FTX lacked regulatory oversight and corporate control, its new boss said
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FTX filed for bankruptcy after customers withdrew about $6 billion (CZK 141.2 billion) from its platform within 72 hours. At the same time, rival exchange Binance withdrew from its plan to take over the cryptocurrency exchange FTX. The FTX issues have hit the Bitcoin and other cryptocurrencies market hard.

“Never in my career have I seen such a complete failure of corporate control and such a complete absence of credible financial information as here,” Ray said in the documentary. “From the compromised integrity of systems and flawed regulatory oversight abroad to the concentration of control in the hands of a very small group of inexperienced and potentially compromised individuals, this situation is unprecedented,” Ray added in the filing.

According to him, company funds were used to buy personal items and even houses for employees. The control of the company’s expenses did not meet the standards of the company’s financial management.

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“I understand that some of these transactions appear to have no documentation as loans and some of the properties were registered in the Bahamian records in the personal names of these employees and advisers,” Ray said in the document.

“For example, FTX employees submitted payment requests via chat, where a diverse group of supervisors approved payments by responding to them with personalized emoticons,” the filing states.

Cryptocurrencies for 15.5 million crowns

The price of cryptocurrencies that FTX now holds is roughly $659,000 (CZK 15.5 million), the document says. Bankman-Fried last week valued them at $5.5 billion (CZK 129 billion).

According to Ray, FTX had no centralized cash control. An exact list of the accounts and the persons who could handle them is missing. The firm also did not pay enough attention to the reliability of banking partners around the world.

The company did not have an accounting department and outsourced this function. One of the firms that provided auditing services is based in the virtual world of the Decentraland platform metaverse. “I have major concerns about the information presented in these audited financial statements,” Ray said.

Even compiling a list of FTX employees seems difficult. FTX Group also did not keep books or records and had no security controls in place regarding its digital assets, the document states, among other things.

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