FTX Fires Bankman-Fried's Top Deputies: The Latest On Bankruptcy Fallout

Zinger Key Points
  • Caroline Ellison, Gary Wang, and Nishad Singh have been terminated from their positions at FTX. 
  • Group of investors has filed a class action against Bankman-Fried and others who promoted FTX.
FTX Fires Bankman-Fried's Top Deputies: The Latest On Bankruptcy Fallout

The beleaguered cryptocurrency exchange FTX, which recently filed for bankruptcy, has fired some of Sam Bankman-Fried's top deputies. There were close to 300 staff members at FTX, many of which have resigned over the past few weeks. Only a few are based at the Bahamas headquarters.

According to a Wall Street Journal report, Caroline Ellison, Gary Wang, and Nishad Singh have been terminated from their positions at FTX. 

All three of them were fired after FTX appointed John J. Ray III as the new CEO of the company to oversee the bankruptcy, the report says. 

Earlier, Ray said that Bankman-Fried utilized business cash from the FTX Group to buy homes and other personal assets for staff and consultants.

"Never in my career have I seen such a complete failure of corporate controls and a complete absence of trustworthy financial information as occurred here," Ray said. 

Also Read: Marathon Digital CEO Fred Thiel Says FTX Bankruptcy 'Has Increased The Fear Factor'

Earlier last week, FTX said in an emergency court filing that Bahamian regulators ordered Bankman-Fried to gain "unauthorized access" and obtain the company's digital assets following its bankruptcy filing.

Public Remarks By Bankman-Fried Pose A Problem

Meanwhile, legal experts have said that Bankman-Fried's remarks on public platforms may have harmed his defense. 

Bankman-Fried has been speaking with reporters and posting tweets regarding the FTX collapse. However, legal experts have said that such public statements will likely make life more difficult for his defense lawyers seeking to manage the fallout from the exchange's demise.

A defense lawyer at Saul Ewing Arnstein & Lehr says, "There's this old saying that a lawyer who represents himself has a fool for a client. The reverse is also true. An individual who is the subject of an investigation and tries to defend themselves in the court of public opinion has a fool for a lawyer."

Bankman-Fried's statements have already been cited in FTX's bankruptcy proceedings.  

FTX is facing investigations from the Justice Department, Securities and Exchange Commission, and Commodity Futures Trading Commission. 

A group of cryptocurrency investors has also filed a class action against Bankman-Fried and others who promoted FTX.

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