FTX CEO John Ray has testified before the U.S House Committee on Financial Services
John Ray criticized former CEO Sam Bankman-Fried for his unacceptable business practices.
The new management has recovered over $1 billion of the lost funds.
Sam Bankman-Fried has blamed John Ray and his team for jeopardizing the funds of FTX US customers.
John Ray III, the current CEO of the bankrupt crypto exchange FTX, testified before the U.S House Committee on Financial Services earlier today. This much anticipated congressional hearing was originally meant to feature former CEO Sam Bankman-Fried as well, but given that he is currently under arrest in The Bahamas, Mr. Ray has given lawmakers and creditors some key insights into the controversial business activities that transpired at what was once the world’s second-largest crypto exchange.
Unacceptable management practices at FTX
According to John Ray, FTX had “unacceptable management practices” which ultimately led to its collapse. The current CEO revealed that there was literally no record keeping within the company whatsoever. The man who was brought in to clean up the controversial Enron scandal, testified that he had never seen such an utter lack of record keeping at a company.
The owners, business, and senior management had virtual control of all the accounts and could move money or assets as they desired, undetected by customers.” John Ray stated.
As for the funds lost due to the poor management that went on with FTX and Alameda Research, Mr. Ray stated that the funds lost were in excess of $7 billion. He added that his team had successfully recovered more than $1 billion of those funds. John Ray has estimated that it will take several months to secure the bankrupt exchange’s assets. The lack of proper financial records will be a major hindrance in this process. “‘I don’t trust a single piece of paper at this organization,” he added.
Sam Bankman-Fried’s congressional testimony
The former CEO was also expected to testify before the congressional committee. The testimony was canceled following his arrest by Bahamian authorities last night. However, a transcript of his intended testimony was published by Forbes earlier today.
According to SBF’s testimony, “American customers were protected, at least until Mr. Ray’s team took over.” The document further reveals that FTX US had separate order books and funds from the parent company. Sam Bankman-Fried was confident that the customers of the American subsidiary could be made whole immediately since FTX US is still solvent.