US Trustee Steps In To Block FTX’s Asset Disposal

A US trustee has filed a legal objection to halt FTX’s plans to sell off some of its installations and critical assets, including clearing house LedgerX and its subsidiaries in Japan and Europe.

FTX is currently facing lawsuits after filing for Chapter 11 bankruptcy protection in November. In order to raise funds, FTX has announced plans to sell off some of its holdings and subsidiaries, including FTX registered in Europe and FTX Japan.

Andrew Vara, a US Trustee, has intervened and is calling on the court to approve an independent investigation before the defunct exchange can liquidate any of its units. Andrew’s argument is based on the idea that some of FTX’s units may have information related to the loss of funds due to Sam Bankman-Fried’s improper use of customer deposits.

His investigation protocol requires a thorough examination of all officials and employees who the trustee thinks may have been involved in Sam Bankman-Fried’s embezzlement of customer funds. In his evaluation, law enforcement will be able to effectively investigate FTX’s collapse if these assets remain under the company’s ownership.

The sale of potentially valuable causes of action against the Debtors’ directors, officers, and employees, or any other person or entity, should not be permitted until there has been a full and independent investigation into all persons and entities that may have been involved in any malfeasance, negligence or other actionable conduct,

Andrew added in the court filing.

Previously, FTX stated that the companies it planned to sell were independent and not financially connected to the larger FTX group. The exchange claimed that each company had separate customer accounts and distinct management teams.

SBF Pleads Not Guilty To Fraud Charges

Sam Bankman-Fried (SBF) pleaded not guilty to fraud charges after being extradited to the US for allegedly misusing customer deposits to fund his political ideologies and purchase lavish real estate in the Bahamas.

Related Reading | MakerDAO Proposes Changes To DeFi Protocol In Response To Lending Events

SBF’s request for leniency is ironic because his accomplices, Caroline Elisson and Garry Wang, have already admitted to their involvement in the crime and have offered to assist U.S. investigators in completing their investigation.

Comments (No)

Leave a Reply