John Ray Refutes Sam Bankman-Fried’s Contention Regarding FTX Solvency

FTX CEO John Ray dismissed Sam Bankman-claim Fried’s that FTX US has enough segregated cash on hand to resume user withdrawals.

In a prepared statement ahead of his hearing tomorrow before the House Financial Services Committee, the CEO outlined the fundamental structural faults that led to the multibillion-dollar empire’s demise early last month.

Questions have been raised as to why all of the FTX Group companies were included in the Chapter 11 filing, particularly FTX US. The answer is because FTX US was not operated independently of FTX.com.

John Ray also highlighted a succession of issues surrounding FTX’s connection with Alameda Research that contributed to the company’s collapse, saying that Customer assets from FTX.com were commingled with assets from the Alameda trading platform while noting that senior management faced no controls on access to private keys

Other issues plaguing that relationship were Alameda’s risky margin trading and unrestricted borrowing from FTX’s deposits; FTX’s wave of investments and loans to insiders at FTX and Alameda; and the fact that Alameda’s market-making left customer assets on outside exchanges around the world.

Ray said in the statement

Besides, Ray refused to discuss a certain number of topics, including his conversations with Bankman-Fried and ongoing legal processes, as well as inquiries by US law enforcement.

Find out more information about Sam Bankman-fried Trial Live at Coincu.

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