- FTX CEO John Wray testified before the US House Financial Services Committee
- John Ray has criticized former CEO Sam Bankman-Fried for unacceptable business practices.
- New management has recovered over $1 billion of lost funds.
- Sam Bankman-Fried has accused John Ray and his team of putting FTX US client funds at risk.
The current CEO of bankrupt crypto exchange FTX, John Ray III, testified before the US House Financial Services Committee today. The long-awaited congressional hearings were originally scheduled to also include former CEO Sam Bankman-Fried, but given that he is currently under arrest in the Bahamas, Ray has said lawmakers and creditors cannot. It has given some key insights into the controversial business activities that have occurred. It was once the second largest cryptocurrency exchange in the world.
Unacceptable Management Practices at FTX
According to John Ray, FTX had “unacceptable management practices” that ultimately led to its collapse. The current CEO has made it clear that there is literally no record keeping within the company. The man brought in to clean up the controversial Enron scandal testified that he had never seen such a complete lack of record keeping at the company.
Owners, businesses, and senior management had virtual control over all accounts and could move money and assets as needed without customers noticing. said John Ray.
As for the money lost due to continued poor management at FTX and Alameda Research, Ray said the lost money exceeded $7 billion. His team has successfully recovered more than $1 billion of those funds, he added. John Ray estimates that it will take several months to secure the assets of the bankrupt exchange. Lack of proper financial records is a major obstacle in this process. “‘You can’t trust a piece of paper in this organization,’ he added.
Sam Bankman-Fried’s congressional testimony
The former CEO was also expected to testify before a congressional committee. However, a transcript of his intended testimony was released by Forbes earlier today.
According to SBF testimony, “American customers were protected, at least until Ray’s team took over.” is clarified. Sam Bankman-Fried was confident that with FTX US still solvent, the US subsidiary’s customers would soon be complete.