FTX Latest: New CEO Says Controls Were ‘A Complete Failure’
Advisers overseeing the bankruptcy of FTX Group are struggling to locate the company's cash and crypto, citing poor internal controls and record keeping.
The complete failure of corporate controls at the company is “unprecedented,” according to new Chief Executive Officer John J. Ray III, who had a more than 40-year career in restructurings, including overseeing the liquidation of Enron.
The comments were made in a filing asking a federal judge to transfer a competing bankruptcy case filed in New York by Bahamian liquidators to the state. US lawyers for the bankrupt platform also said Sam Bankman-Fried is undermining efforts to reorganize his crumbling empire with “incessant and disruptive tweeting” which appears to be aimed at moving assets away from the control of a US court in favor of one in the Bahamas.
In an article published Wednesday by Vox Media, a reporter posted screen shots of Twitter direct messages in which Bankman-Fried criticized regulators and called the decision to put FTX into bankruptcy a mistake.
More retail money is getting trapped as crypto companies falter. Crypto lender BlockFi, which has suspended customer withdrawals, is reportedly preparing to file for bankruptcy. Gemini Trust Co., the crypto platform run by the Winklevoss brothers, paused withdrawals on its lending program. And Binance CEO Changpeng Zhao told CNBC his company “would be interested in looking at the assets, buying assets, especially some of the better ones” that may be sold in the form of bankruptcy.
FTX's Advisers Have Found Just a Fraction of Company's Crypto (8:20 a.m. New York)
FTX “did not maintain centralized control of its cash” and failed to keep an accurate list of bank accounts and account signatories, or pay sufficient
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