Some Of The Worst Things That Happened Outlined In FTX Bankruptcy Filing.
The worst thing that happened to FTX, and the reason behind why it went bankrupt, have been outlined by some crypto analysts and users on Twitter.
FTX lend its customers fund to executive for personal use
Gurgavin, a crypto analyst, posted a picture of FTX bankruptcy filing which stated that FTX lent Sam Bankman-Fried, former CEO of FTX $1 billion for personal use.
“FTX LENT SAM BANKMAN OVER $1 BILLION DOLLARS FOR PERSONAL USE,” said Gurgavin on Twitter.
Not only, SBF, Genevieve Roch-Decter, the CEO of Grit Capital, a finance media also shared to her 162.8K followers that FTX also loaned their customer fund to the Director of Engineering.
“They also loaned Director of Engineering Nishad Singh $543 million,” she said.
I read the 30 page FTX Bankruptcy court filing.
How bad were FTX's internal controls?
Here are the worst examples 👇
— Genevieve Roch-Decter, CFA (@GRDecter) November 17, 2022
Aside from that, the fund is also used by FTX employees to buy houses and other personal items.
“ In the Bahamas, I understand that corporate funds of the FTX Group were used to purchase homes and other personal items for employees and advisors,” cited the court filing.
Moreover, there does not appear to be any documentation that these transactions have been documented as loans, and certain real estate has been recorded in the personal name of these employees and advisors.
Most decision were made over chat
Although FTX is valued at $32 billion, they never had board meetings, nor did most of their subsidiaries.
Court documents state that SBF frequently communicated via auto-deleted applications, and encouraged employees to do likewise.
Also, the apps used by workers to submit expense reimbursements, which would be accepted or rejected by emoji from a random manager.
Additionally, FTX did not keep proper records of who was employed. Employees and contractors roamed throughout the various companies without proper documentation of their activities.
“FTX didn’t keep proper records of who they employed. Employees and contractors co-mingled throughout the different companies without proper documentation of how they spent their time,”Genevieve
“Certain employees can’t be located: Which could mean that some employees were fake,” she added.