New FTX Chief Appalled By Mismanagement At Crypto Exchange Under Sam Bankman-Fried

Zinger Key Points
  • New CEO of FTX says he has no faith in unaudited balance sheets created under Sam Bankman-Fried.
  • All banks holding FTX cash have been directed to not follow Bankman-Fried's instructions.

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, new FTX CEO John J. Ray III said in scathing remarks of the mismanagement at bankrupt cryptocurrency exchange FTX.

Ray, who was hired after FTX declared bankruptcy last week, said that in his 40 years of experience working on massive corporate meltdowns like Enron, he had "never" seen anything like this case.

“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 wrote in a statement submitted to bankruptcy court in Delaware.

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Ray also slammed FTX founder Sam Bankman-Fried, who no longer works for the cryptocurrency exchange or its related entities, he explained. “Mr. Bankman-Fried, currently in the Bahamas, continues to make erratic and misleading public statements."

“Mr. Bankman-Fried, whose connections and financial holdings in the Bahamas remain unclear to me, recently stated to a reporter on Twitter: 'F*** regulators they make everything worse' and suggested the next step for him was to 'win a jurisdictional battle vs. Delaware,'” he added.

Ray also questioned claims made by Bankman-Fried while he was CEO of FTX and said he had no faith in unaudited balance sheets created under Bankman-Fried’s direction, as part of a lengthy declaration of all the information he has so far discovered.

“Mr. Bankman-Fried also claimed that, as of July 2022, had 'millions' of registered users. These figures have not been verified by my team,” he wrote.

Ray continued by saying that since Bankman-Fried left, the company has instructed any banks they believe may be holding FTX cash to halt withdrawals and refuse to follow Bankman-Fried’s instructions.

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Posted In: CryptocurrencyNewsTop StoriesMarketscryptocurrenciesFTTFTXJohn J. Ray IIISam Bankman-Fried
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