FTX auditors recommend further investigation into the company’s funding shortfall and its legal representative, S&C

On May 24th, the bankruptcy court appointed examiner, Robert J. Cleary, released a detailed report recommending a deeper investigation into the bankrupt FTX Group, particularly regarding FTX.US, its asset management practices, and the legal representation work of Sullivan & Cromwell. The report outlined the necessity for three main investigations to further understand the specifics of FTX Group's collapse.

The report noted serious funding shortages on FTX.US's balance sheet, particularly in November 2022, suggesting possible misuse of funds through the mixing of customer assets and company assets. Cleary called for a comprehensive investigation to determine the reasons, frequency, and solutions for the funding shortage, and to increase public confidence in the bankruptcy process.