The newly-appointed CEO of the bankrupt FTX exchange, John J. Ray III, has revealed some damning facts about the company’s former management in his prepared testimony for a Financial Services Committee hearing on Tuesday.
In his statement, Ray said that “the exchange’s failure was due to the concentration of control in the hands of a small group of inexperienced individuals who failed to implement necessary systems for safeguarding customers’ assets.”
Ray, who has over 40 years of legal experience, stated that he has never seen such an utter failure of control in an organization. FTX had no proper financial audits, insufficient board governance, and mismanaged company funds.
In his new role as CEO, Ray stated that his goal is to maximize value for customers and creditors in order to mitigate the harm caused by the exchange’s collapse. He was appointed to the position shortly before the company filed for Chapter 11 bankruptcy in the United States.
Furthermore, Ray revealed that his team has secured over $1 billion in digital assets and is working closely with cybersecurity firms to recover any funds that are untraceable due to improper record keeping. He also mentioned that his answers to specific questions might be limited due to the ongoing investigation by US authorities, but he will answer to the best of his ability.
Sam Bankman-Fried, the former CEO of FTX, was arrested by Bahamian authorities yesterday after the US Department of Justice filed criminal charges against him for money laundering and wire fraud. He is expected to be extradited to the United States for trial.
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