FTX's lawyers on Monday strongly urged a U.S. bankruptcy judge in Delaware not to greenlight a court-supervised investigation into its collapse, saying it would waste time and money and could pose a security risk, Reuters reported. FTX attorney James Bromley at Monday's hearing told Bankruptcy Judge John Dorsey, who is overseeing the crypto exchange's chapter 11 case, that the proposed review the U.S. Department of Justice's bankruptcy watchdog is seeking is so vague that it is essentially asking for an examiner to look at "everything, everywhere, all at once." The U.S. Trustee has asked Dorsey, to appoint an independent examiner to investigate allegations of fraud, misconduct, and mismanagement that are "too important to be left to an internal investigation." Juliet Sarkessian, an attorney for the U.S. Trustee, argued such an investigation is mandatory under federal law in large bankruptcy cases where DOJ or a creditor requests one. Judge Dorsey, who said he believed an examiner was not required, but should be appointed if "appropriate," did not rule on Monday. He asked FTX, its creditors and the U.S. Trustee to try to reach an agreement on the scope of a potential examiner review. FTX said that an examiner would merely duplicate work already being done by FTX, its creditors, and law enforcement agencies, adding cost and delay to its effort to repay customers in bankruptcy.
