Top FTX Lawyer Orders Documents Preserved as Investigations Ramp Up

The top lawyer at FTX US has instructed all FTX employees to preserve their work-related documents, the latest sign of possible legal exposure for Sam Bankman-Fried’s troubled crypto empire.

On Wednesday, FTX US General Counsel Ryne Miller ordered all staff to retain their emails, messages, notes and documents stemming from their work at FTX, FTX US, Alameda and affiliated companies, according to people with direct knowledge. He called the chain of events of the last few days “disappointing developments” in a company-wide message, the people said.

The instruction underscores the compounding legal risks that could stem from FTX’s sudden collapse. This week, the once mighty crypto exchange froze all withdrawals amid allegations that it was mishandling billions of dollars of customer funds. It's also facing multiple investigations from federal and state officials.

Read more: Divisions in Sam Bankman-Fried’s Crypto Empire Blur on His Trading Titan Alameda’s Balance Sheet

“There are very likely to be civil lawsuits and there's a chance of potential criminal liability,” said Chicago-based attorney Nelson Rosario, who runs a crypto law practice. He said the general counsel’s instruction could be in reaction to or anticipation of investigations.

FTX US is a legally distinct entity from FTX, but the two companies share common ownership and leadership. Sam Bankman-Fried, who founded FTX, tweeted Wednesday that the U.S. arm of his trading empire was “100% liquid,” and that users could withdraw all their funds. He tweeted something similar about FTX prior to revealing that FTX needed rescuing.

FTX declined to comment.