Home CryptocurrencyBitcoin Appeals court orders appointment of independent FTX examiner

Appeals court orders appointment of independent FTX examiner

by SuperiorInvest

Months after the first filing, the U.S. Court of Appeals for the Third Circuit ordered the judge overseeing the bankruptcy of cryptocurrency exchange FTX to appoint an independent examiner.

In a Jan. 19 opinion, three Third Circuit judges reversed a ruling by Judge John Dorsey of the U.S. Bankruptcy Court for the District of Delaware, which required the court to appoint an examiner to oversee the FTX case. In February 2023, Judge Dorsey denied a motion by U.S. Trustee in the FTX bankruptcy case, Andrew Vara, to appoint an examiner, triggering the appeal process.

According to the judges, allowing an independent examiner to oversee FTX’s bankruptcy case would provide greater transparency to potential investors “for the changing and volatile cryptocurrency industry.” The Third Circuit said an independent investigation would allow the bankruptcy court to “consider the greater public interest” in rulings related to FTX’s reorganization plan.

“An investigation into FTX Group’s use of its own cryptocurrency tokens, FTT, to inflate the value of FTX and Alameda Research could bring [the crypto industry] under increased scrutiny, thereby alerting potential investors to undisclosed credit risks at other cryptocurrency companies,” the Jan. 19 decision said.

Precedent opinion of the Third Circuit on January 19. Source: PACER

FTX filed for Chapter 11 protection in November 2022, shortly after the resignation of Sam Bankman-Fried and the appointment of John Ray as CEO to oversee the bankruptcy. In November 2023, Bankman-Fried was found guilty of seven felonies. He is expected to be sentenced in March.

Related: FTX debtors propose separate deal with Sam Bankman-Fried over Embed acquisition

On December 16, debtors representing the defunct cryptocurrency exchange FTX filed an amended reorganization plan in bankruptcy court, proposing to compensate investors for lost assets based on their value as of November 11, 2022. Subsequently, Debtors posted estimates of all asset prices, including $16,871. for Bitcoin (BTC): about 58% less than the price of $40,349 at the time of publication.

Magazine: Can you trust crypto exchanges after the FTX crash?

Source Link

Related Posts