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FTX’s new CEO criticises the company’s handling of financial information.

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Enron’s bankruptcy was overseen by the new CEO of the defunct bitcoin trading company FTX, who claimed to have never witnessed such a “total failure” of corporate control.
Enron’s bankruptcy was overseen by the new CEO of the defunct bitcoin trading company FTX, who claimed to have never witnessed such a “total failure” of corporate control.
In a document submitted to the U.S. bankruptcy court for the district of Delaware, John Ray III claimed that there was a “totally lack of reliable financial information.”

“Never in my experience have I seen such an utter breakdown of corporate controls and such a total lack of reliable financial information as occurred here, “said Ray. “This situation is unusual, ranging from compromised system integrity and subpar regulatory oversight abroad to the concentration of power in the hands of a relatively small number of unskilled, uneducated, and possibly compromised people.”

Ray pointed out that many FTX Group firms, especially those in Antigua and the Bahamas, lacked proper corporate governance and frequently had no board meetings. Inaccurate lists of bank accounts and account signatories were among the group’s other cash management procedural problems. The creditworthiness of the banking partners received little scrutiny.

Ray also discussed the practise of paying for employees’ homes and other items with company money.

“I hear that the FTX Group utilised business monies to buy residences and other personal assets for workers and advisors in the Bahamas. I understand that some of these transactions don’t seem to have loan documentation, and that some real estate was recorded in the personal names of these employees and advisors on the Bahamas records, he said.

When FTX filed for bankruptcy protection and Sam Bankman-Fried, the company’s founder and CEO, departed, Ray was named CEO less than a week ago. After experiencing the virtual equivalent of a bank run, the troubled cryptocurrency exchange, short billions of dollars, filed for bankruptcy.

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