FTX, which was once the biggest cryptocurrency exchange in the world and now is nothing, is looking to expel its Turkish entities from the bankruptcy case. On the 27th of January, FTX filed in the Delaware bankruptcy court to dismiss its Turkish companies from the bankruptcy case. In the filing, FTX argued that the US court orders do not have a legal or practical effect in Turkey.
In the filing, FTX wrote that there’s no reason to believe that the Turkish government will comply with these orders from the court, which means that the crypto exchange will not be able to use adequate control over the affairs of the units in Turkey to comply with its responsibilities under the Bankruptcy Code. A few days after FTX filed chapter 11 bankruptcy on the 11th of November 2022, the Turkish Treasury and Finance Ministry launched a probe into the crypto exchange’s collapse. FTX Turkey also seized the assets of FTX Founder Sam Bankman-Fried.
In the filing, FTX shared many details, such as FTX Turkey is around 80% owned by FTX Trading Ltd, and the remaining 20% is owned by SNG Investments, which is an indirect subsidiary of Alameda Research LLC. In the filing, FTX called FTX Turkey and SNG Investments as not strategic to the global operation of FTX. According to the filing, citizens have begun filing private claims against FTX Turkey Turkish Debtors. Moreover, citizens also initiated execution proceedings against Debtors.
In the filing, FTX also argued that any assets of FTX Turkey located in the country could be subject to those private claims and proceedings. Moreover, FTX said that the local authorities could use them to satisfy any judgments by the courts of Turkey. FTX believes that the dismissal of Turkish entities will be the best for both creditors’ and debtors’ estates. And the continual proceedings will result in a waste of scarce resources and unnecessary fees.