FTX Bankruptcy Judge Considering Proposal To Open An Independent Investigation

Key Points:

• The FTX bankruptcy judge weighs whether to open an independent investigation against crypto company FTX.
• Previously, the US Department of Justice made this proposal intending to benefit creditors and customers.
• However, FTX objected, saying that the action was redundant and costly.

FTX bankruptcy judge John Dorsey will consider whether to pass an independent investigation into FTX, according to Reuters.

The US Department of Justice’s bankruptcy watchdog had previously urged John Dorsey to appoint an independent investigator. State securities regulators in Texas, Vermont, and Wisconsin backed the Justice Department’s proposal, saying a neutral report would benefit creditors and customers.

But FTX said investigators would only repeat work already done by FTX, creditors, and law enforcement agencies while increasing costs because inspectors will only copy work already done. Conducted by FTX, creditors, and law enforcement agencies… FTX’s creditors’ committee sided with FTX, saying the proposed investigation is redundant.

Previously, FTX’s new CEO Ray, who worked with court-appointed examiners while leading Enron Corp and Residential Capital through bankruptcy, has said that those two cases cost a combined $150 million and provided “minimal” benefits to examiners, according to court filings.

However, a demonstration from Celsius has shown that an independent investigation is a practical action. An assessor has been appointed in the individual bankruptcy of crypto lending network Celsius Network and tasked with investigating claims that Celsius operates as a Ponzi scheme and misleads customers about the security of its customers full of their crypto deposits.

In an effort to collect money from creditors, FTX sent an “ultimatum” to politicians who received donations from Sam Bankman-Fried to repay by the end of February. Lower-level employees, as well as companies that also benefit from violations, are also required to return.

Although after the collapse of FTX in November 2022, many politicians gave up their interests by donating the sponsored amount to charity, this action has no meaning for the recovery process in debt.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Foxy

Coincu News