US Trustee Opposes Subpoena Proposals For FTX Founder, Staff In Bankruptcy Case

The U.S. Trustee, a branch of the Department of Justice responsible for bankruptcy cases, has opposed proposals to subpoena Sam Bankman-Fried, founder of the bankrupt crypto exchange FTX, along with his family and senior staff.

The plans are set to be discussed at a hearing on Wednesday.

However, the U.S. Trustee, Andrew Vara, stated in a legal filing that this would duplicate the examination of the exchange's downfall, which has not yet been appointed.

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The appointment of an independent examiner will be discussed at a hearing on Monday, with new FTX CEO John Ray scheduled to give testimony.

Vara added that if the court directs the appointment of an examiner, their responsibilities would include investigating the same entities and transactions that the proposed subpoenas would target.

FTX filed for bankruptcy on Nov. 11, and Bankman-Fried resigned as CEO on the same day.

FTX's new management stated that Bankman-Fried and his family could have valuable information about the allegedly misappropriated funds leading up to the company's collapse.

FTX also claimed that key witnesses are not cooperating, including co-founder Gary Wang and the head of the trading arm, Caroline Ellison, who has declined to provide the requested information.

The U.S. Trustee also opposed a request for information related to a hack and subsequent laundering of over $300 million worth of digital assets that took place on Nov. 11-12.

A bipartisan group of senators has called for an independent examiner to be appointed in the FTX case, instead of allowing the company to carry out its own investigation. In a similar case with the bankrupt crypto lender Celsius, an examiner was appointed and produced a report.

In a recent filing, Vara argued that an examiner for FTX was required by law due to the large sums involved.

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