FTX CEO: Never Seen Such A Complete Failure In Corporate Controls!
Since FTX announced bankruptcy last week and changed its leadership, the crypto exchanges new CEO expresses just how surprised and mortified he is on how the company had functioned so far.
Worst Corporate Controls
Crypto exchange FTX’s new CEO John Ray III, recently revealed some shocking revelations about FTX as a company through his bankruptcy court filings.
Ray, who despite having previously led the restructuring of massive financial scandals like Enron, claims that he had never seen such poor management and corporate control like FTX.
In his court filings, Ray criticizes FTX’s lack of adequate human resources, cybersecurity, accounting and auditing teams. He revealed a number of issues that FTX had committed in the past, including a lack of records of their asset transactions, misuse of user funds, and a lack of financial safeguard.
THE FTX FIRST DAY DECLARATION
New CEO John Ray is scathing about Sam Bankman-Fried's management.
— kadhim (＾ｰ^)ノ (@kadhim) November 17, 2022
“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,” Ray wrote in the filings.
“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.”
Ray also revealed a number of things about what the company had done so far, including making a software to hide the misuse of their corporate funds.
It was reported that FTX’s funds were used to not only buy personal houses in the Bahamas for FTX employees and advisors, but were also lent in massive amounts to former CEO Sam Bankman-Fried himself for personal purposes.
“In terms of the celebrity of Mr. Bankman-Fried, his unconventional leadership style, his incessant and disruptive tweeting since the Petition Date, and the almost complete lack of dependable corporate records, these Chapter 11 Cases are unprecedented,” said a separate filing on behalf of what remains of FTX Trading.