Another day, another update in FTX’s saga.
The US Office of Trustee within the Department of Justice, the component of the Department of Justice responsible for overseeing the administration of bankruptcy proceedings, has filed a motion requesting to appoint an independent examiner to investigate FTX’s collapse.
According to the motion filed for The United States Bankruptcy Court for the District of Delaware, the independent examiner would be neutrally analyzing the allegations of “fraud, dishonesty, incompetence, misconduct, and mismanagement.”
The questions at stake here are simply too large and too important to be left to an internal investigation.
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The DOJ highlighted that it is likely that the examiner would provide more credible and broadly accepted information. In the motion, DOJ added:
Like the bankruptcy cases of Lehman, Washington Mutual Bank, and New Century Financial before them, these cases are exactly the kind of cases that require the appointment of an independent fiduciary to investigate and to report on the Debtors’ extraordinary collapse.
The Department of Justice’s call for an independent examiner comes after, on November 11th, crypto exchange FTX and around 130 companies in FTX Group filed for bankruptcy. Along with the bankruptcy news, FTX revealed that its co-founder and CEO Sam Bankman-Fried is resigning as chief executive officer. John J. Ray III took his place as FTX’s CEO.
Following the bankruptcy announcement, the US Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the United States Department of Justice (DOJ) and Bahamas law enforcement launched various investigations into troubled crypto exchange FTX.
The United States Bankruptcy Court for the District of Delaware is set to host a hearing on FTX’s case on December 16th, with the proceedings streamed online.