FTX Debtors said on April 9 that it had released a report “identifying and discussing the management failures” of Sam Bankman-Fried and his colleagues as they ran the collapsed cryptocurrency exchange FTX Debtors CEO John Ray said the FTX group was “tightly controlled by a small group of individuals who falsely claimed to manage it responsibly.”
Reviewed over 1 million documents
The FTX Debtors, an organization made up of companies that have filed for bankruptcy protection in the U.S., released a report “identifying and discussing control failures” by Sam Bankman-Fried and his management team. According to the organization, the report is based on information obtained from a review of terabytes of data and more than one million documents. The report is also based on the testimony of 19 former FTX employees.
As explained in the April 9 press release
the report was prepared by experts, including legal, cybersecurity, and blockchain experts. In comments accompanying the release of the report, CEO and Chief Restructuring Officer John Ray stated:
In the spirit of the transparency we have promised since the start of our Chapter 11 proceedings, we are releasing our first report. This report details our findings that the FTX Group failed to implement adequate controls in areas critical to the protection of cash and crypto assets. the FTX Group was tightly controlled by a small group of individuals who falsely claimed to responsibly manage the FTX Group. but in reality showed little interest in establishing oversight or implementing a proper control framework.
Ray also vowed to continue to examine the factors that led to FTX’s failure and to identify and recover “as much value as possible for creditors.”
The first in a series of “What Happened Before the Petition” reports
Prior to the release of its latest report, FTX Debtors had revealed in an earlier presentation that there was a $6.8 billion gap in the overview of the collapsed crypto exchange’s assets and liabilities. At the time, FTX Debtors also stated that it had discovered significant financial and accounting discrepancies.
Meanwhile, the FTX Debtors indicated in a press release that the recently released report would be “the first in a series on pre-petition events and issues preceding the Chapter 11 case.”
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