Fight for Independent Examiner in FTX Bankruptcy Moves to Appeals Court

By Mat Di Salvo

The case of collapsed crypto exchange FTX may soon involve an independent examiner after a district court judge today escalated the request for one to the U.S. Third Circuit Court of Appeals. 

Legal filings show that Delaware District Judge Colm F. Connolly approved passing the case further up the judicial chain on Tuesday. 

The move comes after the judge overseeing the entire bankruptcy case, John Dorsey, said that appointing an independent examiner would be too costly.

Even so, a bipartisan group of senators has called for an independent examiner because they say the team put in place may not provide an unbiased account of what happened.

Juliet Sarkessian, a representative for the U.S. Trustee, a branch of the Department of Justice, has since pushed for an independent examiner. 

Following the collapse of the crypto behemoth company FTX in November last year, prosecutors hit ex-boss Sam Bankman-Fried with 13 criminal charges, including committing wire fraud on customers and conspiring to make unlawful political contributions He is also accused of commingling client funds with those of sister trading company Alameda Research.

Bankman-Fried—also known as SBF—was arrested in December and initially charged by the Complex Frauds and Cybercrime Unit in the Southern District of New York with eight financial crimes. He denied them in January but was hit with further charges in February. 

Today, prosecutors said in court documents that some of the charges could be dropped. 

FTX was a huge crypto brand run from the Bahamas that allowed customers to buy, sell and bet on the future price of cryptocurrencies. But its higher-ups allegedly mismanaged the company.

FTX’s quick and unexpected collapse has since prompted lawmakers to propose stricter regulations for the fast-moving and convoluted crypto space, leading politicians to lock horns over how strictly the industry should be interfered with.

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