A federal appeals court on Friday ruled that an independent examiner must be appointed to oversee FTX’s ongoing bankruptcy to sort out what went wrong at the cryptocurrency exchange before it collapsed, WSJ Pro Bankruptcy reported. Judges for the U.S. Court of Appeals for the Third Circuit said that the Bankruptcy Code clearly states that a bankruptcy court is required to appoint an independent examiner in cases with over $5 million in debt if one has been requested and no outside trustee has been brought in to manage the chapter 11 cases. The judges also said that it is a matter of public interest to have a report on what went wrong at FTX before it filed for bankruptcy in November 2022. “The collapse of FTX caused catastrophic losses for its worldwide investors but also raised implications for the evolving and volatile cryptocurrency industry,” the judges wrote in their opinion. “In addition to providing much-needed elucidation, the investigation and examiner’s report ensure that the Bankruptcy Court will have the opportunity to consider the greater public interest when approving the FTX Group’s reorganization plan.”
