FTX judge weighs demand for independent bankruptcy investigation

02/06 11:36

According to Reuters, a U.S. bankruptcy judge at a court hearing in Delaware will consider on Monday whether to greenlight a court-supervised investigation into the collapse of FTX, a course of action that the crypto exchange has opposed as redundant and wasteful. The U.S. Department of Justice's bankruptcy watchdog has urged U.S. Bankruptcy Judge John Dorsey, who is overseeing FTX's Chapter 11, to appoint an independent examiner to investigate allegations of "fraud, dishonesty, incompetence, misconduct, and mismanagement" that are "too important to be left to an internal investigation." FTX says an examiner would merely duplicate work already being done by FTX, its creditors, and law enforcement agencies. FTX has acknowledged that its past conduct raised questions about fraud and mismanagement, but has said another layer of review would only add cost and delay to the company's effort to repay customers in bankruptcy. FTX's official creditors committee has sided with FTX, saying the proposed investigation is redundant. State securities regulators in Texas, Vermont and Wisconsin supported the Justice Department's bid, saying a neutral report would benefit creditors and customers.
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