The controversy surrounding FTX, a cryptocurrency firm marred by fraud allegations, escalates as a court-approved examiner recommends a new investigation into its sale of derivatives exchange LedgerX. The report, made public this past Thursday, implies grave concerns about the transactions involved in the sale.
The sale, which saw LedgerX exchange hands for a meager $50 million, raised eyebrows for its low value compared to what FTX had originally paid to acquire the exchange. The involvement of FTX’s bankruptcy lawyers in the probe has also been met with disapproval as their previous participation in the $300 million deal that integrated LedgerX into FTX is seen as a potential conflict of interest.
Respected former federal prosecutor, Robert J. Cleary spearheaded the examination and strongly suggested that Sullivan & Cromwell, FTX’s primary law firm, abstain from any investigation concerning the deal due to their prior role in the transaction. This stance is a clear signal of the seriousness and impartiality desired in this upcoming probe.
Cleary’s examination was a federal judge’s request to clarify several doubtful aspects of FTX’s multi-billion-dollar bankruptcy case. The LedgerX sale has now emerged as an additional hiccup that demands further auditing.
The details of this report and more about the FTX case can be found here.