Will there be independent expert in FTX bankruptcy case
2023.01.10 14:34
Will there be independent expert in FTX bankruptcy case
By Kristina Sobol
Budrigannews.com – One of the law firms involved in the bankruptcy of crypto exchange FTX has been criticized for having conflicts of interest by a group of four senators from the United States.
Senators John Hickenlooper, Thom Tillis, Elizabeth Warren, and Cynthia Lummis — a bipartisan group — wrote a letter on January 9 to Judge John Dorsey of the U.S. Bankruptcy Court for the District of Delaware and asked the judge to approve a motion to appoint an independent examiner into FTX’s activities prior to its collapse in November. According to U.S. lawmakers, the law firm currently conducting the investigation, Sullivan & Cromwell, had previously provided legal services to FTX and “one of its partners even served as FTX’s general counsel,” posing a potential conflict of interest during the bankruptcy proceedings of the company.
“FTX and other firms that have mismanaged digital assets have caused a significant amount of damage: The letter stated that they had destroyed the life savings of tens of thousands of customers worldwide and in the United States. In this case, we believe it is essential to appoint a strong, impartial, and uninterested examiner to conduct a thorough investigation of FTX, FTX US, and its related entities in order to obtain the information required to ensure that FTX’s customers and the general public are served justice and to inform Congress’ consideration of future digital asset legislation.
Added the senators:
“Gven their longstanding legal work for FTX, [Sullivan & Cromwell] may well bear a measure of responsibility for the damage wrecked on the company’s victims. Put bluntly, the firm is simply not in a position to uncover the information needed to ensure confidence in any investigation or findings.”
Get this: FTX’s legal advisors *pre-collapse* want to be appointed to oversee investigations INTO the collapse.
I’m no legal expert, but that sounds like a conflict of interest. With @SenThomTillis @SenWarren @SenLummishttps://t.co/iz3k9yP1uT
— Senator John Hickenlooper (@SenatorHick) January 10, 2023
On November 11, FTX Group filed for Chapter 11 bankruptcy, and in December, former CEO Sam Bankman-Fried faced eight criminal charges in federal court. In FTX’s bankruptcy case, the next public hearing is set for January 11, while Bankman-Fried’s trial is expected to begin in October.
The Justice Department announced on January 9 that it had seized more than 55 million shares of Robinhood and more than $20 million in U.S. currency as part of the case against Bankman-Fried. These assets had previously been controlled by FTX and its executives. Yonathan Ben Shimon, a creditor of FTX and BlockFi, had made distinct claims on the assets.
More U. S. bank refuses to work with cryptocurrencies
