Turkish Units Wanted Out Of Bankruptcy Case By FTX

Key Points:

• Crypto exchange FTX is requesting that Turkish units be excluded from the bankruptcy case’s purview, claiming in a court filing on Friday that Turkish authorities are unlikely to comply with orders from American courts.
• Turkish law enforcement opened an investigation into its operations, and on November 23 they ordered the confiscation of almost all of its assets, rendering it impossible, according to the new U.S. management, to include them in broader restructuring plans.

Crypto exchange FTX is requesting that Turkish units be excluded from the bankruptcy case’s purview, claiming in a court filing on Friday that Turkish authorities are unlikely to comply with orders from American courts.

On November 11, FTX filed for bankruptcy in the United States, and its new owners are now working to wind up the affairs of as many as 134 businesses around the globe.

After FTX filed for bankruptcy, Turkish law enforcement opened an investigation into its operations, and on November 23 they ordered the confiscation of almost all of its assets, rendering it impossible, according to the new U.S. management, to include them in broader restructuring plans.

“The orders entered by this Court do not have legal or practical effect in Türkiye and the Debtors have no reason to believe that the Turkish government will comply with this Court’s orders,” FTX said in a filing to the Delaware bankruptcy court. “As a result, the Debtors are unable to exercise sufficient control over the affairs of the Turkish Debtors in order to comply with their duties under the Bankruptcy Code.”

The request relates to SNG Investments, a fully owned subsidiary of FTX Trading Ltd.’s trading arm Alameda Research, and FTX Turkey, a local exchange that parent company FTX Trading Ltd. owns 80% of. Both are characterized as “not strategic” within the corporate group in the filing, with the majority of their assets and operations concentrated in Turkey.

According to Turkish law, the parent company still has options, and some Turkish creditors have already begun bringing individual lawsuits in regional courts, according to the document. Because of their mistrust in regional banks and the weakening of the lira, employees frequently deposit their wages into the business.

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