exchange,” Musk said. “That would be wise.”

The spectacular collapse of FTX – until this week one of the largest and seemingly most regulated exchanges in the world – hasn’t turned Musk off crypto as a whole.

“I think there probably is a future for Bitcoin, Ethereum, and DOGE. I can’t really speak to the others. But if you’ve got one of those three in a cold wallet, and off an exchange, I think my guess is it works out well,” he said.

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FTX CEO Sam Bankman-Fried said his firm’s offer would give Voyager customers back 100% of the remaining assets, while Voyager’s lawyers argue that it only benefits FTX.

Lawyers representing bankrupt crypto lender Voyager Digital have responded to a proposal by FTX to offer early liquidity to Voyager customers by calling it a “low-ball bid dressed up as a white knight rescue” that only benefits FTX.

In a court filing, Voyager’s lawyers said the plan “transfers significant value to AlamedaFTX, and completely eliminates the value of assets that are of no interest to AlamedaFTX.”

Under FTX’s plan, first proposed late last week, interested Voyager customers would be able to have an advance on their bankruptcy claims.

They could use this to buy more digital assets on FTX, or withdraw cash.

In a tweet thread, FTX’s CEO Sam Bankman-Fried said that this would give Voyager’s customers the ability to access assets that would otherwise be locked up for a significant time as the case navigates through bankruptcy court.

“To clarify: Our offer would give Voyager customers back 100% of the remaining assets that Voyager has, including claims on anything recovered in the future,” Bankman-Fried tweeted.

Voyager’s lawyers, in the filing, wrote, “It seems clear, however, that AlamedaFTX’s Proposal, which was made in contravention of the proposed Bidding Procedures, was designed to generate publicity for itself rather than value for Voyager’s customers.”

“AlamedaFTX essentially proposes a liquidation where FTX serves the role of liquidator. The “fair value” of Voyager’s cryptocurrency assets and loans is subject to negotiation with AlamedaFTX,” the lawyers wrote.

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