With the collapse of crypto exchange FTX, CEO Sam Bankman-Fried stepped down and was replaced by John J. Ray. New FTX CEO John J. Ray blew up the old administration ahead of the Congressional hearing tomorrow. The CEO of FTX acknowledged that SBF is merging assets under its jurisdiction. He also talked about the abuses of the old administration.
“FTX’s collapse was caused by management failures”
cryptocoin.comAs you follow, FTX CEO John J. Ray has come to work to reorganize the falling crypto giant FTX. He will give a speech in Congress about the picture he faced after he took over the administration. Here are the headlines of his speech. Ray explains to lawmakers that the company’s catastrophic collapse was due to the failures of his former management. Meanwhile, FTX’s new CEO has confirmed that SBF will testify, albeit virtually.
In his remarks to the House Financial Services Committee, John Ray largely reiterates his earlier remarks regarding the complete absence of governance under Sam Bankman-Fried’s leadership. In this context, Ray has this to say about the management behind the collapse:
The collapse of the FTX Group is due to the fact that control is concentrated in the hands of a very small group of largely inexperienced and uninformed individuals.
Ray also makes it clear that FTX-US, the exchange’s Americas branch, is part of Chapter 11 as it is not run independently of FTX. Ray notes that filing for bankruptcy helps protect existing assets and prevent a bank run on FTX-US.
Deciphering the background to John J Ray’s FTX crash
John Ray highlights some of the inappropriate management practices that FTX Group has ever found. Among these activities, he mentions the use of computer infrastructure that gives senior management access to systems that store customer assets. It also states that there are no security checks to prevent these entities from redirecting.
The examples of bad management do not end there. Ray says some private keys with access to hundreds of millions of dollars in cryptocurrencies are stored without any effective security measures or even basic encryption. He even notes that Alameda Research, the crypto hedge fund under FTX, has the freedom to borrow funds that are held in FTX and then used for its own trading and investment purposes without any effective limits, rules or limits.
Most notable among the statements of the new FTX CEO is the event of asset consolidation in the FTX empire under the jurisdiction of SBF. Accordingly, Ray states that customer assets in FTX are mixed with assets in Alameda. This shows that two different companies are managed as one company. Sam Bankman-Fried has repeatedly denied this claim in recent interviews. However, it appears that he had access to strong evidence after Ray had sworn in.
Also, the New FTX CEO explains that there is not only mismanagement but also abuses. In this context, Ray says FTXGroup has been on a spending spree from late 2021 to 2022. He talks about a huge expenditure of about 5 billion dollars in this period. He argues that with this, businesses that are many times higher in value are bought and garbage investments are made. It also records over $1 billion in loans and other payments made to internal individuals.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram and YouTube join our channel!
Risk Disclosure: The articles and articles on Kriptokoin.com do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies. You can lose some or all of your money by investing in Bitcoin and cryptocurrencies. Remember that your transfers and transactions are at your own risk and any losses that may occur are your responsibility. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, assets or services in this article.
Disclaimer: Advertisements on Kriptokoin.com are carried out through third-party advertising channels. In addition, Kriptokoin.com also includes sponsored articles and press releases on its site. For this reason, advertising links directed from Kriptokoin.com are on the site completely independent of Kriptokoin.com’s approval, and visits and pop-ups directed by advertising links are the responsibility of the user. The advertisements on Kriptokoin.com and the pages directed by the links in the sponsored articles do not bind Kriptokoin.com in any way.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.