FTX’s bankruptcy lawyers have asked Judge John Dorsey for permission to subpoena Sam Bankman-family Fried’s members to testify under oath about any financial benefits derived from FTX’s business.
FTX also intends to question several former executives in order to discover any assets that can be used to repay the bankrupt exchange’s creditors.
According to Bloomberg, Bankman-father, Fried’s law professor Joseph Bankman, provided tax advice to FTX employees, while Bankman-brother Fried’s Gabriel engaged in political lobbying from a plush Washington, D.C. residence.
Barbara Fried, Bankman’s wife, allegedly received funds from FTX for a political action committee called Mind the Gap. Fried also spent a significant amount of money in 2022 supporting mostly Democratic candidates.
Despite recently discovering $5 billion to compensate users, the lawyers continue their aggressive pursuit of outstanding FTX assets. Furthermore, its new CEO, John J. Ray III, stated that a new task force was investigating the feasibility of reopening the exchange’s doors in order to obtain the liquidity required to reimburse customers.
Gabriel Bankman-Fried, Sam’s younger brother, is the former director of a non-profit and political action committee dedicated to pandemic prevention.
The brothers’ participation in the initiative demonstrated their dedication to a philosophy known as effective altruism. They used FTX funds to make a variety of investments, including donating $12 million to a California ballot initiative aimed at detecting emerging viruses and funding the political campaign of an Oregon biosecurity expert.
In total, Protect Our Future, their political action committee, spent $28 million on Democrats in 2022. The non-profit Guarding Against Pandemics spent $1 million on Capitol Hill lobbying for a new pandemic plan.
Gabriel Bankman-Fried resigned from his position at the Guarding Against Pandemics following the collapse of FTX in November 2022. One of the brothers’ advisers said he was convinced that the younger Bankman-Fried was sincere about pandemic prevention, but he wasn’t sure about Sam.
“I’m certain Gabe was concerned about pandemics… “I’m not sure what to make of [Sam],” he told the Washington Post.
The application to subpoena the family is more concerned with their use of assets obtained through the alleged defrauding of FTX customers than with their biological relationships with Sam Bankman-Fried.
Lawyers claim that Bankman-parents Fried’s lived in a $16.4 million Bahamas mansion despite knowing it was owned by FTX. They also claim Gabriel used fraudulent funds to purchase a luxurious home in Washington, D.C. A spokesperson for the parents stated in December 2022 that they were in the process of returning the property’s title deeds.
Rather than the FTX bankruptcy case, Joseph Bankman-Fried has hired a lawyer for the separate criminal case against his elder son. His attorney is reportedly in talks with FTX attorneys.
Judge Dorsey must approve any request by FTX lawyers to subpoena Sam Bankman-family Fried’s pending a voluntary resolution.
