On December 13, the US House of Representatives Financial Services Committee released testimony prepared by John Ray, the current CEO of FTX. According to Ray, “a substantial portion” of FTX’s assets remain “missing, embezzled, or unavailable”.
The team is continuing the difficult forensic work to locate all the assets. His new team has purchased more than $1 billion in digital assets to date, though that’s only a fraction of the billions of dollars that FTX owes to customers and other creditors.
FTX US does not operate independently of its parent company FTX.com, so filing for bankruptcy protection for FTX US is necessary. He also said that FTX lacks security controls that allow Alameda to borrow money from FTX “without any effective restrictions”, lacks reliable financial reporting, and lacks independent governance.
The new FTX CEO also confirmed that FTX has spent about $5 billion on various investments and acquisitions, and made another $1 billion in loans and other payments to insiders.
John Ray said that while the investigation is still ongoing, the failure of FTX appears to be rooted in the concentration of control in the hands of a small number of inexperienced individuals with little internal control.
As updated in previous Coincu News articles, Former FTX CEO, Sam Bankman-Fried (SBF) is the man who is said to be behind it all and he is largely responsible for the collapse of FTX, was arrested in the Bahamas yesterday after receiving a series of criminal charges from US prosecutors and demanding his extradition to the US.
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