new boss castigates Sam Bankman-Fried’s methods

The new boss of the FTX cryptocurrency exchange, which filed for US bankruptcy last week, denounced the disastrous management of the company by his predecessor and co-founder of the platform, Sam Bankman-Fried. “Never in my career have I seen such a complete failure of a company’s controls and such a glaring absence of reliable financial information as has occurred,” John Ray III said in a court filing. Thursday in a Delaware bankruptcy court.

A sudden bankruptcy filing and the resignation of Bankman-Fried

“From the compromised integrity of systems and faulty regulatory oversight overseas to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially corrupt individuals, this situation is unprecedented,” added John Ray III, who in the early 2000s oversaw the bankruptcy of former US energy giant Enron.

Considered one of the world’s leading cryptocurrency exchanges, FTX abruptly announced its bankruptcy filing last Friday along with the resignation of Sam Bankman-Fried as the company faced a severe solvency crisis. John Ray III expressed “substantial concerns” about the reliability of FTX’s financial statements and estimated that there were “at least $372 million in unauthorized transfers”.

Company executives “have only located and secured a fraction of the FTX Group digital assets they hope to recover,” he said.

“Inconsistent and misleading” statements

The new boss of FTX also denounced the “inconsistent and misleading” declarations of Sam Bankman-Fried since his resignation, specifying that the latter no longer spoke on behalf of the company. In a private Twitter chat with a Vox reporter published Thursday, Sam Bankman-Fried said he regretted his decision to place FTX under Chapter 11 bankruptcy protection. “Everything would be about 70% settled if I hadn’t done that,” he said.

Sam Bankman-Fried also attacked US regulators, saying that they “do not protect consumers at all” and that they “are unable to tell the difference between what is good and what is bad”. After the publication of this exchange, the former boss tried to explain his remarks. “Part of what I said was thoughtless or rude. I was venting and had no intention of it being published,” he tweeted.