FTX Debtors Seek Dismissal of Turkish Entities in Chapter 11 Bankruptcy Proceedings – According to a recent bankruptcy court filing, FTX debtors have requested that the company’s Turkish businesses be removed from the Chapter 11 proceedings. FTX Turkey and SNG Investments are among the FTX-related entities cited in the court complaint. According to the debtors, FTX Turkey was a locally run crypto exchange, while SNG Investments was a 100% owned Alameda Research subsidiary that served as a market maker.
Shortly after FTX collapsed, lawyers say “Turkish authorities froze and seized substantially all the assets of the Turkish debtors.” FTX’s lawyers insist the two entities should be expelled from the bankruptcy proceedings, as they “believe it is in the best interests of the debtors and their stakeholders.” Furthermore, the debtors do not think the Turkish government will comply with the U.S. bankruptcy process.
“The debtors do not expect the Turkish authorities or any liquidator in Türkiye to seek recognition of their actions in the United States, and the debtors would intend to object to such recognition if reciprocity is not established,” the filing explains. The news follows FTX lawyers asking the court’s permission to subpoena FTX co-founder Sam Bankman-Fried (SBF) and his inner circle.
The filing notes that while SBF has publicly stated he’d like to “explain what happened” and “try to help customers,” he has “not responded to or complied” with requests. “As a result, a court-authorized subpoena is necessary,” the attorneys explained in the motion. In the latest filing, the debtors stress that dismissal of the Turkish debtors’ Chapter 11 cases :is warranted.
Moreover, given that Turkish authorities froze the debtors’ assets, a Chapter 7 conversion “would not serve the best interests” of the debtors’ estates and creditors, the filing adds. The court document also details that the funds were seized by the Turkish government because the Turkish Financial Crimes Investigation Board (MASAK) was conducting an investigation into FTX’s business dealings. The lawyers conclude the bankruptcy court would not have any “legal or practical effect” in Turkey.