John Ray, who took over as CEO of crypto change FTX amid chapter proceedings, has offered detailed written testimony forward of his Dec. 13 look earlier than america Home Monetary Companies Committee.
In testimony made accessible for the “Investigating the Collapse of FTX, Half I” listening to, Ray reiterated lots of the claims made in chapter courtroom, saying the collapse of the collapse was due partly to “absolutely the focus of management within the palms of a really small group of grossly inexperienced and unsophisticated people.” Ray, who oversaw the liquidation of power firm Enron in the course of the early 2000s, added that the management at FTX had “didn’t implement just about any of the programs or controls” mandatory to guard shopper belongings.
“By no means in my profession have I seen such an utter failure of company controls at each degree of a corporation, from the shortage of economic statements to an entire failure of any inside controls or governance by any means,” mentioned Ray.
The FTX CEO additionally countered claims by his predecessor, Sam Bankman-Fried, scheduled to seem just about on the identical listening to. Bankman-Fried has mentioned in lots of interviews following the change’s chapter submitting that FTX US — the derivatives change beneath FTX Group — was probably solvent and able to making customers entire beneath sure circumstances.
Nonetheless, based on Ray’s written assertion, “FTX US was not operated independently of FTX.com” and a Chapter 11 submitting was essential to keep away from a financial institution run:
“For the reason that time of the submitting, I’ve develop into much more assured this was the proper resolution, because the books and data points at FTX US and the numerous relationships between FTX US and the opposite FTX Group corporations develop into clearer.”
The FTX CEO mentioned on Nov. 16 that Bankman-Fried “has no ongoing position” on the agency or its subsidiaries, and “doesn’t converse on their behalf.” SBF has continued to offer interviews detailing his position within the occasions main as much as the change’s downfall as a part of an ‘apology tour’.
Ray’s breakdown of the occasions main as much as the chapter submitting included buyer belongings from FTX “commingled” with belongings from Alameda Analysis, with the hedge fund utilizing mentioned belongings for margin buying and selling and exposing clients to “to large losses.” As well as, FTX Group went on a “spending binge” from 2021 to 2022, buying corporations and making investments ofroughly $5 billion.
Associated: SBF misses the Senate listening to however guarantees to testify to the Home: Regulation Decoded
The Home committee listening to would be the second exploring the collapse of FTX following a Dec. 1 listening to of the Senate Agriculture Committee, through which Commodity Futures Buying and selling Fee chair Rostin Behnam was the only real witness. The Senate Banking Committee has additionally scheduled a listening to for Dec. 14, with Hollywood star Ben McKenzie, investor Kevin O’Leary, regulation professor Hilary Allen, and Jennifer Schulp, the director of economic regulation research on the Cato Institute’s Heart for Financial and Monetary Options, showing as witnesses.