New FTX CEO Calls the Crypto Exchange’s Corporate Control a ‘Complete Failure’ – The New York Times

    Alameda’s quarterly financial statements were never audited, he said. But according to financial information in the filing, Alameda made loans totaling about $3.3 billion to Mr. Bankman-Fried and an entity he controls, and about $600 million to two other FTX executives, Nishad Singh and Ryan Salame.

    Since he took over last week, Mr. Ray said, his team has secured about $740 million worth of cryptocurrency belonging to various parts of FTX’s business. But he called that sum “only a fraction” of what he hopes to recover, saying the company has hired forensic analysts and blockchain experts to assist in locating any remaining funds. The run on FTX left the company owing an estimated $8 billion, according to people familiar with the matter.

    In Mr. Ray’s telling, the mismanagement permeated the entire company.

    Mr. Ray said FTX’s human resources department was so disorganized that his team had been unable to prepare a complete list of who worked at FTX. And he said corporate funds had been used to buy homes and other personal items for employees and advisers, without proper documentation. Employees would make payment requests through a chat portal, where supervisors approved disbursements using “personalized emojis,” the filing said.

    According to the filing, FTX lacked lasting records of corporate decisions, partly because Mr. Bankman-Fried relied on communications platforms that were set to automatically delete messages after a short time and encouraged employees to use the same applications.

    Mr. Ray, 63, took over FTX last Friday. A veteran of several famous corporate implosions, he has a reputation as something of a turnaround artist — an executive who specializes in making the most of distressed situations. He’s best known for serving as Enron’s chief executive during its bankruptcy and has been involved in a number of other prominent corporate restructurings, earning praise for his dogged efforts to recover funds for creditors.

    The collapse of FTX was a shocking fall for Mr. Bankman-Fried, who was widely considered one of the most reliable figures in the freewheeling, loosely regulated crypto industry.

    Once worth as much as $24 billion, Mr. Bankman-Fried became a frequent presence in the halls of Congress, where he testified about the future of the crypto industry and tried to shape legislation governing the industry. He rubbed shoulders with famous actors and athletes, once appearing onstage at a conference in the Bahamas with former President Bill Clinton and Tony Blair, the former British prime minister. He was also a prolific and much-sought-after political donor, contributing more than $5 million to President Biden’s 2020 election effort.

    This content was originally published here.

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