Key Takeaways
- FTX CEO John Ray III claims the firm relied on “a hodgepodge” of Google documents, shared drives, Slack communications,and Excel spreadsheets to manage its finances
- The report alleges that FTX’s leadership regularly lost track of accounts and didn’t bother to cash checks.
The latest report filed by FTX leadership in the Delaware bankruptcy Court has revealed more inadequacies in Sam Bankman Fried’s now-bankrupt FTX’s internal operations.
According to FTX CEO John Ray III, the Ffrm was run by three inexperienced people “not long out of college” who relied on “a hodgepodge” of Google documents, shared drives, Slack communications, and Excel spreadsheets to manage its liabilities and assets.
The report further adds that the former FTX US President Brett Harrison had earlier raised concerns bout FTX’s “lack of appropriate delegation of authority, formal management structure and key hires.”
Ray detailing the inefficient functioning of FTX in bankruptcy court, went on to state that his restructuring team had “identified extensive deficiencies in the FTX Group’s controls” which ranged from a lack of appropriate financial and accounting controls to an inadequate group management structure and record-keeping process.
The report alleges that FTX’s leadership regularly lost track of accounts and didn’t bother to cash checks, which were “collected like junk mail,” making reconstructing FTX’s balance sheets a tiresome task.
As per the report, an employee working in FTX’s legal department was “summarily terminated after expressing concerns about Alameda’s lack of corporate controls, capable leadership, and risk management.”
Ray’s report note that FTX’s sister company Alameda wasn’t even clear on what its own positions were, “let alone hedging or accounting for them,”.
Reportedly, A June 2022 portfolio summary, which was supposed to indicate Alameda’s makeup of crypto positions, was fabricated after employees were allegedly instructed by an unnamed higher executive to “come up with some numbers.”
The latest development also comes amid reports that SBF received over $2bn from entities linked to FTX exchange into his personal accounts. FTX crypto empire, which was once worth as much as $40bn, filed for bankruptcy in November following a sudden surge in customer withdrawals as rival exchange Binance opted out of an acquisition plan to bail out its competitor.
The new CEO Ray is currently leading efforts to recover crypto and other assets to return to millions of FTX customers who are expected to lose funds owing to the bankruptcy proceedings.
