New FTX CEO accuses Sam Bankman-Fried of negligence

Speaking at a court hearing on Thursday, November 17, the new CEO of FTX, John Ray, sharply criticized the failures of the previous administration of the cryptocurrency exchange and the management style of the former CEO, Sam Bankman-Fried.

The first hearing on the FTX bankruptcy proceedings was held in the Delaware court. The exchange’s new CEO, John Ray, said that since his appointment on November 11, he has been working around the clock with experts from Alvarez & Marsal, Sullivan & Cromwell, Nardello & Co. The work was complicated by responding to numerous regulatory inquiries, deciphering accounting records, and preparing documentation for litigation.

«I have over 40 years of professional experience. I was the principal investigator for the Enron, Residential Capital, Nortel and Overseas bankruptcies. Almost every situation I have been involved in has been characterized by failures in internal controls, regulatory compliance, staffing, and system integrity. However, never in my career have I seen such a massive failure of corporate controls and a complete lack of truthful financial information as I have seen at FTX,» said Ray.

The new FTX CEO went on to explain that this isan «unprecedented situation» in which the blame lies with Sam Bankman-Fried and his team — «a small group of inexperienced and potentially compromised individuals.»

According to the preliminary findings, the company lacked a framework for implementing controls over accounting, auditing, cash management, cybersecurity, human resources, data protection risks, and other business-critical systems. John Ray suggested that a significant portion of FTX’s assets may have been stolen. He also asked the court to conduct an open investigation into his claims against Sam Bankman-Fried.

As a reminder, American cryptocurrency investors have filed a lawsuit against the founder of the FTX exchange, Sam Bankman-Fried, as well as several celebrities who promoted the crypto exchange. The plaintiffs claim to have suffered from a Ponzi scheme.