Friday, February 3, 2023
 

US Justice Department Bankruptcy Watchdog Follows Up On FTX 

  • The US Department of Justice is seeking an independent investigation of the bankrupt FTX.
  • FTX’s new CEO John Ray says he wishes to recover customer assets as a priority.
  • DOJ shared it can provide more public conclusions with an independent review.

US bankruptcy watchdog, the Department of Justice has called for an independent investigation of the collapsed cryptocurrency exchange FTX, on the grounds of delivering customers a neutral party review of the “fraud, dishonesty, incompetence, misconduct, and mismanagement” allegations on December 1.

FTX founder Sam Bankman-Fried hired new CEO John Ray who promised to focus on driving the company out of bankruptcy while investigating the exchange to recover user assets.

Meanwhile, the US Trustee’s Department of Justice office during a Delaware bankruptcy court filing confirmed that the independent investigation is not a blow to Ray’s competency, instead is being conducted with the intention to enable more energy for him to steady FTX’s ongoing chaos.

U.S. Trustee Andrew Vara stated in court documents, 

The questions at stake here are simply too large and too important to be left to an internal investigation

Vara further added that a neutral examiner would allow additional public and transparent findings in comparison to private analysis which is significant currently due to the “wider implications that FTX’s collapse may have for the crypto industry.”

Moreover, the freshly appointed CEO expressed that in his 40 years of experience in bankruptcy, he has never come across greater defaults in oversight, security, and corporate governance than he has identified in FTX’s data

After the failure of a possible partnership with Changpeng Zhao’s crypto exchange Binance, FTX’s Sam Bankamn-Fried has faced several allegations including accusations of transferring customer deposits to sister trading firm, Alameda Research when FTX noted a $6 billion withdrawal in just 3 days.

  • The US Department of Justice is seeking an independent investigation of the bankrupt FTX.
  • FTX’s new CEO John Ray says he wishes to recover customer assets as a priority.
  • DOJ shared it can provide more public conclusions with an independent review.

US bankruptcy watchdog, the Department of Justice has called for an independent investigation of the collapsed cryptocurrency exchange FTX, on the grounds of delivering customers a neutral party review of the “fraud, dishonesty, incompetence, misconduct, and mismanagement” allegations on December 1.

FTX founder Sam Bankman-Fried hired new CEO John Ray who promised to focus on driving the company out of bankruptcy while investigating the exchange to recover user assets.

Meanwhile, the US Trustee’s Department of Justice office during a Delaware bankruptcy court filing confirmed that the independent investigation is not a blow to Ray’s competency, instead is being conducted with the intention to enable more energy for him to steady FTX’s ongoing chaos.

U.S. Trustee Andrew Vara stated in court documents, 

The questions at stake here are simply too large and too important to be left to an internal investigation

Vara further added that a neutral examiner would allow additional public and transparent findings in comparison to private analysis which is significant currently due to the “wider implications that FTX’s collapse may have for the crypto industry.”

Moreover, the freshly appointed CEO expressed that in his 40 years of experience in bankruptcy, he has never come across greater defaults in oversight, security, and corporate governance than he has identified in FTX’s data

After the failure of a possible partnership with Changpeng Zhao’s crypto exchange Binance, FTX’s Sam Bankamn-Fried has faced several allegations including accusations of transferring customer deposits to sister trading firm, Alameda Research when FTX noted a $6 billion withdrawal in just 3 days.

 

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