FTX Collapse New Probe Bankruptcy US Justice Department Sam Bankman-Fried

Embattled crypto exchange FTX has expressed strong opposition to a new and independent investigation request into its unprecedented collapse in November last year, by the US Department of Justice on January 26. The firm has clarified that the justice department is already carrying out a full-fledged investigation into the matter. It noted that the ongoing probe also includes family members of FTX founder, Sam Bankman-Fried. In a court filing in Wilmington, Delaware, US, the exchange said the next requested investigations will lead to a delay in the bankruptcy case and extra monetary costs.

According to a report by Reuters, the firm has confessed to indulging in “fraud, dishonesty, incompetence, misconduct, mismanagement, and irregularity” in the past. However, it said that the agency is already facing probes for all such malpractices. The firm added that its new management, creditors, and law enforcement agencies are conducting extensive probes into different departments of the firm.

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A US bankruptcy judge, John Dorsey, is overseeing the firm’s Chapter 11 proceedings. FTX has asked the judge to assist the firm in getting documents related to misappropriated and stolen funds while engaging in transactions at the firm, from Bankman-Fried’s family members. It said that the illegal transactions include about $16.7 million in Bahamian real estate purchases under Bankman-Fried’s parents’ names.

Not just that, FTX is also asking for information regarding all the political donations of Bankman-Fried. The organisations associated with him include Mind the Gap and Guarding Against Pandemic among others. However, Mind the Gap has claimed it did not get any contributions from Bankman-Fried.

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FTX  filed for bankruptcy in November last year. It left about 9 million customers and investors in the company facing unimaginable losses of billions of dollars. At present, the US Department of Justice has asked for fresh investigations into its collapse after being supported by a team of US senators who claimed to be bipartisan.

John Ray, FTX’s new CEO, is yet to testify that earlier cases have cost the firm about $150 million and provided very little benefit to the creditors.

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The company has also filed a fresh list of creditors with the bankruptcy court. It includes financial watchdogs as well as government agencies in the US, Japan, and Switzerland, reported Reuters. The new list also includes the US Treasury’s Financial Crimes Enforcement Network (FinCEN) and the US Internal Revenue Service (IRS).

Amid all of these, Bankman-Fried will face a trial in October this year for his alleged involvement in the collapse of the firm.

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