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FTX Files Motion to Remove 2 Turkish Subsidiaries from its Bankruptcy Proceedings

FTX Trading and its affiliated debtors have filed a motion in the US Bankruptcy Court for the District of Delaware to remove two of its subsidiaries in Türkiye, FTX Turkey and SNG Investments, from the ongoing bankruptcy case.

FTX Believes that Turkish Authorities Will Not Comply with Court Orders from the United States

The motion was filed because FTX trading and its debtors do not believe Turkish authorities will follow instructions from courts in the United States.

‘[T]he orders entered by this Court do not have legal or practical effect in Türkiye, and the Debtors have no reason to believe that the Turkish government will comply with this Court’s orders. As a result, the Debtors are unable to exercise sufficient control over the affairs of the Turkish Debtors in order to comply with their duties under the Bankruptcy Code,’ the court filing explained.

80% of FTX Turkey is owned by FTX Trading, with the other 20% owned by a local director. SNG Investments is wholly owned by Alameda Research and operated as a market maker in the country.

Private Citizens in Türkiye Have Already Started Filing Private Claims

In addition, FTX Trading claims that private citizens in Türkiye affected by its bankruptcy are already filing personal claims and ‘initiating execution proceedings against the Turkish Debtors.’ Therefore, FTX Turkey is bound by Turkish courts.

‘Because the worldwide automatic stay is not expected to be enforced in Türkiye, any assets of FTX Turkey located in Türkiye may be subject to those private claims and proceedings and may be converted by local authorities to satisfy any judgments that are entered against FTX Turkey by Turkish courts,’ said the filing. ‘Any remaining assets can be forfeited to the Turkish government pursuant to Turkish law if found to be associated with a crime.’

Türkiye Was Reportedly Investigating SBF For Fraud and Siezed FTX Assets

In November, Türkiye’s Treasury and Finance Ministry launched an investigation into FTX’s founder and former CEO, Sam Bankman-Fried, over potential fraudulent activities. The investigation included Turkish authorities seizing assets belonging to Sam Bankman-Fried and affiliates.

It was rumoured that the seizure of assets belonging to SBF and affiliates was a move by the Turkish government to start the process of making whole its citizens affected by the collapse of the crypto exchange.

~By John P. Njui~

FTX
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