New CEO says FTX had ‘complete failure of corporate control’
The Hindu
FTX filed for protection in the United States on November 11 after traders pulled $6 billion from the platform in three days
New FTX CEO John Ray said there was flawed regulatory oversight and a lack of corporate control of the bankrupt crypto exchange founded by Sam Bankman-Fried in a U.S. court filing on Thursday.
In the highest-profile crypto blowup to date, FTX filed for protection in the United States on November 11, 2022, after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal.
“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,” Mr. Ray said in the filing, which was lodged with the District of Delaware bankruptcy court.
“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,” Mr. Ray added in the filing.
Mr. Ray, a bankruptcy specialist, who took over from Mr. Bankman-Fried as CEO when FTX filed for protection on Friday, did not name any specific overseas regulator in that part of the 30-page filing.
FTX founder, Mr. Bankman-Fried, did not immediately respond to a request for comment on the allegations contained in the filing.
In the filing, Mr. Ray also alleged that Mr. Bankman-Fried had made “erratic and misleading public statements”, citing an exchange with a reporter on Twitter.