New FTX CEO John Ray has spoken out about how the crypto exchange has failed.
The company filed for bankruptcy in the United States last week and, in court records, Mr Ray said he had never ‘seen such a complete failure of corporate controls’.
Mr Ray, who replaced Sam Bankman-Fried, also criticized a “complete lack of reliable financial information”.
Meanwhile, Mr Bankman-Fried told the Vox news site that he regretted having filed for bankruptcy.
He said the decision was largely beyond his control on financial matters and he also expressed contempt for financial regulators.
“Erratic and misleading”
Mr Ray said what he had discovered since taking office was “unprecedented” in his 40-year career, which includes overseeing the bankruptcy of US energy giant Enron.
In documents filed for the first day of bankruptcy proceedings in the District of Delaware Bankruptcy Court, Mr. Ray also criticized what he called “erratic and misleading” public statements by his predecessor.
Mr Ray said that FTX had concentrated control in the hands of a “very small group of inexperienced, unsophisticated and potentially compromised individuals”, and that it did not maintain centralized control of its cash.
Instead, he said, there was “an absence of an accurate list of bank accounts and account signatories.”
So far, he said it has only been possible to locate “a fraction of the digital assets” held by the company.
Mr. Ray’s statement to the court also states: “In the Bahamas, I understand that FTX Group Company funds have been used to purchase homes and other personal items for employees and advisors.”
The new chief executive added that there was “a core team of dedicated employees” who had remained focused on their jobs since the bankruptcy.
He also noted that some of those most affected by these events “are current and former employees and executives, whose personal investments and reputations have suffered.”
It is estimated that FTX owes money to over a million people and organizations.
It’s unclear how much those with funds in the exchange will recover at the end of bankruptcy proceedings, although many experts warn that it may be only a small fraction of what they invested in the exchange. company.
Mr. Bankman-Fried recently tweeted: “My goal – my only goal – is to do well with customers.”