- A new report from FTX’s new management gave an insight into the corporate failures under Sam Bankman-Fried.
- The former CEO reportedly lost track of millions of dollars worth of crypto assets and then joked about it with his colleagues.
- New CEO John Ray III stated that the exchange’s collapse was a result of hubris, incompetence, and greed.
The new management of FTX recently published a report which took a closer look at the control failures at the now-defunct crypto exchange under the leadership of founder and former CEO Sam Bankman-Fried. The report was compiled after interviewing several former employees of the exchange as well as a comprehensive review of the electronic data, communications, and documents related to the platform.
Sam Bankman-Fried stifled dissent, commingled corporate and customer funds
According to the report, which was filed in the U.S Bankruptcy Court for the District of Delaware, the shortcomings in FTX’s management and their governance were attributed to Sam Bankman-Fried and his top management team for the exchange which included former Chief Technology Officer Gary Wang and head of Engineering Nishad Singh. The trio reportedly operated in a tight-knit group. Current CEO John Ray stated that “hubris, incompetence, and greed” led to the collapse of FTX.
“We are releasing the first report in the spirit of transparency that we promised since the beginning of the Chapter 11 process. In this report, we provide details on our findings that FTX Group failed to implement appropriate controls in areas that were critical for safeguarding cash and crypto assets.”
FTX CEO John Ray III
The lack of record keeping at the exchange reportedly led to a considerable amount of chaos on the day that FTX filed for Chapter 11 bankruptcy when the crypto exchange couldn’t even come up with a complete record of its employees. The 45-page report highlighted several cases of gross negligence on the part of the former CEO. This included the 56 entities within the FTX Group, which allegedly didn’t provide financial statements of any kind. Internal communications revealed that Sam Bankman-Fried once joked about losing track of $50 million worth of crypto assets at sister firm Alameda Research.