According to the bankruptcy statement, the company used its funds to purchase homes and “personal effects” in the Bahamas on behalf of FTX’s employees and consultants. The new filing comes days after founder Sam Bankman-Fried’s penthouse hit the market for nearly $40 million.
It was not immediately clear where the companies were funded.
In a statement to the court, FTX’s new chief executive, John Ray III, said the lack of control over spending meant spending was recorded in a way that was “not business-friendly.”
The firm’s housing arrangements are not unusual, especially in high-cost areas, but Ray’s filing notes that “certain properties are named after employees personally.” With this consultant, it was an unusual arrangement.
A few days ago, a penthouse in the same private complex where Bankman-Fried and other FTX operators live was listed for about $40 million. It was widely reported that the apartment belonged to the one-time billionaire and FTX founder.
In the same filing, Wray criticized the former executive team’s “total lack of financial control,” claiming he doesn’t trust FTX Corporation’s balance sheet.
Prager Metis conducted an audit of one of FTX’s verticals (which Ray calls a “silo”), a company “I don’t know.”
Sam Bankman-Fried could not immediately be reached for comment.
Ray, who oversaw Enron’s bankruptcy and reorganization proceedings, claims to have 40 years of experience in the bankruptcy and corporate fields.
“The debtor does not have an accounting department,” Wray wrote, adding that he expected it would “take some time” to produce reliable financial statements.
FTX and its affiliates, including Alameda Research, Bankman-Fried’s cryptocurrency trading arm, filed for Chapter 11 bankruptcy protection earlier this month.
New FTX CEO: Never seen ‘such a total failure of control of the company’
FTX’s newly appointed CEO, John Wray III, was quite outspoken in a filing with Delaware bankruptcy court, claiming that “in his 40 years of legal and restructuring experience” he had never seen “such a thorough failed” corporate control, there is no reliable financial information here. ”
Wray served as CEO of Enron after the energy giant collapsed. He promised to work with regulators to investigate FTX founder Sam Bankman-Fried.
In the filing, Ray disclosed that he has “no confidence” in the accuracy of the balance sheets of FTX and sister company Alameda Research because “there is no audit and manufacturing, whereas FTX debtors are audited by Bankman-Fried Controls.”
This document is Ray’s statement regarding his new role as CEO of FTX and its affiliates. They both filed for bankruptcy last week, sending the cryptocurrency world into shambles and taking investors by surprise.
Ray criticized Bankman-Fried and his management team for lacking tight control over systems and compliance.
“The concentration of control in the hands of a very small number of inexperienced, insensitive, and potentially vulnerable individuals is unprecedented.”
Ray said a “substantial portion” of assets held by FTX could be “lost or stolen” after social media reported that hundreds of millions of cryptocurrencies had been stolen.
Working with regulators, the Chapter 11 bankruptcy proceedings will examine Bankman-Fried’s actions related to the FTX debacle.
Worryingly, Wray writes that part of his responsibilities will include implementing basic corporate standards and controls such as “accounting, auditing, cash management, cybersecurity, resource human resources, risk management, data protection and other non-existent or a non-existent system” to an appropriate degree, prior to my appointment. ”
Bankman-Fried and FTX had “administrative measures, such as the use of insecure group email accounts as root users to access confidential private keys and extremely sensitive data of FTX Group companies.” to conceal the misuse of client funds. ”
Sophisticated software was likewise used to hide the location of mislabeled and fraudulent customers during the collapse of Bernie Madoff’s Ponzi scheme in 2008.
FTX is currently committed to accurately reporting cash and cryptocurrencies. Ray said it would be inappropriate “for parties or courts to use the audited financial statements as a reliable basis for FTX’s financial position.”
How to deal with SOL after drama FTX?
Following the FTX incident, Solana’s relationship with Sam-Bankman Fried caused the altcoin to lose over 60% of its value in just a few days. As a result, SOL broke below the key $27-30 range and entered an area of relatively low liquidity.
Funding rates for SOL suggest a slight easing of the selling pressure that has been high for the past few days. At press time, SOL was trading at $13.6, down more than 3.7% over the past 24 hours.
SOL’s drop from the $27 mark sparked a sharp pullback, a move that supported sellers to retest the $12.8 baseline over the past week.
Meanwhile, SOL’s southward trajectory formed a bearish pennant structure on the daily bar chart. While the bulls are trying to prevent the downtrend from being broken due to high volatility, they must defend the $12.8 mark to prevent a decline.
If buyers stop the price slide at immediate support, SOL could gather some momentum to test the $17 area in the coming sessions.
But judging by the broader market uncertainty, altcoins may continue to fall. An immediate or eventual break below the $12.8 level could be a bearish signal.
The relative strength index (RSI) has been hovering in oversold territory for almost a week. A logical reversal in this area could help buyers ease selling pressure. Furthermore, the 24-hour loss on the SOL chart was accompanied by a corresponding drop in trading volume. This makes SOL’s position even more fragile and vulnerable to reversal.
According to data from Coinglass, SOL funding rates on all exchanges have been negative for more than 24 hours. While it marks some improvement, buyers should wait for a positive close on most exchanges to gauge the altcoin’s chances of recovery.
Potential targets will remain as discussed. Finally, tracking the movement of King Coins can help in making profitable bets.