Lawyer comments on what’s next for FTX creditors in fraud investigation

Attorney Ken Feinberg joins Yahoo Finance Live to discuss the ongoing fraud investigation surrounding FTX and the company's bankruptcy.

Video Transcript

- So let's stick with crypto and talk more about the fallout of the FTX bankruptcy and that continuing to play out in court with millions of creditors still searching for funds. We recently spoke with Ken Feinberg, the former administrator of the September 11 Victim Compensation Fund, about creditors and what they can expect going forward. Let's take a listen.

KENNETH FEINBERG: Well, it is complicated. And it's rather unique because in the FTX bankruptcy there are two questions that are front and center. What is the value of the asset in bankruptcy? Trying to determine the liquidated value of FTX subject to distribution to creditors I think is going to be a rather unique challenge. Secondly, you mention over a million creditors lost their value in the company.

How many of those creditors can demonstrate a loss? Are they going to really come forward, give their name, give their address, designate the amount of the loss, prove that loss in a currency that is very, very opaque. So it's going to be an interesting bankruptcy going forward, both in terms of asset value in the bankruptcy and determining who is an eligible creditor entitled to a check from the bankrupt estate.

- It's certainly a complicated and unique case. Ken, just in terms of the transparency factor and the fact that the Bahamian government's involvement in this, does that further complicate what the next several months, potentially years, could look like with this case?

KENNETH FEINBERG: Yes. Potentially years. Think about it. The first step before you decide who's an eligible creditor, you have to determine the total value of the asset that is available to the bankruptcy court for purposes of distribution. Well, that sounds like it might be a rather complex challenge corralling all of those assets wherever they may be and transforming them into real dollars available in the bankruptcy court.