The Court of Appeal ordered the appointment of an independent investigator of FTX
Months after the initial application, the United States Court of Appeals for the Third Circuit ordered the judge overseeing the bankruptcy of cryptocurrency exchange FTX to appoint an independent investigator.
In a Jan. 19 opinion, a three-judge panel of the Third Circuit overturned a ruling by U.S. Bankruptcy Court Judge John Dorsey for the District Court of Delaware that the court would have appointed an investigator to oversee the FTX case. In the year In February 2023, Judge Dorsey denied US Trustee Andrew Vara's request to appoint an examiner in the FTX bankruptcy case, leading to an appeal.
According to the judges, allowing an independent examiner to handle FTX's bankruptcy case would provide investors with more clarity on the “volatile and dynamic cryptocurrency industry.” The Third Circuit said independent scrutiny would allow the bankruptcy court to “consider the greater public interest” in decisions related to the FTX reorganization plan.
“FTX Group may face an investigation into the use of its own cryptocurrency tokens, FTTs, to inflate the value of FTX and Alameda Research. [the crypto industry] Under further investigation, thereby warning potential investors of unknown credit risks in other cryptocurrency companies,” said the January 19 decision.
FTX filed for Chapter 11 protection in November 2022 after the resignation of Sam Bankman-Fried in November 2022 and the appointment of John Ray as CEO to oversee the bankruptcy. In November 2023, Bankman-Fried was found guilty of seven felony charges. He is expected to be sentenced in March.
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On December 16, creditors representing defunct crypto exchange FTX filed an amended reorganization plan in bankruptcy court, proposing to compensate investors for lost assets beginning November 11, 2022. The debtors later issued an appraisal of all assets, including $16,871. For Bitcoin (BTC) – approximately 58% lower than the price of $40,349 at the time of publication.
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