Aug 21, 2023

Bankrupt crypto exchange FTX has revised its motion for settlement after the U.S. Trustee objected to an earlier motion, according to a court filing.

Video transcript

Bankrupt crypto exchange. FTX has revised its motion for settlement after the US trustee objected to an earlier motion. According to a court filing, joining us now to discuss is Coindesk global policy and regulation. Managing editor Nick Day who is also the editor of Coin Desk's state of crypto newsletter. Good morning, Nick. Good morning. All right, let's get into what's going on here. Why did the US trustee object to the previous motion? Um So, you know, based on our uh reporting, the big concern that the trustees seemed to have was that the maximum possible claim was 10 million, which was uh large, too large according to the US trustee's office, uh US trustee for, you know, as a reminder to our viewers is a part of the US government that basically acts as kind of this, uh you know, bankruptcy uh watcher, I guess you could say, uh you know, a lot of times you see them come in and look for malfeasance and things like that. Um Here they seem to be concerned about, you know, how much people could uh claim under the bankruptcy proceedings. Should the, uh you know, resolution process be approved All right. And what is the new proposal gonna look like? Oh, it's, it's, it's a lot smaller, you know, it's a mere $7 million down from 10. All right, we'll just have to keep watching what happens there. But I, I've been waiting to ask you this all weekend, what's happening, um, with Sam Beman Free Bloomberg reports that FTX founder SPF, who is currently jailed in Brooklyn's Federal Detention Center is asking to only be jailed on the weekends. Nick, what is going on here? Yeah, so there were a whole bunch of filings late Friday. Um You know, some of them, I'm gonna, I'll get to the good stuff, but some of them, uh you know, they're kind of fairly standard. The DOJ says that, um you know, it can't provide all of or can't provide internet access to same bank feed for all of the stuff he needs. But they suggest that all of the information he needs for his defense, you know, gets loaded up onto a hard disk and just literally, you know, Ferried over to the detention center. He's at, uh the defense thinks that this is wholly inadequate for helping him prepare for his defense. They want to have Mr Beman feed allowed out to the federal prosecutor's office, um five days a week to work on his defense. Uh They say that this is necessary and critical to allow him to, you know, provide input for his defense. Uh We haven't yet seen, I think an objection. I'm sure we'll see one but we haven't yet seen, uh, much from the DOJ on this. But, you know, during court this did come up as a possibility, uh, you know, and at the time the judge said we'll deal with it when we get to it. So, uh, you know, we'll have to see what the DOJ and what the judge says in response to this motion. What's the likelihood he gets out of jail five days a week ahead of this trial? Nick? So, uh, I guess one really important thing to note is that, um, you know, the way it's phrased, uh, it seems like they'd only be allowing him to go from the detention center to the Do J's offices, uh, where they would have a conference room to work on the defense stuff. So he wouldn't be allowed, you know, for example, onto the streets in New York or even back to his parents' house under house arrest. Um, it would be a very kind of limited release. On the other hand, um, you know, the, I think the question that you'll hear from the DOJ is, you know, five days a week is a lot and what's the cost gonna look like and what are the logistics gonna look like? Um, so I couldn't tell you the likelihood, but I imagine that there will be, uh, you know, a fairly robust debate over, you know, whether or not, this is feasible. All right. And lastly any other updates on the criminal trial or what are you looking at ahead of, uh, the trial starting in October? So, uh, as right now, first off, the thing does seem to still be on schedule for October, uh, we're hearing motions from the defense saying that, you know, they don't have enough time to look through all of the discovery documents. But despite that, no one seems to have made a move yet to try and postpone it. So that's one thing, uh, the other is, you know, we did get a new Super Seating indictment last week. Um, this one basically includes the first seven of the original charges against Sam Mega Fried Folds in campaign finance allegations into one of the other charges. And, um, you know, it's what we expected, there should be an arraignment on that, but I think tomorrow, but, you know, trying to verify that it is tomorrow, uh, where, you know, Mr Rafid will once again, I assume plead not guilty to all the charges laid against him. And, uh, you know, we might hear a little bit more about, uh, you know, just these specific allegations themselves tied to the campaign finance charge, which of course was dropped, uh, earlier this year due to treaty obligations with the Bahamas. All right, Nick, we are going to leave it there. I hope you have a fabulous rest of your Monday and I'll see you tomorrow. That sounds good. That was Coindesk global policy and regulation. Managing editor Nick Day. Don't forget to sign up for the state of crypto newsletter on Coindesk dot com.

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