Latest FTX Bankruptcy Filing Is Brutally Frank

'Never in my career have I seen such a complete failure of corporate controls,' says new CEO
By John Johnson,  Newser Staff
Posted Nov 17, 2022 1:40 PM CST
He Oversaw Enron Bankruptcy, Sees FTX as a Bigger Mess
Signage for the FTX Arena, where the Miami Heat basketball team plays, is illuminated on Saturday, Nov. 12, 2022, in Miami. The arena   (AP Photo/Marta Lavandier, File)

So just how bad are the books at FTX, the crypto exchange whose implosion has rocked the entire field? A filing in bankruptcy court by the CEO newly appointed to oversee the company's restructuring laid things out in remarkably stark language:

  • “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,” wrote John Ray in the filing, per the Wall Street Journal. “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 context: Ray has managed some of the biggest bankruptcies in history—including that of energy giant Enron, notes the New York Times.

  • Useless: Ray also said he had no confidence in the balance sheets of FTX and sister company Alameda Research, adding that a "substantial portion" of FTX assets may be "missing or stolen," per CNBC. The filing goes into detail on the mismanagement under former CEO Sam Bankman-Fried.
  • More SBF controversy: Bankman-Fried, meanwhile, spoke to a Vox reporter and made a series of controversial statements, including that government regulators "make everything worse" and that his prior advocacy of stronger regulations was "just PR." He also suggested that he made a mistake in filing for bankruptcy, because "withdrawals would be opening up in a month with customers fully whole.”
  • Walking it back: “Some of what I said was thoughtless or overly strong—I was venting and not intending that to be public,” Bankman-Fried tweeted after his comments were published.
(More FTX stories.)

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