FTX’s new CEO, John J. Ray III, refuted Sam Bankman-Fried’s argument that FTX.US has enough money to reopen consumer withdrawals and operate independently of FTX.
FTX’s new CEO, John J. Ray III, exposed the big structural flaws that led to the collapse of the multibillion-dollar empire in mid-November 2022 in a written statement, just before appearing tomorrow at a hearing just before the U.S. House of Representatives. United States.
John J. Ray III’s testimony for tomorrow’s House hearing on the collapse of FTX is right here. Ray estimates:
– infrastructure “without safety checks to stop
…redirection [of customer] assets”
– missing paperwork for ~500 FTX investments
– on SBF: https://t.co/tIWtlHWv7U pic.twitter.com/sLeqvC60aI— Brendan Pedersen (@BrendanPedersen) December 12, 2022
As a end result, he mentioned that the former US subsidiary of the exchange FTX.US did not operate independently of FTX, as Sam Bankman-Fried the moment claimed, since when the exchange filed for bankruptcy beneath Chapter eleven of the US bankruptcies, all All FTX organizations are integrated.
Additionally, Mr. John J. Ray III also outlined a variety of concerns associated to FTX’s entanglement with Alameda Research that led to its collapse. A rather surprising detail was shared by him as follows:
“FTX’s client assets are mixed with the assets of the Alameda Research investment fund, without any clear and transparent distinction, and the senior managers of these units are not subject to any controls for access to the private key.”
Other concerns amidst this romantic relationship are Alameda Research’s risky margin trading and limitless lending from FTX’s consumer deposits, the surge in investing and lending inside FTX and Alameda Research.
More notable is the reality that Alameda Research’s market place-generating get the job done has left consumer assets lagging behind on other exchanges, not just FTX. This suggests that consumer money on FTX are scattered all more than the area, without the need of getting tracked at all.
Through the mentioned document, John J. Ray III the moment yet again acknowledged FTX’s full failure of corporate handle at all ranges of the organization, unprecedented in background, which is hampering the method. His get the job done and diagnosis, in particular the incomplete documentation of transactions involving practically 500 investments produced with FTX revenue and assets.
Ultimately, the new FTX CEO dismissed a variety of subjects he would not deal with, like ongoing legal proceedings from quite a few US law enforcement investigations. Meanwhile, Sam Bankman-Fried has been officially confirmed to attend the Dec. 13 hearing with the US House of Representatives, but it will be through remote on the net type for some personalized good reasons.
Former FTX CEO Sam Bankman-Fried says he will testify remotely just before the House committeehttps://t.co/OrTaHIBtlP
— FOX Business (@FoxBusiness) December 12, 2022
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