On Monday, FTX under CEO John J. Ray III released its first report, pointing out the mistakes and failures of FTX’s previous management under Sam Bankman-Fried that led to the shutdown of the crypto exchange and its subsidiaries.
As claimed in a press release on April 10, FTX Debtors established and discussed control frameworks with the former team under previous CEO Sam Bankman-Fried and his teammates. The statement illustrates blunders in crucial areas including management and governance, finance and accounting, digital asset management, information security, and cybersecurity.
Talk from FTX’s current CEO John J.Ray
John J. Ray III, the present CEO of FTX, stated:
“We are releasing the first report in the spirit of transparency that we promised since the beginning of the Chapter 11 process. In this report, we provide details on our findings that the FTX Group failed to implement appropriate controls in areas that were critical for safeguarding cash and crypto assets.”
The Report is based, among other things, on the Debtors’ analysis of terabytes of electronic data and communications, more than one million documents, and interviews conducted with 19 former FTX Group employees.
According to the report, the reasons for the FTX subside included SBF’s valid point on all major decisions, the lack of risk management and work experience among key personnel shortly after graduation, Singh’s codebase change on July 31, 2019, to allow Alameda to withdraw unlimited crypto assets from FTX, and changing it a week later to free Alameda from automatic liquidation. In addition, the FTX group kept almost all crypto assets in hot wallets, and SBF lied about using cold wallets.
