FTX Blocked From Selling Assets by US Trustee

FTX was the second-largest global cryptocurrency trading platform. In 2022, several media outlets stated that the company might be a financial bubble, triggering an outbreak of withdrawals and reducing company assets to virtually zero.

US crypto traders FTX has been blocked from unwinding its affiliates to pay debts, including units in Japan and Europe and clearinghouse LedgerX, British media reported.

Trustee Andrew Vara filed an objection to plans by bankrupt FTX to sell off the assets, arguing that these companies might have important information for the ongoing investigation.

"The sale of potentially valuable causes of action against the debtors' directors, officers and employees, or any other person or entity, should not be permitted until there has been a full and independent investigation into all persons and entities that may have been involved in any malfeasance, negligence or other actionable conduct," the filing states.

The collapse of FTX shocked the financial industry and annihilated the $15 bn paper fortune of its founder and ex-CEO Sam Bankman-Fried. The latter claims he is innocent and was not involved in what prosecutors called "fraud of epic proportions."

Sam Bankman-Fried is facing charges on eight criminal counts, including conspiracy to commit securities fraud and money laundering. Separately, the Security and Exchange Commission charges Bankman-Fried for intentionally deceiving customers and investors in order to enrich himself and others. It is alleged that SBF likewise violated campaign finance laws, making secret political donations.