FTX’s lawyer said in court on Tuesday that the bankruptcy cryptocurrency The exchange said that a “significant amount” of FTX’s assets were lost and may have been stolen, as the surge in client deposits and liquidity crunch sparked a leadership crisis and plunged the firm into collapse.
“FTX’s Previous Team Were Inexperienced and Non-Experts”
James Bromley, attorney for FTX’s new administration, said in his first hearing in Delaware bankruptcy court after the bankrupt exchange filed its largest ever crypto bankruptcy case earlier this month, “FTX was under the control of inexperienced and unprofessional individuals, and some or all of them were security threats.” said.
In court, Bromley recounted some of the events that led to the company’s sudden collapse, alleging major faults in the former management under co-founder Sam Bankman-Fried.
FTX’s new management appeared in U.S. Bankruptcy Court for the first time on Tuesday at the start of a long, complex and unprecedented Chapter 11 lawsuit.
Bromley says, “There’s a world-class, international organization here, but it’s run as Sam Bankman-Fried’s personal kingdom.” said.
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Bromley said FTX’s new management and advisors have implemented market-standard controls for the firm’s accounting, auditing, cash management, human resources, risk management and data management systems.
He described the collapse of FTX as “one of the most sudden and difficult collapses in American corporate history and in the history of corporate organizations worldwide.”
Bromley said FTX also “suffers from ongoing cyberattacks” that occurred in the days following the Chapter 11 bankruptcy filing, the day the firm filed for bankruptcy.
He said the company’s Department of Justice and the US law firm in New York were in “constant communication” with the cybercrime unit, which was launching a criminal investigation.
*Not investment advice.