Four US senators are urging a federal bankruptcy judge to rule in favor of having an independent examiner investigate FTX and its related companies.
US Senators John Hickenlooper, Thom Tillis, Elizabeth Warren and Cynthia Lummis sent a letter to Judge John Dorsey of the U.S. Bankruptcy Court for the District of Delaware in support of a motion to appoint an independent examiner as part of FTX’s bankruptcy proceedings.
Per the letter, the senators are concerned over law firm Sullivan & Cromwell representing FTX during the proceedings and working with the company’s new executive team to uncover suspected wrongdoing.
“We believe it is critical that a strong, objective, and disinterested examiner is appointed in this case to conduct a searching investigation of FTX, FTX US and its related entities in order to uncover the facts needed to assure FTX’s customers – and the broader public – that justice is served and to inform Congress’ consideration of future digital asset legislation.”
The senators allege that the law firm is not a “disinterested” party since it had “advised FTX for years leading up to its collapse and one of its partners even served as FTX’s general counsel.”
“Additionally, somewhat shockingly, Sullivan & Cromwell claims it is ‘disinterested’ within the meaning of the U.S. Bankruptcy Code. Yet significant questions about the firm’s involvement in the operations of FTX remain unanswered, including the extent to which Sullivan & Cromwell attorneys had questions or suspected fraud or the absence of appropriate legal controls, the actual scope of Sullivan & Cromwell’s representation of FTX and if not Sullivan & Cromwell, which law firm actually served as ‘primary external counsel’ to the Debtors…
Put bluntly, the firm is simply not in a position to uncover the information needed to ensure confidence in any investigation or findings.”
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