New FTX CEO Says ‘Unacceptable Practices’ by ‘Inexperienced and Unsophisticated Individuals’ Led to FTX Collapse – Here’s What Happened

John Ray III, the new CEO of collapsed crypto exchange FTX, has claimed that Sam Bankman-Fried’s crypto empire had virtually no corporate control and a surprising lack of financial and other record-keeping.

in prepared remarks free Before his testimony on Monday, Ray, a bankruptcy expert who previously oversaw the aftermath of collapsed energy giant Enron, said he had never seen such a “complete failure” of corporate controls in his entire career.

“The collapse of the FTX Group appears to have stemmed from the complete concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals, who have failed to implement virtually any systems or controls that are necessary for a company that Others have been entrusted with people’s money or property,” he said.

One of the biggest allegations against SBF is that Alameda Research, a quantitative trading firm founded by SBF that was supposed to operate as an entirely separate company, was using FTX customers’ money to make risky financial bets. Was getting it done.

Ray confirmed that “the client assets of FTX.com were mixed with the assets of the Alameda trading platform.” This could become a serious issue for the SBF and FTX and other officials in Alameda.

However, the SBF has consistently denied that it was aware of the mixing of client properties. It should be noted that recently the BBC Claimed that a former senior FTX employee who worked with SBF said that he should have known that Alameda Research was using FTX client funds.

“No, that is not true,” Bankman-Fried denied claims that she knew Almeida was using FTX user funds to conduct risky trades. “She’s on me, one way or another,” he said.

Other key issues highlighted by Ray include a lack of transaction documentation for the approximately 500 investments made with FTX Group. They also claimed that the company did not provide audited or reliable financial statements, and that FTX did not have financial and risk-management personnel.

SBF was on Monday Arrested after US prosecutors in the Bahamas formally filed criminal charges against him. According to the government of the Bahamas, the SBF is likely to be extradited to the US.

In US law enforcement organizations, the Southern District of New York, which is probing the FTX collapse, confirmed the arrests, while the Securities and Exchange Commission said they had authorized Separate charges related to Bankman-Fried’s “securities law violations,” which will be filed publicly on Tuesday.

In his recent interview with BBC, SBF denied the allegations of cheating while admitting to being incompetent. “I didn’t intentionally cheat, I don’t think I cheated, I didn’t want anything like that to happen. I certainly wasn’t as capable as I thought,” he said.