Sam Bankman-Fried was arrested following the sudden crash of FTX in November 2022. Photo: REUTERS/Eduardo Munoz/File Photo
The founder of the bankrupt cryptocurrency exchange FTX has been accused of refusing to cooperate with the liquidation of a separate company he owned in the Caribbean, according to The Telegraph.
Sam Bankman-Fried is accused in his failure to hand over key documents to the court-appointed liquidators of the now bankrupt holding company Emergent Fidelity Technologies (EFT). He also filed 16 applications to block the process despite claims of relative poverty.
The legal battle is being fought in Antigua, where EFT is registered. Until recently, the holding company owned 56 million shares of stock trading service Robinhood. The $606 million stake was frozen by the US Department of Justice as part of a massive fraud investigation.
Robinhood bought back the shares on Friday. Proceeds from the sale will be held in the US Department of Justice Seized Assets Deposit Fund under terms and conditions set by US Judge Lewis Kaplan, who oversees Mr. Bankman-Freed's fraud case.
FTX's creditors are still pursuing the money from this stake and the EFT's investigation is ongoing.
They are furious because they claim Mr. Bankman-Fried prevented the liquidation.
In the written In testimony seen by The Telegraph, the liquidators stated, “Mr. Bankman Fried did not cooperate with the liquidators or provide EFT corporate documents.”
FTX was once the world’s second-largest cryptocurrency exchange and was valued at 32 billion dollars.
Following the sudden collapse last November and the arrest of Bankman-Fried, the Antigua High Court appointed Cayman Islands-based liquidators Angela Barkhouse and Quantuma's Tony Shukla as liquidators of all EFT assets.
According to court documents, they were investigating a complex network of complex EFT assets on behalf of FTX lenders.
Lenders believe they have rights to EFT assets. One of them, Ben Shimon, stated that he «invested in FTX Trading, which was improperly diverted to the company Emergent, the founder, director and majority owner of which was Bankman-Fried.»
Lenders' lawyers believe that Mr. Bankman- Friedman's legal battle in Antigua may have violated his bail conditions, which limit his expenses to $1,000 a day.
Publicly, Mr. Bankman-Friedman complains about restrictive bail conditions and says he has his last $100,000 in cash.
Creditors sued to disclose the Bankman-Freed funds, but to no avail.
The Telegraph asked his lawyer, David Dorsett, twice how his client paid legal fees, but he declined to answer. comment.
Mr. Dorsett said: “Mr. Bankman-Fried filed an application to dismiss the proceedings in the High Court of Antigua (liquidators) and to cancel the service of the statement of claim on him.
>“If we are successful in granting our application, the positions and actions of the liquidators will be in serious question.
In response to Mr. Bankman-Fried's attempts to remove the liquidators, Judge Ramdhani said: “This is an urgent task. The task of the liquidators is to ensure that the EFT's assets are fully accounted for.
«To date, Mr. Bankman-Fried has not provided assistance with respect to the financial statements.»
His Counsel, Mr. Dorsett, stated: «Mr. Bankman-Fried has complied with all orders regarding his cooperation with the liquidators in the Antiguan case.»
In some cases, Mr. Bankman-Fried has been ordered to pay legal compensation. expenses and securing expenses in the Antiguan Court. He did not pay most of those fees.
Mr. Bankman-Fried is currently in jail after a judge in New York waived his bail, accusing him of trying to influence witnesses ahead of a criminal trial. process in October.
He is accused of defrauding investors in connection with the collapse of FTX. The trial could become one of the largest fraud cases in history. The former billionaire denies all allegations.
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