FTX CEO Describes 'Pure Hell' Leading Up to Exchange's bankruptcy case
Terrill Dicki Feb 08, 2023 10:33
CEO John Ray testified for FTX bankruptcy judge John Dorsey on a request to appoint an independent examiner.
John Ray, who recently took over as chief executive officer of the cryptocurrency exchange FTX after the business declared bankruptcy, has revealed some of the chaotic incidents that have occurred at the firm after the bankruptcy filing.
Due to the fact that FTX does not have a physical office, Ray said in his testimony on February 6 before the United States Bankruptcy Court for the District of Delaware that he and other experts had been "carefully" conducting an investigation into FTX's actions. Claiming that "inadvertent mistakes" may result in "hundreds of millions of dollars of worth" being lost, the CEO of FTX seemed to be fighting back against a petition to appoint an independent examiner to the bankruptcy case.
According to Ray, there was "not a single list of anything" pertaining to bank accounts, income, insurance, or people when he assumed leadership of FTX in November 2022, which resulted in a "huge rush for information." The chief executive officer of FTX said that on the same day that he helped file a petition for Chapter 11 bankruptcy, there were repeated efforts to steal cryptocurrency, which resulted in security specialists and liquidators working fast to safeguard cash.
"Your typical petition on the first day might be as hectic as it often is — this was something that I have never encountered before," said Ray. "This was something that I have never experienced before." "Those hacks continued for the better part of the whole night. It was really forty-eight hours of what I can only characterise as horror on earth.
Prior to gaining leadership of the firm, the current CEO of FTX said that he did not have any relationships with past executives at the exchange, including former CEO Caroline Ellison of Alameda Research, FTX co-founder Gary Wang, and former CEO Sam Bankman-Fried, as well as his parents. According to Ray, under Bankman-Fried, anybody "that was in a control position" no longer had the power to command the conduct of the FTX corporation in any way.
In the midst of a petition brought forth by the Office of the U.S. Trustee, in which it was argued that the court need to appoint an independent examiner who would provide a public report offering transparency into the bankruptcy processes, Ray testified. Although Ray having no relationship to Bankman-Fried previous to his taking over as CEO, Juliet Sarkessian, who represented the United States Trustee's office, maintained that the appointment of an examiner was still in the public interest despite the fact that Ray had no link to Bankman-Fried.
The bankruptcy processes for FTX are now underway. During this time, creditors and other interested parties will make motions about the firm's assets, examine the business, and divulge material that might possibly damage the criminal case against Bankman-Fried. On February 1, the legal team that is representing FTX debtors made a request to have subpoenas issued to members of Bankman-immediate Fried's family in order to get information and documents from them.
When this article was written, Judge John Dorsey had not yet decided how to proceed with the motion for an examiner. This article is in the process of development and may be updated in the future.
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