By James Davis
On Tuesday, John T. Dorsey, the Judge presiding over FTX’s bankruptcy case, approved the exclusion of the exchange’s entities operating in Turkey from the ongoing bankruptcy proceedings. The court decision comes following FTX’s request a few weeks ago.
In its filing last month, the collapsed exchange argued that including Turkey-based subsidiaries in the case was not strategic and could only lead to wasting resources. FTX also added that it was unlikely that the Turkish government would comply with US court orders.
FTX Trading Limited owns about 80% of FTX Turkey, while SNG Investments has a 20% stake in the firm. The FTX filing stated that Turkish customers had already started private claims against the Turkey-based entity. It also suggested that local authorities will likely use the seized assets to fulfill orders made by Turkish courts.
Turkish Authorities Launch Investigation Into FTX Turkey
Authorities in Turkey launched an investigation into the FTX subsidiary immediately after its parent firm reported liquidity issues in November. The Turkey Financial Crimes Investigation Board took control of the entity’s assets within a week. It also leveled fraud allegations against the firm’s then-CEO, Sam Bankman-Fried.
The disgraced crypto guru is currently charged with money laundering and wire fraud, among other charges. Taking into account the number of these charges and the losses suffered by FTX creditors, Bankman-Fried could serve a jail term of about 120 years in case he’s found guilty on all eight counts.
The FTX founder pled not guilty in early January. He will appear again before the court on October 2. Currently, he is under house arrest at his parents’ California home. Bankman-Fried’s parents, together with two undisclosed individuals, signed a $250 million bond agreement that led to his release.
Who’s the New FTX Boss?
FTX is now headed by John J. Ray III, who is also a bankruptcy lawyer. The new CEO gained popularity for his role as the Enron Creditors Recovery Corp chairman. At the time, he ensured that over $800 million was returned to the creditors of Enron.
Enron, an energy firm, had assets worth over $65 billion at the time it filed for bankruptcy. On the contrary, the actual value of FTX’s assets is still unclear.