(New York) The ex-executives of the now bankrupt cryptocurrency exchange FTX showed a “complete failure” at all levels of control, recklessly spending their customers’ money, his new boss said on Monday.
There are still many questions at this point about the reasons for the group’s explosion and an investigation is underway, John Ray wrote in a document released on the eve of a congressional hearing.
The platform’s founder and former boss, Sam Bankman-Fried, will be interviewed in due course as part of this process, he said.
The latter must, like John Ray, speak on Tuesday before a parliamentary committee of the House of Representatives.
But at first glance, “the collapse of the FTX group appears to be the result of the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals, who have not implemented any of the systems or controls required for a company to which other people’s money or assets are entrusted, ”underlines the official.
Considered one of the world’s leading cryptocurrency exchanges, FTX was suddenly unable to return the money they had deposited there to its customers in early November. The group announced its bankruptcy filing on November 11.
The investigation has already shown that the assets deposited by customers on FTX were mixed with those of the brokerage and crypto investments company Alameda, also founded by Sam Bankman-Fried. And Alameda gleefully dipped into FTX client funds to make risky bets.
FTX also went on a “spending spree” starting in late 2021, with $5 billion in ventures and investments “may only be worth a portion” of that.
The platform has also disbursed, in loans or payments, more than 1 billion dollars intended for people within the company, says its new boss.
For John Ray, who oversaw several bankruptcy proceedings, including that of the former American energy giant Enron, the objective now is to “maximize the value” of the assets still held by FTX to reimburse as much as possible the customers and creditors of the band.
So far, the new management team has “identified over $1 billion in digital assets” at risk of theft or unauthorized transfer.