FTX Exchange, following the collapse of its business, filed its day one statement in bankruptcy court, citing a “complete failure of corporate controls”, according to a filing in court.
John J. Ray III, the new CEO of FTX Exchange, addressed the many issues facing FTX Exchange and the lack of leadership demonstrated by Sam Bankman-Fried and other executives previously in charge of the company.
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of reliable financial reporting as has happened here,” Ray said. “From the compromised integrity of systems and faulty regulatory oversight overseas, 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 also explained that he has over 40 years of experience in corporate restructuring, such as what is required for FTX. His words go one step further when you realize that someone with this level of experience has never witnessed a “failure” at this level.
The statement sets out five fundamental goals the new management team has to move things in the right direction: implementing controls, protecting and recovering assets, transparency and investigation, efficiency and coordination, and maximizing value.
Additionally, Ray expressed concerns about the audited financial statements currently available. Prager Metis, the auditing firm for said documentation, is listed as the “first-ever CPA firm to officially open its Metaverse headquarters on the Decentraland metaverse platform.”
The new CEO of FTX explained that he knew nothing about this audit firm and said: “In practice, I do not think it is appropriate for stakeholders or the Court to rely on audited financial statements. as a reliable indication of the financial situation. of these silos.
Additionally, Ray expressed the inappropriate use of FTX funds “to purchase homes and other personal items for employees and advisors.”