The new CEO of FXT says the crypto exchange suffered a complete failure of corporate controls. That being said, John J. Ray who managed Enron after the platforms collapsed refers to the situation at FTX as‘ unprecedented.’
New CEO of FTX Says Crypto Exchange Suffered Complete Failure of Corporate Controls
The new CEO of the embattled crypto exchange platform FTX, John J. Ray III previously helped to manage the fallout from one of the most infamous financial collapses in the last couple of decades which is that of Enron. But in a bankruptcy court filing made on Thursday, Ray has now referred to the situation at FTX as a failure which is unlike anything he has ever seen.
FTX which was once the second biggest cryptocurrency exchange on Friday filed for bankruptcy after a rival exchange, Binance, backed out of a deal to purchase it. Former CEO of the firm, Sam Bankman-Fried resigned from his position and is reported to be in the Bahamas.
What the Bankruptcy Filing Claims
In the bankruptcy court filing, Ray wrote that “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.”
“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,” Ray wrote. Ray had previously taken control of Enron during its own scandal and bankruptcy back in the early 2000s.
And it will now be the task of Ray to guide FTX through the whole bankruptcy process as well as the investigations into the company.
FTX Also Experienced a Possible Hack Recently
FTX also experienced a possible hack reportedly in which hundreds of millions of dollars in cryptocurrency apparently went missing. And with that being said, it remains to be seen if the customers of FTX will eventually get back the money that they deposited with the platform and exchange.
Former CEO Bankman-Fried Claims Filing For Bankruptcy Was a Mistake
In an interview with Vox which was published on Wednesday, Bankman-Fried called filing for bankruptcy a mistake and suggested that he could have saved the company if he had maintained his position of the company.