Justice Department seeks independent investigation of FTX meltdown

US Justice Department is demanding its independent investigation The collapse of cryptocurrency exchange FTXAnd has asked a bankruptcy judge for the green light.

FTX Trading, once the world’s second largest crypto exchange, declared bankrupt last month amid an $8 billion shortfall. In court documents filed Thursday, DOJ officials urged a bankruptcy judge to approve the appointment of an independent review, citing the need for a “truly neutral” investigation of the collapse.

The crypto exchange’s new CEO, John Ray III, is conducting an internal investigation into FTX’s meltdown, but the DOJ argued that a separate, independent examination is still needed. The DOJ’s Office of the US Trustee said in the papers that although it does not question Ray’s “qualification, ability or good faith”, his role is as a fiduciary to the firm’s debtors and therefore the internal examination is of interest to all stakeholders. cannot represent.

“But the questions here are too big and too important to be left to an internal investigation,” US Trustee Andrew Vara wrote in the court document.

“An examiner can and should investigate substantial and serious allegations of fraud, dishonesty, inefficiency, misconduct and mismanagement,” he added.

FTX did not immediately respond to a request for comment.

Ray, a bankruptcy expert who oversaw the liquidation of Enron last month Told They had never seen serious problems like FTX.

“Never in my career have I seen such a complete failure of corporate controls and a complete absence of reliable financial information,” Ray said in November court documents.

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