Crypto exchange FTX didnt have proper accounting and corporate spending
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Crypto exchange FTX didn’t have proper accounting and corporate spending was approved with emoticons

Sam Bankman-Fried’s business empire has misappropriated customer funds, according to the new head of once $32 billion crypto exchange FTX, which is going bankrupt. There were no credible financial reports among the documents, and management had little control over what happened in them.

John Ray III, a veteran liquidator, told a US court yesterday that FTX was the most egregious example of corporate bankruptcy he has faced in his 40-year career. And it’s a company that has raised billions of dollars from top VCs like Sequoia, SoftBank, and Temasek.

FTX failed to keep proper accounting records, an expert in a Delaware court said, there was no way to protect digital assets owned by customers, and misappropriation of customer funds was concealed. The company did not have its own accounting at all – this was done by a third-party organization as part of outsourcing. Absence “exact list” Company bank accounts, there is not even a list of its employees. Security keys for managing digital assets were controlled “an insecure group email account”.

The company’s funds were spent unchecked on buying real estate and personal items for employees and consultants, and payments were approved through posts with emojis on the company’s Slack messenger. FTX management kept no record of decision-making and, to the contrary, Mr Bankman-Fried frequently used instant messengers with automatic message deletion “and encouraged employees to do the same”.

    Image source: succo / pixabay.com

Image source: succo / pixabay.com

Alameda Research, part of the cryptocurrency empire, provided $4.1 billion in loans to related parties, of which $3.3 billion was provided to Bankman-Fried personally and entities controlled by him. Previously, the businessman said he “accidentally” transferred a total of $8 billion in Alameda funds from FTX clients. Mr John Ray said that was one of the aims of the bankruptcy proceedings “Comprehensive, transparent and balanced investigation [вероятных] allegations against” Banker Fried.

As of September 30, the real value of the assets of the international division of crypto exchange FTX is only $659,000. The amount owed to customers has not yet been calculated, but is expected to be calculated “significant”. The new head of the company said that FTX had transferred $740 million in cryptocurrency to offline wallets protected from external attacks. He also recalled that FTX resources were hacked immediately after the bankruptcy filing, noting that about $400 million worth of funds were stolen.

In general, bankruptcy is hampered by the lack of reliable information, and all documents drawn up in the Bankman Fried era are not credible, if only because they do not contain data on obligations to customers. The bankruptcy filing estimated the total assets and liabilities of international and US FTX and Alameda at between $10 billion and $50 billion. It was previously revealed that the Bahamas authorities had filed for bankruptcy of another holding company. FTX Digital. It is possible that the cases will be merged.

About the author

Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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