Crypto exchange FTX’s bankruptcy filing states that the company’s corporate funds were used to purchase homes in the Bahamas, as well as personal belongings for employees and consultants. The announcement came just days after founder Sam Bankman-Fried reportedly listed his penthouse for about $40 million.
It is not yet known from which company funds the property purchases were financed. In a court filing, newly appointed CEO and restructuring specialist John J. Ray III said a lack of control over the allocation of funds led to spending “Unacceptable for a commercial enterprise” Path.
Corporate housing allocation is a fairly common practice, but according to Ray “Certain properties have been registered on behalf of employees and consultants”which is not typical of the business.
A penthouse in a private condominium where Bankman-Fried and other FTX executives lived just days ago went up for sale for close to $40 million, allegedly owned by the crypto exchange’s founder.
In his statement, Ray criticized the exchange’s management at the time “Complete lack of financial control”, who explained that he wasn’t sure about the accounting reports that had been made available to him and that the audit in FTX was conducted by companies like Prager Metis, with whom Ray turned out to be “unfamiliar”. It is worth noting that John J. Ray III himself oversaw the restructuring and bankruptcy of the well-known company Enron, has over 40 years of experience in bankruptcy proceedings and is well acquainted with corporate-level business in general.
“Debtors have no bookkeeping”, he wrote, explaining that it would be some time before reliable financial statements could be presented. FTX and some related companies are known to have filed for bankruptcy earlier this month. Bankmann-Fried himself called filing for bankruptcy his biggest mistake. Without this, in his opinion, it would have been possible to rectify the situation.