The new chief executive of bankrupt crypto exchange FTX says that the platform’s leadership was made up of “potentially compromised individuals.”
According to recent bankruptcy filings, FTX CEO John Ray, who took the firm’s help from founder Sam Bankman-Fried last week, says that the crypto exchange’s current situation is unprecedented.
“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.”
However, Ray notes that most of FTX’s employees were unaware of the company’s ailing financial situation. Rather, he says the onus falls on a handful of the company’s leaders.
He also accuses former CEO Bankman-Fried of making “erratic” statements to the public while noting that he no longer represents the debtors.
“Although the investigation has only begun and must run its course, it is my view based on the information obtained to date, that many of the employees of the FTX Group, including some of its senior executives, were not aware of the shortfalls or potential commingling of digital assets…
Finally, and critically, the debtors have made clear to employees and the public that Mr. Bankman-Fried is not employed by the debtors and does not speak for them. Mr. Bankman-Fried, currently in the Bahamas, continues to make erratic and misleading public statements.”
FTX filed for bankruptcy earlier this month after failing to cut a deal with Binance CEO Changpeng Zhao for a bailout. Bankman-Fried is accused of mishandling the firm’s funds by loaning out billions of dollars worth of customer deposits to Alameda Research, FTX’s trading branch.
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