A Delaware bankruptcy judge on Wednesday denied a request by the U.S. Justice Department for an additional independent investigation into FTX’s collapse, saying it would needlessly suck up funds that could go to customers, WSJ Pro Bankruptcy reported. Bankruptcy Judge John Dorsey said existing probes by the cryptocurrency exchange’s new management and government authorities were sufficient. The judge praised the qualifications of FTX’s new chief executive, John J. Ray III, who was brought on to succeed FTX founder Sam Bankman-Fried as CEO just before the company filed for chapter 11 in November. “There is no question that Mr. Ray is completely independent of prior management,” Judge Dorsey said. Ray and his team are investigating FTX’s collapse, while federal and state agencies are doing their own probes, making additional review unnecessary, the judge said. Judge Dorsey said that a new investigation by an outside examiner would need to bring in a team of experts, a move that could lead to more than $100 million in extra costs—counter to the bankruptcy’s purpose to recover as much money as possible for FTX customers and creditors.
