The new CEO of collapsed crypto exchange FTX, John Ray III, has filed an initial statement with the U.S. Bankruptcy Court for the District of Delaware, making a scathing judgment of Sam Bankman-Fried and his companies.
Ray was appointed CEO of FTX less than a week ago when founder Bankman-Fried filed for bankruptcy protection for FTX, Alameda and more than 130 related companies and stepped down as CEO.
The new CEO has taken the lead role in several of the largest corporate collapses in history, exposing criminal activity and malfeasance such as in the Enron case. So the man has experience with scandal and mismanagement. Yet, in his first court filing, he states:
Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.
“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” Ray said.
The new CEO also made it known that the Antigua and Bahamas-based FTX Group companies, in particular, did not have adequate corporate governance and many had never held a board meeting. FTX, FTX US and Alameda had virtually “no accounting department”.
In addition, the bankruptcy trustee chalks up the lack of an accurate list of bank accounts and authorized signatories, as well as insufficient creditworthiness of bank partners.
New FTX CEO Reveals Deep Swamp Of Bankman-Fried
What else is Ray revealing? The bankruptcy trustee also stated, among other things, that the “fair value” of all cryptocurrencies held by FTX internationally is only $659!
Further, Ray estimates the total of all consolidated assets to be around $2.56 billion. Only recently, SBF estimated the value at $5.5 billion on Twitter.
Moreover, Ray also discloses the use of company funds to pay for houses and other items for employees. Literally users paid for SBF’s luxury mansion:
I understand that FTX Group corporate funds have been used in the Bahamas to purchase homes and other personal property for employees and consultants. I understand that there appear to be no loan records for some of these transactions and that certain properties have been recorded in the Bahamian records in the personal names of these employees and consultants.
In addition, it is alleged that there may “be very substantial…
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