FTX: Subpoena The Sequel

The real news

The story, straight

When a failed business tries to recover money, it can ask a court to reverse an earlier payment. That's a clawback: a possible refund through a lawsuit, not cash already recovered.

Bloomberg Law reports that FTX's recovery trust seeks $1.76 billion from Binance and its founder Changpeng Zhao over FTX's July 2021 purchase of Binance's stake. The trust alleges FTX was already unable to pay its debts.

That allegation is disputed; the case isn't decided.

Binance and Zhao are defending themselves. They subpoenaed author Michael Lewis and Kevin O'Leary, among others.

A subpoena demands records or testimony for a case. It does not mean its recipient committed wrongdoing.

Lewis and O'Leary aren't defendants here.

Lewis's subpoena seeks unpublished drafts, recordings and fact-checking materials for Going Infinite, his book about Sam Bankman-Fried. Apparently the deleted scenes now have a legal department.

Our imaginary Lil'meme book club needs a forklift instead of a bookmark. That's the gag, not a claim about what those records contain.

The useful part: records let competing claims face evidence. If the trust wins money back, more could be available for creditors, the people owed money.

Neither a subpoena nor a surviving lawsuit guarantees that result.

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