SBF’s Legal Team Battles Voyager Subpoena: Is it Procedurally Flawed or a Fifth Amendment Violation?

The tangled web of crypto bankruptcies continues to unravel, and the latest thread involves a legal challenge from none other than Sam Bankman-Fried (SBF), the former CEO of FTX. This time, it’s Voyager Digital, the crypto lender that went bankrupt in July 2022, seeking documents from SBF. But SBF’s legal team is pushing back hard, claiming the subpoena is riddled with flaws. Let’s dive into the details of this escalating legal standoff.

What’s the Core Issue? Voyager’s Subpoena Under Scrutiny

Voyager’s creditors are digging deep into FTX’s attempted bailout of Voyager before its collapse. To get to the bottom of things, they issued a subpoena to Sam Bankman-Fried, demanding specific documents. However, SBF’s legal representatives are arguing that this subpoena is not just inconvenient; it’s fundamentally flawed.

Here’s a breakdown of the key arguments against the Voyager subpoena:

• Procedural Flaw: Wrong Recipient? The subpoena wasn’t directly served to Sam Bankman-Fried. Instead, it was given to his mother, Barbara Fried. SBF’s lawyers argue this is a critical error. Legal precedent, they claim, requires personal delivery to the individual named in the subpoena, not a substitute.
• Excessive Burden: Too Much, Too Soon? The subpoena demands a massive 49 categories of documents with a very tight deadline – just one working day after it was issued, and right before a long weekend! SBF’s team argues this is an unreasonable and unfair burden to place on anyone.
• Fifth Amendment Concerns: Self-Incrimination Risk? This is perhaps the most serious claim. SBF’s lawyers suggest that complying with the subpoena could force him to produce documents that might incriminate him in the ongoing criminal case related to FTX’s collapse. They highlight that the requested documents are linked to loans between FTX and Alameda Research, which are central to the criminal investigation.

In essence, SBF’s legal team is throwing everything at the wall to get this subpoena tossed out. They are arguing on technicalities of service, the practicality of compliance, and the fundamental constitutional right against self-incrimination.

Rule 45 Subpoena: The Legal Weapon in Question

The specific type of subpoena used here is called a Rule 45 subpoena. Think of it as a legal demand for documents. It’s a common tool in litigation, allowing parties to obtain records and papers needed for court cases.

However, as SBF’s lawyers point out, even standard legal tools have rules. And according to them, Voyager may have missed a crucial step: personal service.

“The Rule requires that Mr. Bankman-Fried be personally served with the subpoena, and leaving it in Barbara Fried’s hands does not meet this requirement. Counsel writes, citing earlier decisions from various instances, “Substitute service is generally not permissible to serve a Rule 45 subpoena.”

Why Does Voyager Need These Documents? Unpacking the FTX-Voyager Connection

To understand Voyager’s urgency, we need to remember the backdrop: Voyager’s bankruptcy and FTX’s attempted rescue. When Voyager faced financial turmoil, FTX, under Sam Bankman-Fried, stepped in with a proposed bailout. Voyager’s creditors are now scrutinizing this attempted deal, likely looking for answers to questions like:

• What exactly was FTX offering Voyager?
• Were there any hidden conditions or clauses?
• Did this attempted bailout contribute to or mask any underlying issues at FTX?
• Were Voyager’s creditors fully informed about the details of this deal?

The documents Voyager is seeking from SBF are likely crucial to answering these questions and understanding the full picture of the relationship between FTX and Voyager leading up to their respective collapses.

The Fifth Amendment Card: A Serious Play?

The invocation of the Fifth Amendment is a significant escalation. This amendment protects individuals from being compelled to incriminate themselves. SBF’s legal team is arguing that providing the requested documents could force him to reveal information that could be used against him in the criminal case.

Each of the document requests, they add, “calls for papers that may be related to the Criminal Case, in which loans by and to Alameda are at issue.”

 “The requested production would require examining a substantial amount of material and determining whether or not they are responsive—a procedure that could be construed to constitute an incriminating testimonial conduct in the Criminal Case.”

This argument suggests that the Voyager subpoena isn’t just about civil proceedings; it could be used as a backdoor to gather evidence for the criminal case against SBF. Whether this argument holds water in court remains to be seen.

What’s Next? The Clock is Ticking

A hearing for Voyager’s creditors is scheduled for February 22nd in New York. This legal challenge to the subpoena will likely be a key topic of discussion.

Here’s what to watch out for:

• Court’s Decision on Procedural Flaws: Will the court agree that serving the subpoena to SBF’s mother was a fatal error?
• Burden Argument: Will the court find the document request and deadline unreasonable?
• Fifth Amendment Stance: How seriously will the court take the self-incrimination concerns? This could be the most complex and impactful aspect of the challenge.

The Bigger Picture: Crypto Legal Battles and Transparency

This legal tussle is more than just a procedural squabble. It’s a window into the high-stakes legal battles unfolding in the aftermath of the crypto market turmoil. It highlights the intense scrutiny facing key figures like Sam Bankman-Fried and the lengths to which parties are willing to go to uncover information and assign responsibility.

For Voyager creditors, the outcome of this subpoena challenge could directly impact their ability to recover assets. For the wider crypto world, it’s another reminder of the increasing legal and regulatory pressures in this evolving space.

In Conclusion: A Subpoena in the Crosshairs

The Voyager subpoena saga is a microcosm of the larger complexities in the crypto legal landscape. From procedural technicalities to constitutional rights, the arguments being made by SBF’s legal team are multifaceted and significant. As the February 22nd hearing approaches, the crypto world will be watching closely to see how this legal challenge unfolds and what it means for the ongoing Voyager bankruptcy proceedings and the broader pursuit of transparency in the digital asset realm. Stay tuned, because this legal drama is far from over.