While the FTX affair is in full swing following recent events, it turns out that the management of the company itself has been abysmal for quite a while now. John Ray III, the new CEO of FTX, speaks of an unprecedented situation: “Never in my career have I seen such a complete failure of corporate controls and such a total absence of financial information reliable than here. »
Disastrous FTX management
Documents recently filed by the new CEO of FTX, namely John Ray III, show a striking observation regarding the management of the exchange.
🔴 LIVE – Follow the FTX deal in real time
John Ray III, whose name remains relatively unknown within Europe, has more than 40 years’ experience in managing bankrupt companies. He is particularly known for having stood up to Wall Street when he had to manage the case of Enron, which was then one of the most important American companies before becoming one of the major symbols of the drift of capitalism by its innumerable frauds and manipulations.
And yet, even after such experiences, his findings are damning about the chaos within FTX :
“Never in my career have I seen such a complete failure of corporate controls and such a total absence of reliable financial information as here. From the compromised integrity of systems and faulty regulatory oversight overseas, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented. »
For example, FTX Group allegedly failed to “maintain centralized control” over its cash flow, failed to maintain clear and orderly bank account listings, and failed to “pay sufficient attention to the creditworthiness of its banking partners. Internal communication also seemed unprofessional given the scale of FTX:
“For example, FTX Group employees submitted payment requests through an online chat platform where a disparate group of supervisors approved disbursements by responding with emojis. »
👉 FTX: the answers to all your questions about the affair that is shaking up cryptocurrencies
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Countless flaws
It would even seem that FTX funds themselves were at risk: John Ray III speaks in particular of “unacceptable practices” for this purpose, and he mentions the use of an insecure instant messaging group over which were transmitted confidential private keys as well as “extremely sensitive data”.
Within the company itself, the new CEO reveals that the available funds have been used to purchase real estate and various purchases for certain employees and advisorsall registered through incomplete documentation.
In addition, various FTX branches, including those in Antigua and the Bahamas (FTX Digital Markets), lacked appropriate corporate governance practices. Some didn’t even have never held any meeting with their board of directors.
Finally, John Ray III asserts firmly that Sam Bankman-Fried has nothing to do with FTX anymore :
“Finally, and this is essential, the Debtors have made it clear to employees and the public that Mr. Bankman-Fried is not employed by the Debtors and does not speak on their behalf. Mr. Bankman-Fried, currently in the Bahamas, continues to make erratic and misleading public statements. »
👉 Read also – The Bahamian government has held the assets of FTX Digital Markets for several days
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Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
Maximilien Prue
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