FTX’s bankruptcy hearing details pre-checking by ‘inexperienced and inexperienced individuals’

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Hearings that will determine the fate of FTX, once one of the largest crypto exchanges in the world, began Tuesday in U.S. Bankruptcy Court for the District of Delaware.

“We’re here on an unprecedented issue and I don’t say those words lightly,” James Bromley, a partner at Sullivan & Cromwell and co-head of the firm’s global restructuring practice, said at the hearing. “This is a day one hearing over a week after they were filed; that in itself is unusual. But what do we have here [ … ] is a different kind of animal.”

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Prior to the bankruptcy filing, FTX was “owned by a small group of inexperienced and inexperienced individuals,” Bromley said. “Unfortunately, the evidence seems to indicate that some or all of them have been compromised.”

The crypto exchange fell out of favor earlier this month and filed for Chapter 11 bankruptcy on Nov. 11. At the time, FTX CEO and founder Sam Bankman-Fried resigned from his position and Enron veteran John J. Ray III was appointed as the new DIRECTOR. Ray attended the hearing on Tuesday, along with more than 1,100 people who attended the hearing via a Zoom meeting link and YouTube streaming.

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