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FTX founder Sam Bankman-Fried attempted to stall bankruptcy proceedings in the U.S. in November in order to transfer assets from his crypto exchange to foreign regulators, the Justice Department alleged in a filing Monday, the Wall Street Journal reported. Bankman-Fried hoped foreign regulators would treat him leniently and eventually allow him to regain control of FTX, according to federal prosecutors. FTX’s lawyers wanted to secure the assets for bankruptcy at the time he was trying to move the money, the prosecutors said. He made the statements to Gary Wang, an FTX co-founder and the former chief technology officer, the filing said. Wang pleaded guilty to federal fraud charges and is cooperating with prosecutors. The Manhattan U.S. attorney’s office charged Mr. Bankman-Fried last month with stealing billions of dollars from FTX customers and misleading investors. He pleaded not guilty and was released on a $250 million bond. He is currently under court-ordered confinement in his parents’ Palo Alto, Calif., home. Last week, Bankman-Fried’s lawyers asked a judge to remove bail conditions that prohibit him from accessing assets held by FTX and his investment firm Alameda. Bankman-Fried’s alleged misuse of FTX and Almeda funds in November were a reason for denying his lawyer’s request, prosecutors said in the Monday filing.

BlockFi Inc. won bankruptcy court approval to set up an auction for the crypto lender’s digital coin mining business, Reuters reported. The company wants to get bids in as quickly as possible to take advantage of current market conditions, BlockFi lawyer Francis Petrie said during a video court hearing Monday morning. The company has already gotten some initial bids for various assets and expects more, Petrie told U.S. Bankruptcy Judge Michael Kaplan. “We’ve received substantial interest in the market for bidding purposes and current volatility in the cryptocurrency market, which means we need to act quickly,” Petrie said. BlockFi is selling computer equipment used for mining digital coins at a time when the crypto mining business is on the upswing. Last week, another bankrupt crypto platform, Celsius Network, said it’s aiming to sell tens of thousands of mining machines. Bids for the mining assets are due Feb. 20 and an auction will be held about one week later, Petrie said. The company will return to court in March for approval of any proposed deal that comes out of the auction.

Sen. Elizabeth Warren (D-Mass.) and Senate Finance Committee chairman Ron Wyden (D-Oregon) are asking the Public Company Accounting Oversight Board to do more to regulate the audits of cryptocurrency companies in the wake of recent high-profile bankruptcies of companies like FTX, AccountingToday.com reported. In a letter Wednesday to PCAOB chair Erica Williams, they pointed to the "sham audits" touted by crypto companies. They pointed to the limited audits provided by firms like Prager Metis and Armanino for FTX prior to its collapse, and the insufficient "proof of reserve" examinations offered by other firms. "The ongoing reports of scandalous accounting practices in the crypto industry raise questions about crypto accounting firms' independence and the methods they employed to assess the integrity of crypto firms' financial statements, underscoring the need for the Public Company Accounting Oversight Board to act to ensure accountability," Warren and Wyden wrote. "When PCAOB-registered auditors perform sham audits — even for firms that may lay outside of the PCAOB's jurisdiction — they tarnish the credibility of the PCAOB and undermine confidence in the PCAOB-registered auditors that investors and the public rely on when making investment decisions."

A Roman Catholic diocese on Long Island, New York, proposed a bankruptcy plan on Friday, moving to retake control of its chapter 11 case after a committee representing sexual abuse victims filed a competing restructuring proposal, Reuters reported. The Diocese of Rockville Centre, one of the largest in the United States, said in a statement Friday that the proposed aggregate payment and the payment each abuse victim would receive under its proposed plan are "well in excess of any other Diocesan chapter 11 plan in history." The diocese filed for chapter 11 bankruptcy in New York in October 2020, citing the cost of lawsuits filed by childhood victims of clergy sexual abuse. The state’s Child Victims Act, which took effect in August 2020, temporarily enabled victims of child sexual abuse to file lawsuits over decades-old crimes. The diocese's efforts to reach a comprehensive settlement with more than 600 sexual abuse claimants stalled over its two years in bankruptcy. The breakdown in discussions caused the official committee that represents creditors, including abuse victims, in a rare move to propose a restructuring plan without input from the diocese on January 19. The committee's plan would require the diocese to pay $41 million to abuse victims, plus additional payments from the sale of property and future insurance proceeds. Parishes and other non-bankrupt affiliates could opt into the settlement for an aggregate $200 million contribution.

A senior Commodity Futures Trading Commission official says the agency needs the power to approve or reject an unregulated company’s acquisition of a derivatives exchange, Bloomberg News reported. The planned sale of crypto derivatives exchange LedgerX, a solvent piece of Sam Bankman-Fried’s collapsed FTX empire, has raised concerns about the CFTC’s authority over these acquisitions. LedgerX and other parts of the business are being auctioned off as part of the FTX bankruptcy proceedings. CFTC Commissioner Kristin Johnson, a Democrat, is calling for Congress to give the regulator the power to nix or give the nod on such purchases. Otherwise, it’s left largely in the dark about companies that could easily enter U.S. markets through buyouts, she said. “It’s imperative that we as a regulator are in dialogue and open communication with them,” Johnson said in an interview Friday on “Bloomberg Markets: The Close.” “As of now, we have no approval authority with respect to any element or the acquisition of LedgerX.” Initial bids for LedgerX were due Jan. 25, with a final auction scheduled for March 7. Bidders haven’t been publicly disclosed.

Many FTX customers in Asia and Europe are navigating the company’s complex bankruptcy proceedings on their own, pitting them against a convoluted corner of the U.S. legal system in a language many don’t speak, WSJ Pro Bankruptcy reported. FTX built an international customer base by making crypto trading easily accessible on its app in more than a dozen languages. Now overseas traders are forced to take a crash course in esoteric chapter 11 proceedings and sift through nearly 600 court filings in English to glean what might become of their accounts. In most corporate bankruptcies, creditors are financial firms well versed in chapter 11. But FTX’s customers include many retail investors who have never dealt with chapter 11 before and don’t have the resources to hire legal help. Some non-English-speaking FTX customers try to bridge the gap with translation apps and by banding together on social media. Others rely on their lawyers to translate court documents, attempting to figure out how much they might get for their accounts. The language barrier compounds the difficult task of making accessible voluminous chapter 11 filings, leaving international customers largely in the dark. The barriers to understanding FTX’s bankruptcy have made it harder for depositors to determine their best course of action, whether they should sell their accounts now at a deep discount or hold on for potentially more money. Non-English-speaking customers may also be more likely to be shut out of a process that will determine how much money they get back because they are less likely to vote on a future bankruptcy repayment plan due to the lack of understanding.

U.S. prosecutors on Friday asked a Manhattan judge to impose tougher bail conditions on Sam Bankman-Fried, expressing concern that the founder of the FTX cryptocurrency exchange might tamper with witnesses or destroy evidence in his criminal case, Reuters reported. Citing Bankman-Fried's "recent attempts to contact prospective witnesses," prosecutors asked U.S. District Judge Lewis Kaplan to ban Bankman-Fried from communicating with current or former employees of FTX or his Alameda Research hedge fund, other than family, unless a lawyer is present. They also asked that Bankman-Fried not use Signal or other encrypted call and messaging applications, though he could still communicate through text messages, email and the phone. Bankman-Fried, 30, has been free on $250 million bond and required to live with his parents since pleading not guilty to looting billions of dollars from the now-bankrupt FTX.

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, Reuters reported. 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 by 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.