New boss upset with FTX cryptocurrency exchange business practices

The new head of cryptocurrency exchange FTX has been shocked by the group’s previous state and management. “Never in my career have I experienced such a complete failure of corporate control and lack of trustworthy financial information,” said John Ray, who took over as CEO of FTX after it filed for bankruptcy.

What the previous management team did about FTX founder Sam Bankman-Fried was simply “unacceptable”. Ray has 40 years of experience in corporate restructuring, among other things, he was entrusted with the liquidation of the US company Enron after its historic bankruptcy.

At FTX, “control was in the hands of a very small group of inexperienced, naive, and potentially vulnerable individuals,” Ray explained in his first bankruptcy court filing yesterday. The restructuring expert explained that the situation is “unprecedented”.

Crash within a few days

FTX – one of the largest trading platforms for digital currencies like Bitcoin – collapsed within a few days after a massive influx of funds due to liquidity concerns. Billions of customers’ money cannot be paid out. Last week, the 30-year-old founder of FTX, Bankman Fried, announced his resignation and filed for bankruptcy of the group in the US state of Delaware.

However, it is still not entirely clear how and where exactly the bankruptcy proceedings will take place. Because Bankman-Fried filed for Chapter 11 bankruptcy protection for more than 130 companies in his crypto empire, but FTX was headquartered in the Bahamas. The authorities there have already frozen the company’s assets and appointed an insolvency officer.

Bankman-Fried, meanwhile, called the US bankruptcy filing his biggest mistake to a reporter for the Vox news site. The people in charge will now try to “burn” the group. Meanwhile, new FTX President Ray lamented that Bankman-Fried continued to make “erratic and misleading” public statements.