Key Takeaways
- The exchange is now seeking approval from a Delaware Bankruptcy Court judge to issue subpoenas to CAIS.
- FTX claims to have provided $6.5 million in financial aid to CAIS between May and September 2022.
- FTX has alleged that CAIS has thus far rejected requests to voluntarily provide an accounting related to these substantial transfers.
In a recent bankruptcy court filing on October 25, FTX, the embattled crypto exchange, is making a move to demand information regarding substantial payments it had previously made to the Center for AI Safety (CAIS), a nonprofit organization dedicated to the advancement of AI safety.
FTX claims to have provided a staggering $6.5 million in financial support to CAIS between May and September 2022. This substantial financial backing occurred several months prior to FTX’s collapse and subsequent declaration of bankruptcy.
The exchange is now seeking approval from a Delaware Bankruptcy Court judge to issue subpoenas to CAIS. These subpoenas are aimed at gathering critical information about the payments, funds, communications, agreements, or contracts that may have transpired between CAIS and FTX, its affiliates, and former executives.
Notably, FTX has alleged that CAIS has thus far rejected requests to voluntarily provide an accounting related to these substantial transfers. Additionally, it has been revealed that the two entities engaged in a phone call in August and exchanged emails in early October, adding a layer of complexity to the situation.
FTX’s request for these subpoenas is seen as a significant step in the exchange’s ongoing efforts to recover funds. The ultimate goal is to repay the numerous creditors and customers who found themselves entangled in the aftermath of FTX’s collapse in November 2022.
During a recent court hearing, investment banker Kevin Cofsky of Perella Weinberg Partners disclosed that FTX had garnered multiple bids for a potential restart, potentially offering a glimmer of hope for the exchange’s recovery efforts.
The scope of FTX’s requested subpoenas is broad, as it seeks to obtain transfers, documents, and communications from CAIS that pertain to FTX, FTX Philanthropy, the FTX Foundation, the FTX Future Fund, and any officer, director, contractor, or employee associated with FTX.
Moreover, FTX is specifically interested in communications involving key figures, including co-founders Sam Bankman-Fried and Gary Wang, as well as Sam Bankman-Fried’s father, Joseph Bankman, and his brother, Gabriel Bankman-Fried.
This latest development underscores FTX’s determination to explore all avenues for fund recovery. In a June report, the exchange indicated that it had managed to recoup approximately $7 billion but required an additional $1.7 billion to cover what it alleges to be customer funds that were misappropriated.
FTX’s chief, John Ray III, has been actively focused on reclaiming funds from former affiliates to honor the financial commitments to creditors and customers.
In September, FTX initiated efforts to recover luxury properties and what it refers to as “millions of dollars in fraudulently transferred and misappropriated funds” from the parents of Sam Bankman-Fried, the former CEO and founder of FTX.
