John Ray: FTX Mismanaged Users’ Funds
- New FTX CEO John Ray accused the company’s former leader of inappropriate financial dealings.
- FTX was said to have purchased homes for its employees in the Bahamas with corporate funds.
- Binance’s CEO recently claimed that FTX’s financial situation was worse than first thought.
At the height of his powers, former FTX CEO Sam Bankman-Fried was known to live a life of luxury and comfort and reportedly owned a jaw-dropping five-bedroom penthouse in the Bahamas. However, new evidence suggests that the 30-year-old may have used deception to obtain his luxuries.
Law enforcement agencies have continued to dig deep into the affairs of the collapsed FTX, and new findings showed that the company used corporate funds to purchase homes for its employees. In a fresh bankruptcy filing, FTX CEO John Ray highlighted deep financial concerns and untrustworthy financial statements.
FTX’s collapse seems to have new discoveries popping up on a daily basis. The filing revealed that former CEO Bankman-Fried received personal loans of up to $1 billion from four silos companies involved in the saga.
The report noted that Alameda Research loaned SBF $1 billion while Nishad Singh, FTX’s director of engineering, received a loan worth $543 million from the firm. The news will undoubtedly add more to Bankman-Fried’s troubles, confirming claims that he misused the company’s funds.
John went on to describe the situation at FTX as the worst he has seen in his career. According to him, the company lacked corporate control and seemed to have compromised in many areas, including integrity. He was quoted as saying,
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.
The filing contained other scathing claims about the inner workings of Bankman-Fried’s enterprise. It noted that the larger FTX Group failed to keep correct bank account lists, did not “maintain centralized control” over its cash, and paid “insufficient attention to the creditworthiness of banking partners.”
John added that the disbursement of funds was dysfunctional. A part of the filing read,
For example, employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis.
FTX filed for bankruptcy on November 11, and a congressional hearing is slated for December. With the new evidence, the situation is bound to have an intriguing end.