- FTX’s bankruptcy is the fastest big corporate failure in American history
- The United States Trustee has called for an impartial investigation into FTX demise
- An independent investigation into FTX was called for by US trustees
The United States Trustee overseeing FTX’s bankruptcy proceedings has dubbed the exchange the “fastest big corporate failure in American history,” and has called for an impartial investigation into its demise.
The American Trustee Andrew Vara noted in his motion on Dec. 1 that over eight days in November, debtors “suffered a virtually unprecedented decline in value” from a market high of $32 billion earlier in the year to a severe liquidity crisis after a “proverbial ‘run on the bank.’”
Vara has called for an independent investigation of FTX, stating it was “especially important because of the wider implications that FTX’s collapse may have for the crypto industry.”
In bankruptcy cases where unsecured debt exceeds $5 million, independent examiners are usually brought in to represent creditors’ interests.
The appointment of an independent examiner would be in the interests of the Debtors’ creditors and other parties in interest in the Debtors’ estates, consistent with Code section 1104(c)(1).
In addition to the statement, “an examiner could—and should—investigate the substantial and serious allegations of fraud, dishonesty, incompetence, misconduct, and mismanagement by the Debtors, the circumstances surrounding the Debtors’ collapse, the apparent conversion of exchange customers’ property, and whether colorable claims and causes of action exist to remedy losses.”
In regards to FTX’s collapse, Vara says the issues at stake are simply too important and large to be investigated internally.
In other news, DeFi protocol, Ankr, confirmed a multi-million dollar attack that occurred on December 1st. Ankr protocol dubbs itself the first “node-as-a-service” platform. Allegedly, the exploit was a result of a fault in its code that permitted limitless token minting.
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