“FTX Collapse Sparks Call for Independent Investigation by Justice Department”
The U.S. Trustee in FTX’s bankruptcy case has filed an appeal against a recent court order by Judge John Dorsey, who denied a motion to appoint an independent examiner to investigate the bankrupt exchange’s collapse. The U.S. Trustee, who was selected by the Department of Justice to maintain the integrity of FTX’s bankruptcy proceeding, argued that an independent examiner was necessary to ensure transparency and accountability in the case. However, Judge Dorsey rejected the motion, citing concerns about the cost and potential risks of an investigation.
FTX, which collapsed last November, owes billions of dollars to creditors. The judge estimated that an investigation could cost more than $100 million, a bill that would be footed by FTX’s estate. The U.S. Trustee argued that the cost of an investigation was justified, given the magnitude of the case and the need to protect the interests of creditors.
The appeal by the U.S. Trustee is the latest twist in the FTX bankruptcy case, which has been marked by legal battles and controversy. The exchange, which was once one of the largest in the world, collapsed amid allegations of fraud and mismanagement. Its founder, Sam Bankman-Fried, has denied any wrongdoing and has vowed to cooperate with the bankruptcy proceedings.
The outcome of the appeal is uncertain, but it could have significant implications for the FTX case and for the broader cryptocurrency industry. If the U.S. Trustee’s appeal is successful, it could pave the way for a more thorough investigation into FTX’s collapse and could lead to greater accountability for cryptocurrency exchanges and other players in the industry.