FTX, the cryptocurrency exchange blamed for the recent crypto market crash, has once again found itself on the dark side of the news following a (not surprisingly!) Discovery involving its employees and advisers.
In an attempt to help shed light on how the Sam Bankman-Fried-owned company operated and transacted, new FTX CEO John Ray submitted a 30-page document to US bankruptcy court. United States for the District of Delaware.
In his filing, Ray said:
“In the Bahamas, I understand that FTX Group corporate funds have been used to purchase homes and other personal items for employees and advisors.”
To make matters worse, staff said put acquired properties under their namesmaking it almost impossible to claim the properties.
Already under a gaping financial hole to the tune of $8 billion, FTX and SBF are set to face more negative reviews from disgruntled investors.
The Bahamas. Image: PlanetWare
More FTX red flags surface again
Apart having no type of documentation who would qualify the purchases as loans and letting its advisers and employees put the real estate under their name, FTX appears to have committed other offenses with respect to the conduct of its business.
On the one hand, Ray shared that the cryptocurrency exchange company does not have proper books (records) and security controls regarding its digital assets.
In addition, reimbursements for business expenses incurred by employees were apparently approved via personalized emojis that were sent in response to chat requests.
The newly appointed CEO said it is now difficult for them to locate some of the exchange’s employees who he says are either leaked or non-existent.
“At this time, the Debtors have not been able to prepare a complete list of those who worked for the FTX Group. Repeated attempts to locate certain alleged employees to confirm their status have been unsuccessful to date,” a he declared.
FTX former CEO Sam Bankman-Fried. Image: Business 2 Community
FTX: millions of investments are lost
On November 11, in order to keep the company afloat and buy time to pay its creditors, FTX – which was still under the orders of SBF – filed for Chapter 11 bankruptcy in Delaware.
With this in mind, a number of investors have already decided to write down their investments in the crypto exchange as they are unconvinced that the company will be able to bounce back from its collapse.
Japanese conglomerate Softbank announced earlier that it will now label its $100 million investment in FTX like zero while fellow Singapore-based Asian Temasek recently informed the public that she will also write its $275 million stake.
Elsewhere, the unfortunate turn of events due to the implosion of one of the world’s leading cryptocurrency exchanges led to the sudden crash of the crypto market which lost almost $200 billion in capitalization.
Crypto total market cap at $784 billion on the daily chart | Featured image from Forbes, Chart: TradingView.com