FTX was an 'utter failure of corporate controls at every level of an organization', says CEO
John Ray, who took over as CEO of crypto exchange FTX amid bankruptcy proceedings, has written detailed testimony in preparation for his appearance before the United States House Financial Services Committee.
In testimony made available for the ‘Investigating the Collapse of FTX, Part I’ hearing on Dec. 13, Ray reiterated many of the claims made in bankruptcy court, saying the collapse of the collapse was due in part to “the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals.” Ray, who oversaw the liquidation of energy company Enron during the early 2000s, added that the leadership at FTX had “failed to implement virtually any of the systems or controls” necessary to protect consumer assets.
“Never in my career have I seen such an utter failure of corporate controls at every level of an organization, from the lack of financial statements to a complete failure of any internal controls or governance whatsoever,” said Ray.
The FTX CEO also countered claims by his predecessor Sam Bankman-Fried, scheduled to appear virtually at the same hearing. Bankman-Fried has said in many interviews following the exchange’s bankruptcy filing that FTX US — the derivatives exchange under FTX Group — was likely solvent and capable of making users whole under certain circumstances.
However, according to Ray’s written statement, “FTX US was not operated independently of FTX.com” and a Chapter 11 filing was necessary to avoid a bank run:
The FTX CEO said on Nov. 16 that Bankman-Fried “has no ongoing role” at the firm or its subsidiaries, and “does not speak on their behalf.” SBF has continued to give interviews detailing his role in the events leading up to the exchange’s
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