Court Considers Independent FTX Probe

A US bankruptcy judge is on Monday considering whether to appoint an independent investigation into collapsed cryptocurrency exchange FTX, a move opposed by the company itself as well as the firm’s official creditors’ committee.

Meanwhile the company has stepped up its campaign to recover tens of millions of dollars of political donations made by founder and former chief executive Sam Bankman-Fried as it seeks to reimburse creditors.

The US Department of Justice’s bankruptcy regulator, the US Trustee Programme, has asked US Bankruptcy Judge John Dorsey, who is overseeing the FTX bankruptcy proceedings, to appoint an independent examiner.

The DOJ said the step is necessary to investigate allegations of “fraud, dishonesty, incompetence, misconduct, and mismanagement” that are “too important to be left to an internal investigation”.

Political donations

The agency said such a probe is mandatory under federal law in cases where the DOJ requests one.

FTX has said such an examination would duplicate work already being carried out by the company itself, creditors and law enforcement agencies.

FTX attorney James Bromley said allowing another set of investigators to access its systems could create security risks for FTX’s own ongoing probe.

Meanwhile, on Sunday FTX said it was sending confidential letters to recipients of donations by Bankman-Fried and other FTX-linked figures, including political figures and action groups demanding the return of the funds.

Fraud charges

The letters follow an initial public announcement on 19 December that the company was looking to recoup those funds and was prepared to take legal action in bankruptcy court against those who failed to return the monies voluntarily.

FTX has now set a deadline of the end of the month for the funds to be sent back.

Bankman-Fried and other FTX executives have been accused of fraud, with Bankman-Fried pleading not guilty to the charges.

But several other former top executives, including Caroline Ellison, former chief executive of Bankman-Fried’s hedge fund Alameda Research, have pleaded guilty to fraud.

Matthew Broersma

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

Recent Posts

Wisk Plans Autonomous Air Taxi Flights By Decade’s End

Boeing-owned start-up Wisk plans autonomous eVTOL flights by end of decade as companies crowd into…

10 hours ago

US Cracks Down On Tech Shipments To Russia

Shipments of high-end chips and other electronics to Russia via China and Hong Kong said…

10 hours ago

Double-Digit Growth For Google Expected Amidst AI Push

Google expected to see double-digit revenue and profit growth for second quarter amidst AI cloud…

11 hours ago

Xiaomi Entered EV Market ‘Due To US Sanctions’

Xiaomi chief executive says he decided to begin making electric vehicles after company was placed…

11 hours ago

Nvidia Said To Develop ‘Blackwell’ AI Chip For China

Nvidia said to be developing version of next-gen 'Blackwell' AI chip for China market as…

12 hours ago

NHS Delays Continue After Windows Outage

Patients told to expect delays into this week as disruption to EMIS booking system leads…

1 day ago