{"id":1743351,"date":"2022-11-18T06:02:09","date_gmt":"2022-11-18T11:02:09","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1743351"},"modified":"2022-11-18T07:18:03","modified_gmt":"2022-11-18T12:18:03","slug":"new-ftx-ceo-blasts-sam-bankman-fried-for-complete-failure-of-corporate-controls","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/new-ftx-ceo-blasts-sam-bankman-fried-for-complete-failure-of-corporate-controls\/","title":{"rendered":"New FTX CEO Blasts Sam Bankman-Fried for &#8220;Complete Failure&#8221; of Corporate Controls"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">24<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fnew-ftx-ceo-blasts-sam-bankman-fried-for-complete-failure-of-corporate-controls%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1743351&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>John Ray, who replaced <a href=\"https:\/\/www.theepochtimes.com\/t-sam-bankman-fried\">Sam Bankman-Fried<\/a> as CEO of crypto platform <a href=\"https:\/\/www.theepochtimes.com\/t-ftx\">FTX<\/a>, said in a new court filing that in his decades of experience overseeing some of the biggest bankruptcies ever, he had never seen anything as bad as FTX, including a \u201ccomplete failure of corporate controls.\u201d<\/p>\n<p>Ray, who once led the infamous energy firm Enron through its <a href=\"https:\/\/www.theepochtimes.com\/t-bankruptcy\">bankruptcy<\/a> proceedings, said in a sworn declaration filed on Nov. 17\u00a0with the U.S. Bankruptcy Court for the District of Delaware and obtained by The Epoch Times that what he saw under the hood of FTX was \u201cunprecedented.\u201d<\/p>\n<p>\u201cNever in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,\u201d Ray wrote in the declaration, which was filed in support of petitions for FTX\u2019s Chapter 11 bankruptcy.<\/p>\n<p>Citing over 40 years of legal and restructuring experience, including some of the biggest corporate failures in history, Ray elaborated on just how badly he thinks FTX was mismanaged before its collapse.<\/p>\n<p>\u201cFrom compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,\u201d he wrote.<\/p>\n<p>Once considered one of the more stable players in the loosely regulated crypto industry, FTX filed for Chapter 11 bankruptcy protection <a href=\"https:\/\/www.theepochtimes.com\/crypto-platform-ftx-goes-bankrupt-boss-resigns_4857569.html\">last week<\/a> and its erstwhile boss, Bankman-Fried, resigned.<\/p>\n<h2>Key Corporate Controls \u2018Did Not Exist\u2019<\/h2>\n<p>Ray, who was named CEO and chief restructuring officer for FTX, in his declaration painted a picture of a tangled web of companies that lacked basic mechanisms of oversight, including around handling of customers\u2019 funds.<\/p>\n<p>In his role at the helm of FTX, Ray said one of his core aims is to implement controls and corporate standards including \u201caccounting, audit, cash management, cybersecurity, human resources, risk management, data protection, and other systems that did not exist, or did not exist to an appropriate degree, prior to my appointment.\u201d<\/p>\n<p>Ray also wrote that there are \u201cquestions\u201d about Bankman-Fried\u2019s leadership that the Chapter 11 bankruptcy process would scrutinize.<\/p>\n<p>Bankman-Fried, who earlier apologized for his role in the FTX collapse, did not immediately respond to a request for comment from The Epoch Times regarding Ray\u2019s claims.<\/p>\n<p>But in a series of posts on Twitter, Bankman-Fried said that his \u201cone goal\u201d at this stage \u201cis to do right by customers.\u201d<\/p>\n<p>\u201cI\u2019m contributing what I can to doing so. I\u2019m meeting in-person with regulators and working with the teams to do what we can for customers,\u201d he wrote. \u201cAnd after that, investors. But first, customers.\u201d<\/p>\n<p>Initially, it appeared that around 100,000 creditors would be impacted by FTX\u2019s implosion, but an amendment (<a href=\"https:\/\/storage.courtlistener.com\/recap\/gov.uscourts.deb.188450\/gov.uscourts.deb.188450.9.0.pdf\">pdf<\/a>) to the bankruptcy filing states that the total could actually be closer to 1 million.<\/p>\n<h2>\u2018More Effective Oversight of Cryptocurrency\u2019<\/h2>\n<p>Not only has FTX\u2019s collapse sent shockwaves through global crypto markets, it has also drawn the attention of Washington lawmakers.<\/p>\n<p>\u201cIt is crucial that our financial watchdogs look into what led to FTX\u2019s collapse so we can fully understand the misconduct and abuses that took place,\u201d\u00a0Sen. Sherrod Brown (D-Ohio), Senate Committee on Banking, Housing, and Urban Affairs chairman, said in a\u00a0<a href=\"https:\/\/www.banking.senate.gov\/newsroom\/majority\/brown-statement-on-ftx%20\" target=\"_blank\" rel=\"noopener\">recent statement<\/a>.<\/p>\n<p>The implosion of FTX has prompted policymakers to put the crypto industry under a magnifying glass, with the potential for a regulatory crackdown.<\/p>\n<p>\u201cThe recent failure of a major cryptocurrency exchange and the unfortunate impact that has resulted for holders and investors of crypto assets demonstrate the need for more effective oversight of cryptocurrency markets,\u201d Treasury Secretary Janet Yellen said in a <a href=\"https:\/\/home.treasury.gov\/news\/press-releases\/jy1111\">statement on Wednesday<\/a>.<\/p>\n<h2>\u2018When It Rains, It Pours\u2019<\/h2>\n<p>The downfall of FTX started on Nov. 2 when CoinDesk <a href=\"https:\/\/www.coindesk.com\/business\/2022\/11\/02\/divisions-in-sam-bankman-frieds-crypto-empire-blur-on-his-trading-titan-alamedas-balance-sheet\/\">published<\/a> exclusive balance sheet details from Alameda Research, a trading firm established by Bankman-Fried.\u00a0The report exposed that a substantial amount of Alameda\u2019s assets were held in FTT, a native token belonging to FTX.<\/p>\n<p>CNBC would later publish a bombshell <a href=\"https:\/\/www.cnbc.com\/2022\/11\/13\/sam-bankman-frieds-alameda-quietly-used-ftx-customer-funds-without-raising-alarm-bells-say-sources.html\">report<\/a> that suggested Alameda was trading billions of dollars from FTX accounts without clients\u2019 knowledge and leveraged FTT as collateral.<\/p>\n<p>The unraveling of FTX picked up speed when Changpeng Zhao, CEO of its main rival, Binance,\u00a0<a href=\"https:\/\/twitter.com\/cz_binance\/status\/1589283421704290306\" target=\"_blank\" rel=\"noopener\">posted messages<\/a>\u00a0on Twitter questioning the stability of FTX operations and announcing it was liquidating its holdings of FTT.<\/p>\n<p>A liquidity crunch ensued as FTX users rushed for the exits. Bankman-Fried\u00a0<a href=\"https:\/\/twitter.com\/SBF_FTX\/status\/1590709174572572675\" target=\"_blank\" rel=\"noopener\">said that<\/a>\u00a0on Sunday, the exchange experienced around $5 billion in withdrawals, the biggest amount \u201cby a huge margin.\u201d<\/p>\n<p>\u201cBecause, of course, when it rains, it pours,\u201d he said.<\/p>\n<p>Bankman-Fried later scrambled to raise money, even approaching Binance for help.<\/p>\n<p>After Bankman-Fried and Zhao initially announced a tentative deal that Binance would buy FTX\u2019s businesses outside the United States and so toss FTX a lifeline, that later fell through.<\/p>\n<p>Zhao reversed his offer to buy parts of FTX, citing reports of \u201cmishandled customer funds and alleged U.S. agency investigations.\u201d<\/p>\n<p><em>Andrew Moran contributed to this report.<\/em><\/p>\n<div class=\"author_wrapper\">\n<div class=\"one_author_block round\">\n<div class=\"top_row\">\n\t\t\t\t\t<a href=\"https:\/\/www.theepochtimes.com\/author-tom-ozimek\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/10\/WEB_TomOzimek-_1.jpg\" alt=\"Tom Ozimek\" \/><\/a><\/p>\n<p>Follow<\/p>\n<\/div>\n<p>Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he&#8217;s ever heard is from Roy Peter Clark: &#8216;Hit your target&#8217; and &#8216;leave the best for last.&#8217;\n<\/p>\n<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>John Ray, who replaced Sam Bankman-Fried as CEO of crypto platform FTX, said in a new court filing that in his decades of experience overseeing some of the biggest bankruptcies<\/p>\n","protected":false},"author":1,"featured_media":1696806,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[547],"tags":[],"class_list":["post-1743351","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-bongino-report"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1743351","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1743351"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1743351\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1696806"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1743351"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1743351"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1743351"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}