FTX bankruptcy judge rejects independent examiner appointment motion fearing $100 million loss

• Overseeing the FTX bankruptcy proceedings, Judge Dorsey stated that the cost of hiring an examiner could be up to $100 million for creditors.
• A class action lawsuit filed Tuesday accused Silvergate Bank of “aiding and abetting” FTX and Sam Bankman-Fried’s fraud.
• FTT price over the week declined by more than 23% to trade at $1.619, down from $2.058.

The FTX saga has been going on for about three months now. The bankruptcy proceedings are bringing the creditors closer to victory gradually. However, not every move has been in their favor, with the bankruptcy judge denying their latest motion.

FTX creditors saved

Presiding over the FTX bankruptcy case, Judge John Dorsey denied the motion for appointing an independent examiner in Delaware on Wednesday.

During the hearing, Judge Dorsey stated that appointing an examiner would be pointless and would end up becoming an “unnecesary burden” for FTX creditors. 

Expanding on the same, Judge Dorsey stated,

“There’s no question that if an examiner is appointed here, the cost of the examination, given the scope suggested by the Trustee at the hearing, would be in the tens of millions of dollars, and would likely exceed one hundred million dollars.”

According to Judge Dorsey, the facts and circumstances of this “highly unique” case, the appointment of an examiner would not be in the best interest of the creditors. He added that the appointment would only further slow the progress of the bankruptcy proceeding.

On the other hand, a class action lawsuit filed by an FTX user who lost close to $20,000 during the exchange’s collapse accused Silvergate Bank in the filing.

According to the lawsuit, Silvergate Bank and its CEO Alan Lane were “aiding and abetting” the former CEO of FTX, Sam Bankman-Fried, in his “multibillion-dollar fraudulent scheme.”

Seeking damages, restitution and disgorgement of profits, the lawsuit has not been certified by the court yet. 

FTT price dips again

FTT price, following the broader market cues, slipped to trade at $1.619 at the time of writing to mark a 23.24% crash. The drop in price over the week added to the month-long decline in value, which has reduced FTT by 35%.

FTT/USD 1-day chart

The Parabolic Stop and Reverse (SAR) present above the candlestick indicates an active downtrend which could further reduce the FTT price. If the altcoin keeps painting red on the charts, a fall to $1.210 could result in another 23% crash for the cryptocurrency.

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