Four US lawmakers ask court to appoint independent examiner for FTX Four US lawmakers ask court to appoint independent examiner for FTX
The lawmakers argued that Sullivan & Cromwell previously advised FTX on various legal matters and is in no position to investigate the bankrupt firm.
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Updated: Jan. 11, 2023 at 4:32 pm UTC
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Four US Senators urged the court to appoint an independent examiner to look into the activities of bankrupt crypto exchange FTX in a Jan. 9 bipartisan letter.
The lawmakers argued that the firm presently tasked with the work, Sullivan & Cromwell, previously advised FTX on various legal matters, including “acquisition transactions and specific regulatory inquiries related to certain U.S. business lines.” They added that the law firm also admitted that it had charged FTX over $8.5 million in legal fees before its bankruptcy.
“As legal counsel is often central to major financial scandals, given their role in drafting financial agreements, risk management compliance practices, and corporate controls, it is perfectly reasonable to have concerns about the impartiality and manner that Sullivan & Cromwell will approach any investigation of FTX with.”
According to the lawmakers, Sullivan & Cromwell is not a disinterested party in the case because it “advised FTX for years leading up to its collapse, and one of its partners even served as FTX’s general counsel.” Besides this, they pointed out that the extent of the law firm’s involvement in FTX’s operations remains unanswered.
“Put bluntly, the firm is simply not in a position to uncover the information needed to ensure confidence in any investigation or findings.”
The Senators appealed to Judge John Dorsey to support the U.S. Trustee’s Motion to appoint an independent examiner who would have “full authority and resources to conduct a thorough, objective investigation of the activities that led to the collapse of FTX.”
The letter was signed by senators John Hickenlooper, Thom Tillis, Elizabeth Warren, and Cynthia Lummis.
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In this article
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Cynthia Lummis, known for her pro-crypto views, is a United States Senator from the great State of Wyoming.
Elizabeth Warren is an American politician and former academic known for being fiercely anti-Bitcoin and anti-crypto.
