FTX Bankruptcy Examiner Denial Appealed by U.S. Government

An independent investigation could cost as much as $100 million, the federal court in Delaware has previously been warned.

AccessTimeIconMar 6, 2023 at 5:21 p.m. UTC
Updated Mar 6, 2023 at 5:30 p.m. UTC

The U.S. government on Monday appealed a judicial decision not to appoint an independent examiner to look into the collapse of bankrupt crypto exchange FTX.

The U.S. Trustee, a branch of the Department of Justice (DOJ), had previously argued that bankruptcy law requires an independent probe for any case of such magnitude, despite warnings that it could cost as much as $100 million. In its arguments, the Trustee said an independent examiner could look into whether those responsible for mismanagement at FTX are still part of the company.

A bipartisan group of U.S. senators had also called for an independent probe.

On Feb. 15, however, the Delaware-based U.S. bankruptcy court's Judge John Dorsey – who is overseeing the winding down of FTX – agreed with the company’s new management that an independent examination would represent costly delay to any resolution of the case.

An examiner appointed in the parallel case of crypto lender Celsius Network issued a 500-page report in January, four months after being appointed by a New York court.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Jack Schickler

Jack Schickler was a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.