FTX case: lawyers overwhelm Sam Bankman-Fried during the first hearing

Record of hearing – In the case FTXlawyers and justice have just taken action to try to shed light on the progress events, on responsibilities of each, but also to find a solution out of crisis. During this first audienceit was about procedurebut also of protection of the bankrupt platform’s current holdings. What emerges from this first meeting is above all the management calamitous of Sam Bankman-Friedwhose public statements continue to embarrass FTX’s lawyers.

Procedural issue: FTX before the Delaware judge

This hearing was held within the framework of the chapter 11 of US bankruptcy law which stipulates that a company placing itself under its protection may continue to operate under control of Justice. This is therefore the first hearing in this file and it took place at the Bankruptcy Court of Delawarein Wilmington. About 1,500 people attended the simulcast on Youtube and on Zoom.

The interests of FTX are defended by master James Bromleypartner at Sullivan and Cromwell while justice is represented by the judge John T Dorsey. It was immediately question of procedure when the lawyers of FTX specified that the liquidators of the Bahamian agreed to combine the shares in Delaware. All parties agree on the need for a place unique for decision-making and between New York and Delaware, the decision has been made.

Delaware justice will have a lot to do in this case

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Protect company assets and sensitive information

James Bromley began his presentation by explaining that the teams of FTX had to face at least a pirate attack and that the conservation of the company’s assets was his priority. By assets, he means cryptocurrencies and different currencies. Moreover, on the date of 20 November, a specialized company named Alvarez & Marsal was able to determine that FTX’s cash amounted to 1.24 billion of dollars.

But just as important as the money, he made a point of specifying that the protection of information was highly strategic. These include the list of clients of the platform, the disclosure of which could harm the sale potential of the company, but also to the security and the privacy of these same customers. Moreover, in this regard, we learned that the three zones geographical main customers were the Cayman Islands (22%), the US Virgin Islands (11%) and China (8%). Would some have an interest in remaining discreet about their assets in tax havens?

What an extraordinary and unenviable destiny for this young CEO who became a Wall Street star before falling heavily before the eyes of the whole world.  Sam Bankman-Fried will have deceived and disappointed many people with the bankruptcy of FTX which will have seen him go from business genius to hated figure in the crypto community.
Sam Bankman-Fried has fallen from his pedestal since tongues were loosened

Settling the cumbersome legacy of Sam Bankman-Fried

But what emerges from this first hearing is clearly the calamitous management of Sam Bankman-Fried whose ears must have been ringing on Tuesday afternoon. Pieces selected from the interventions of FTX lawyers:

“We are dealing with a strange animal. (…) FTX debtors were not particularly well treated to put it mildly. (…) FTX was run as a personal fiefdom of Sam Bankman-Fried under the control of a small group of inexperienced and incompetent individuals. (…) FTX was run with an absence of control over the business never seen by any of us in our careers. (…) We now have to work to restore order to the disorder. »

He concludes by stating that the bankruptcy of FTX is the biggest failure in the history of crypto, before welcoming the work put in place by the new CEO, John Ray. Acquisitions were also discussed real estate in the Bahamas of the group estimated at at least $121 million.

And now ? All these people have an appointment on December 16 for another hearing in order to take stock of the current procedure and to see what the new management team will have been able to do. Especially with the 160 employees still under contract who are waiting to know what their fate will be. Hoping that by then other industry behemoths don’t fill the bench of the bankruptcy court.

The bankruptcy of FTX is there to remind us that we must remain cautious in this still very young ecosystem. Get into the habit of healthy distrust. Join AscendEX, because by performing very simple daily tasks, you will receive satoshis from bitcoin mining directly on your wallet. And to start well, 10,000 satoshis as a registration bonus thanks to our link (commercial link).

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