news/ABNB/2023.01.26/FTX opposes new bankruptcy investigation as it probes Bankman-Fried connections.txt

(Adds FTX statement on creditor list, statement from Mind the
Gap)ZURICH/LONDON, Jan 26 (Reuters) - FTX has objected to a
U.S. Department of Justice request for an independent
investigation into the once-prominent crypto exchange's
collapse, saying it is already conducting a wide-ranging probe
that includes family members of FTX founder Sam Bankman-Fried.FTX said in a court filing in Wilmington, Delaware, late on
Wednesday that the DOJ's proposed review would only add cost and
delay to its bankruptcy case. FTX acknowledged "fraud,
dishonesty, incompetence, misconduct, mismanagement, and
irregularity" in its past conduct, but said that its previous
wrongdoing is already being probed by the company's new
management, its creditors and law enforcement agencies.As part of its own investigation, FTX asked U.S. Bankruptcy
Judge John Dorsey, who is overseeing its Chapter 11 proceedings,
to help it secure documents from Bankman-Fried, members of his
family and other insiders with information about FTX
transactions that used "misappropriated and stolen" funds. These
transactions, it said, include a $16.7 million Bahamian real
estate purchase under the name of Bankman-Fried's parents,
Joseph Bankman and Barbara Fried.FTX is also seeking information about political donations
connected to Bankman-Fried, asking wide-ranging questions about
Mind the Gap, a political action committee founded by Barbara
Fried, and Guarding Against Pandemics, an advocacy organization
founded by Sam Bankman-Fried and his brother, Gabriel
Bankman-Fried. FTX said Guarding Against Pandemics'
multimillion-dollar Washington, D.C., headquarters was purchased
with misappropriated funds.Bankman-Fried and members of his family could not
immediately be reached for comment.A spokesperson for Mind the Gap said it did not receive
direct contributions from Sam Bankman-Fried, although
Bankman-Fried made donations to some political causes it
recommended to its donor network.FTX, once among the world's top crypto exchanges, shook the
sector in November by filing for bankruptcy, leaving an
estimated 9 million customers and other investors facing total
losses in the billions of dollars.The U.S. Department of Justice's bankruptcy watchdog has
called for an independent investigation into its collapse, a
request that received backing from a bipartisan group of U.S.
senators.FTX’s new CEO, John Ray, who worked with court-appointed
examiners while leading Enron Corp and Residential Capital
through bankruptcy, is prepared to testify that examiners in
those two cases cost a combined $150 million and provided
"minimal" benefits to creditors, FTX said.FTX's official committee of creditors joined the company in
opposing the appointment of an examiner.FTX also on Wednesday night filed a new list of creditors in
bankruptcy court, which included financial watchdogs and
government agencies from the United States, Japan and
Switzerland, as well as companies including Airbnb Inc
and crypto giant Binance.Airbnb and Binance did not immediately respond to a request
for comment.The U.S. Treasury's Financial Crimes Enforcement Network
(FinCEN) and U.S. Internal Revenue Service (IRS) are among those
on the new list of creditors. It did not give details of the
nature or amount of monies owed.FTX said on Thursday that the list was meant to ensure the
broadest possible outreach to potential stakeholders in its
bankruptcy, and that FTX does not necessarily owe money to each
name on the creditor list.FTX said last year it owed its 50 biggest creditors nearly
$3.1 billion. Dorsey in January allowed FTX to keep secret the
names of 9 million of its individual customers for three months.Sam Bankman-Fried, who has been accused of stealing billions
of dollars from FTX customers to pay debts incurred by his
crypto-focused hedge fund, has pleaded not guilty to fraud
charges. He is scheduled to face trial in October.(Reporting by Noele Illien in Zurich, Tom Wilson in London and
Dietrich Knauth in New York
Editing by Kirsten Donovan, Alexia Garamfalvi and Matthew Lewis)