FTX Exchange, following the collapse of its enterprise, has filed its first day declaration in chapter court docket citing a “complete failure of corporate controls,” per a court filing.
John J. Ray III, the newly appointed CEO of FTX Exchange, addressed the various points going through FTX Exchange and the dearth of management exhibited by Sam Bankman-Fried and different executives beforehand answerable for the corporate.
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” stated Ray. “From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”
Ray additionally defined that he has over 40 years of expertise in restructuring corporations, resembling what is wanted for FTX. His phrases lower a bit deeper when one realizes somebody with that stage of expertise has by no means witnessed “failure” at this stage.
The declaration spells out 5 core goals that the brand new management staff has so as to get issues transferring in the appropriate course: implementation of controls, asset safety and restoration, transparency and investigation, effectivity and coordination, and maximization of worth.
Additionally, Ray expressed his considerations for at present accessible audited monetary statements. Prager Metis, the audit agency for stated documentation, is listed because the “first-ever CPA firm to officially open its Metaverse headquarters in the metaverse platform Decentraland.”
The new CEO of FTX defined that he didn’t know something about this auditing agency and said “As a practical matter, I do not believe it appropriate for stakeholders or the Court to rely on the audited financial statements as a reliable indication of the financial circumstances of these Silos.”
Furthermore, Ray expressed the improper use of FTX funds “to purchase homes and other personal items for employees and advisors.”