The contagion of the FTX collapse is still ongoing despite its already significant impact on the industry. In today’s news, a U.S. bankruptcy judge is looking to consider the approval of an independent bankruptcy investigation into the FTX collapse. This was revealed in a court hearing in Delaware which took place earlier today.
FTX is still one of the most investigated firms from one of many of last year’s bankruptcy filings. While the exchange initially portrayed itself as a trustworthy platform, it eventually collapsed when news broke that its chief executive and founder Sam-Bankman Fried aka SBF was reportedly using customer funds inappropriately.
FTX Opposses To The Independent Bankruptcy Investigation
As a response to the appointment of an independent examiner into its case, FTX condemned the idea saying approval of an investigator would only replicate work already being done by FTX, its creditors, and law enforcement agencies, according to Reuters.
Though the bankrupt company admitted its actions in the past calls for a probe relating to mismanagement and fraud, it is convinced that another round of investigation from an examiner will result in more cost and delay to the company’s aim to refund victims of the collapse.
While the judge is still pondering on the idea, FTX’s official creditors’ committee supported the exchange noting that the considering investigation is unnecessary and that it is not needed. On the other hand, State securities regulators in Texas, Vermont, and Wisconsin backed the proposal and said an unprejudiced version of the report would be advantageous to both the creditors and customers.
FTX Gets Provoked, Wants A Refund
As cases of the FTX collapse continue to heat up, the bankrupt firm is beginning apparently annoyed as to why everyone including the people it once gave money to is now turning a blind eye to its current situation.
On Monday, it was reported that FTX requested a refund from former donor recipients. A press release published on Sunday noted, “FTX Debtors are sending confidential messages to political figures, political action funds, and other recipients of contributions that were made by or at the direction of the FTX Debtors, Samuel Bankman-Fried or other officers or principals of the FTX Debtors,” the press release read in part.
As reported by Bitcoinist citing an announcement, the recipients have until the end of this month to do (a refund) as requested or else the debtors “retain the right” to execute legal actions to compel payback, plus interest.
Notably, the news follows FTX’s initial issuance for a refund in December. Previously, the creditors calculated that SBF donated $93 million to political causes. Speaking of FTX, the exchange native token (FTT) which was once a rival to other exchange’s native tokens, has so far plummeted by over 90% since the collapse.
At the time of writing, the token is currently in a downtrend trading below $2 after falling from its ranging $25 price tag late last year. Meanwhile, as regulatory scrutiny intensifies following the FTX collapse, industries like Delaware sports betting continue to show how clear oversight can support market stability and protect participants.
