John Ray, The Newly Appointed CEO of FTX, Criticised The Management of The Failed Cryptocurrency Exchange.
London, Friday, 18 November 2022
The company declared bankruptcy last week in the US, and Mr. Ray stated in court documents that he had never "seen such a catastrophic collapse of corporate controls."
Sam Bankman-replacement, Fried's Mr. Ray, also criticised the "total lack of reliable financial information."
In the meantime, Mr. Bankman-Fried admitted to regretting declaring bankruptcy to the Vox news website.
He expressed his disgust for financial regulators and claimed that the choice had largely removed financial matters from his control.
In his 40-year career, which has included managing the bankruptcy of US energy colossus Enron, Mr. Ray claimed that what he had discovered since taking over was "unprecedented."
Mr. Ray also criticised what he called the "erratic and deceptive" public assertions made by his predecessor in documents submitted for the opening day of bankruptcy proceedings before the Bankruptcy Court for the District of Delaware.
Mr. Ray claimed that FTX did not retain centralised control of its cash and that control was concentrated in the hands of a "very small group of inexperienced, naive, and potentially corrupted persons."
The "absence of an accurate list of bank accounts and account signatories," he claimed, was the case.
He claimed that "just a fraction of the digital assets" stored by the company could currently be found.
"I understand that corporate funds of the FTX Group were used in the Bahamas to purchase homes and other personal items for employees and advisors," Mr. Ray further states in his declaration to the court.
The new CEO did note that "a core team of loyal employees" had remained committed to their positions throughout the bankruptcy.
Additionally, he mentioned that some of the victims of these incidents "are current and former employees and executives, whose personal investments and reputations have suffered."
According to estimates, FTX owes money to more than a million individuals and businesses.
Although many experts caution that it may only be a small portion of what they invested in the company, it is unclear how much those with funds in the exchange will receive back at the conclusion of bankruptcy proceedings.
In a recent tweet, Mr. Bankman-Fried stated, "My goal, my one goal, is to do right by customers."
(Research and report by: The Decision Maker)