Business and Economy Government

DOJ Watchdog Urges Independent Probe Into FTX Collapse

The Grind:

A Department of Justice (DOJ) watchdog is seeking an independent examination into the collapse of cryptoexchange FTX, according to a recent court filing.

The Justice Department is already investigating the exchange. The DOJ’s U.S. Trustee for Regions Three and Nine now wants an independent examiner to be appointed by a bankruptcy court to look into any wrongdoings that may have led to the collapse.

The Details:

“An examiner could—and should—investigate the substantial and serious allegations of fraud, dishonesty, incompetence, misconduct, and mismanagement by the Debtors, the circumstances surrounding the Debtors’ collapse, the apparent conversion of exchange customers’ property, and whether colorable claims and causes of action exist to remedy losses,” the filing stated.

FTX filed for bankruptcy in November after the company’s balance sheet triggered concerns, leading to mass withdrawal of funds that pushed it into a liquidity crisis. The company has admitted that over a million creditors might be affected by the bankruptcy.

One of the reasons that the DOJ watchdog is calling for a public examination is that the findings and conclusions of such an examination will be “public and transparent.” Read more…

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