The new CEO of crypto exchange FTX has criticized founder Samuel Bankman-Fried and its management for ‘inexperienced, unsophisticated and potentially compromised’.
Crashed cryptocurrency exchange FTX has suffered a “complete failure of corporate control” under founder Sam Bankman-Fried, the company’s new chief executive said on Thursday, calling This situation is “unprecedented”.
The harsh condemnation was made in a filing with the US bankruptcy court by John J. Ray – an executive with 40 years of experience in corporate restructuring, including bankruptcy. Enron’s infamous fall in 2001.
Ray criticized oversight failures, incomplete filings, inadequate and unreliable financial reporting and “potentially compromised” leadership at FTX, which declared bankruptcy last week — a stunning fall for a company recently valued at $32 billion.
“Never in my career have I seen such a complete failure of corporate control and complete lack of reliable financial information as has occurred here,” Ray said in the filing.
“From compromised systems integrity and faulty regulatory oversight abroad, to centralizing control in the hands of a very small group of inexperienced, unsophisticated and highly skilled individuals,” he said. potentially compromised, this is an unprecedented situation.”
FTX’s demise comes amid growing doubts about financial stabilitywith attention focused on the relationship between the exchange and Alameda Research, a trading firm also owned by Bankman-Fried, and reported that he moved funds off the exchange, even when he’s trying to fill a $7 billion financial void.
Binance, the world’s largest cryptocurrency platform, has backed out of a buyout deal that could have prevented a collapse amid reports of customer fund mismanagement and potential investigations. of regulatory agencies.
US officials are now calling for more oversight of the industry, and Congress plans to hold hearings to investigate.
Ray said he had “major concerns” about the reliability of the financial statements and related entities, noting that there had been “at least $372 million in unauthorized transfers.”
Executives at the company — many of whom, Ray said, “are not aware of the lack or ability to incorporate digital assets” — “only partially identify and secure the assets. digital assets of the FTX Group that they hope to revive.”
The explosion was a spectacular reversal of fortune for founder and one-time crypto prodigy Bankman-Fried.
Ray criticized the former CEO by saying that he “often communicated using apps set to auto-delete” and made it clear that he no longer spoke for FTX despite his frequent claims publicly announced.
Bankman-Fried “continues to make erratic and misleading public statements,” Ray said, pointing to comments posted by Vox on Thursday in which the disgraced executive said he was very upset. regret filing for bankruptcy.
“Damn managers, they make things worse,” Bankman-Fried said in a direct message on Twitter to the Vox reporter.
He later tweeted that he was “casting his heart out” and that his comments were kept private.
© 2022 AFP
quote: New CEO says FTX has ‘totally failed’ control (2022, Nov 17) accessed Nov 17, 2022 from https://techxplore.com/news/2022-11- ftx-failure-ceo.html
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