John J. Ray III, the new CEO of bankrupt cryptocurrency exchange FTX, and his team presented the first detailed report on the exchange’s failures.
The new team of FTX, which carries out the restructuring processes after the bankruptcy, went to court on April 9 regarding the control errors made by the stock market before it went bankrupt. 45 pages submitted a detailed report. The company is like run like an “amateur rock band” Explaining it with sarcastic expressions, Ray said that FTX’s in administrative controls claimed to have identified extensive shortcomings.
In the presented report, this company, which is global and manages billions of dollars, several Google Drive documents And with Excel table emphasis was placed on management. On the other hand, it has been designed for small and medium-sized businesses, not for a company operating in more than one continent and platform in the financial and administrative flow of the company since its establishment. QuickBooks Another scandal was signed by using the app.
Inexperience and serious security vulnerability
According to the report, which includes the statements of CEO John Ray, FTX, Google Workspace And 1Password in areas with billions of dollars of critical corporate information, including didn’t even use two factor authentication. CEO, co-founders Sam Bankman-Fried And Gary Wang Former engineering director Nishad Sing’He emphasized that despite their very limited experience, they have the final say in all important decisions. Chaos of inexperience The environment was detailed with the following statements:
Fresh out of college and with no experience in managing risk or running a business, these three controlled nearly every important aspect of FTX Group. If either Wang or Sing were hit by a bus, the entire company would be finished.
Sanctions were imposed on those who objected.
However, those who noticed these mistakes in the process and objected to the senior officials, especially the SBF. Brett Harrison, former US President of FTX it happened. According to the information transferred between the lines of the statement, this preliminary warning of Harrison was received negatively within the company. Even this “things are risky” his speech received such a reaction that Harrison’s big cuts in bonus, threatened and company lawyers SBF asked to apologize.
The report said the company was sponsored by the company after another employee in the exchange’s legal department expressed concerns about Alameda’s lack of enterprise and risk management. dismissed from his job specified. As it can be understood, FTX and Alameda were involved in this whole process. to the delusion of power caught up and ignoring reality continued on his way.
On the other hand, Nishad Sing changed the code base with a transaction he made in 2019. Allow Alameda to withdraw unlimited cryptocurrencies from FTX allowed the opportunity. Sing performs the basic algorithm as little as 1 week after the procedure. to exempt Alameda from automatic liquidation. A significant portion of FTX assets began to be kept on hot wallets.
FTX creditors so far from $1.4 billion was able to maintain control of a little too many assets and will be taken $1.7 billion more determined. Accordingly, against the creditors of FTX in total 12 billion dollars has an obligation.