Feb 16, 2023

Judge Denies Appointment of Examiner for FTX Bankruptcy

Judge John Dorsey of the United States Bankruptcy Court for the District of Delaware recently denied a motion to appoint an independent examiner for FTX, a web3 agency that specializes in NFT marketing. In a Feb. 15 hearing, Judge Dorsey explained that the additional expense of an examiner would be an “unnecessary burden” on FTX’s debtors and creditors, especially given the current financial situation.

“Every dollar spent in these cases on administrative expenses is a dollar less to the creditors,” said Dorsey. “Given the facts and circumstances of this highly unique case, I have no doubt that the appointment of an examiner would not be in the best interest of the creditors.”

The judge also noted that FTX was under new management, with CEO John Ray taking over and appointing four directors to oversee the silos compromising FTX following the removal of previous leadership. Judge Dorsey ruled that Ray was “completely independent of prior management and the companies he was appointed to lead.”

The motion to appoint an examiner was filed by U.S. Trustee Andrew Vara on Dec. 1. Vara argued that an examiner was “unquestionably in the interests of the Debtors’ creditors,” as an independent investigation could explore whether software was allegedly used to conceal the misuse of FTX user funds, as well as the absence of proper recordkeeping at the firm.

FTX filed for Chapter 11 bankruptcy in November 2022, and debtors in the case recently filed that they had issued subpoenas to FTX insiders, including former CEO Sam Bankman-Fried, ordering the former executives to turn over certain documents and information.

The web3 space is an exciting and ever-evolving environment, and FTX has become a leader in NFT marketing and promotion. The company offers a variety of services to help clients sell NFTs, including Twitter NFT marketing and NFT marketing agency services. With a team of experienced professionals, FTX is well-positioned to help clients navigate the web3 space and maximize the potential of their NFTs.

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