The US Department of Justice rejected FTX’s decision to hire Sullivan & Cromwell, the legal firm presently investigating the exchange, alleging possible conflicts of interest.
Recently, the US Trustee said in a court filing that it disagrees with the FTX ruling for two “overarching” grounds. The Department of Justice (DOJ) originally said that it was unable to “assess whether S&C fulfils the Bankruptcy Code’s conflict-free and dispassion criteria” based on the law firm’s disclosures alone.
Furthermore, there may be a conflict of interest since FTX US general counsel Ryne Miller spent eight years working for S&C. To quote the DOJ: “The legal firm will be in the conflicting situation of prosecuting itself and its former partner.”
The DOJ’s lawsuit is similar to one filed by four senators from both parties—John Hickenlooper, Thom Tillis, Elizabeth Warren, and Cynthia Lummis —just days earlier.
“We think it is vital that a strong, impartial, and disinterested examiner be appointed in this case to undertake a searching examination into FTX, FTX US and its affiliated organisations in order to find the facts required to guarantee FTX’s consumers – and the larger public – that justice is served and to assist Congress’ consideration of future digital asset legislation.”
As a group of cryptocurrency businesses, FTX and its affiliates filed for Chapter 11 bankruptcy protection at the start of November. US authorities ultimately filed criminal charges against Sam Bankman-Fried, the discredited founder of FTX, and he was subsequently detained in The Bahamas. After being extradited to the United States, he was able to secure his release from prison by paying a $250 million bail in a New York court.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.