FTX Examiner Seeks to Probe Crypto Exchange’s Collapse
Robert Cleary, the examiner assigned to investigate FTX’s bankruptcy, has filed a motion to delve deeper into Sullivan & Cromwell’s involvement with Sam Bankman-Fried and to examine the discrepancies in FTX.US’s balance sheet.
Sullivan & Cromwell, a legal firm, has faced scrutiny for its role in handling transactions for FTX before its downfall. Cleary previously found no evidence of Sullivan & Cromwell’s knowledge of FTX’s fraudulent activities or its misleading actions towards regulators. He also determined that they did not deceive Sam Bankman-Fried or breach any ethical standards.
The focus is back on Sullivan & Cromwell’s ties to Sam Bankman-Fried as Cleary aims to uncover if the firm was aware of any misconduct at FTX, including allegations that they advised Bankman-Fried on purchasing a large number of Robinhood shares. The investigation seeks to reveal any conflicts of interest that may have influenced the Court’s decision to retain Sullivan & Cromwell for the case.
Furthermore, Cleary’s motion aims to uncover the details surrounding FTX’s fraudulent activities and the “holes” in its balance sheet. By investigating these discrepancies, there is a possibility of identifying further misconduct or misuse of customer assets.
This filing is the latest development in Sullivan & Cromwell’s legal entanglement with Sam Bankman-Fried. Critics have raised concerns about the firm’s involvement in advising both sides of the crypto fraud scheme, potentially leading to conflicts of interest.
If approved, Cleary’s investigation is expected to last 10 weeks and cost $3 million. Sam Bankman-Fried is currently serving a 25-year sentence for his role in the digital asset scheme, while Gary Wang is awaiting sentencing.