Never seen 'such a complete failure' of corporate controls, says new FTX CEO who also oversaw Enron bankruptcy

Newly appointed FTX CEO John Ray III minced nary words successful a filing with the U.S. Bankruptcy Court for the District of Delaware, declaring that "in his 40 years of ineligible and restructuring experience," helium had ne'er seen "such a implicit nonaccomplishment of firm controls and specified a implicit lack of trustworthy fiscal accusation arsenic occurred here."

Ray formerly served arsenic the CEO of Enron aft the implosion of the vigor titan. He promised to enactment with regulators to analyse FTX laminitis Sam Bankman-Fried.

In the filing, Ray disclosed that helium did "not person confidence" successful the accuracy of the equilibrium sheets for FTX and its sister institution Alameda Research, penning that they were "unaudited and produced portion the Debtors [FTX] were controlled by Mr. Bankman-Fried."

The papers is simply a declaration from Ray successful his caller relation arsenic CEO of FTX and associated entities, which filed for bankruptcy past week successful an implosion that near the crypto satellite reeling and investors shaken, perchance bereft.

Ray excoriated Bankman-Fried and his absorption squad for what were described arsenic lackadaisical controls connected systems and regulatory compliance.

"The attraction of power successful the hands of a precise tiny radical of inexperienced, unsophisticated and perchance compromised individuals" was unprecedented, the erstwhile Enron betterment brag said.

Ray said a "substantial portion" of assets custodied with FTX whitethorn beryllium "missing oregon stolen," pursuing wide reports connected societal media of the theft of hundreds of millions successful cryptocurrencies.

Coordinating with regulators, Ray wrote, the section 11 bankruptcy process would analyse the actions of Bankman-Fried successful transportation with FTX's collapse.

Alarmingly, Ray wrote that portion of his remit would beryllium to instrumentality controls and basal firm standards specified arsenic "accounting, audit, currency management, cybersecurity, quality resources, hazard management, information extortion and different systems that did not exist, oregon did not beryllium to an due degree, anterior to my appointment."

Bankman-Fried and FTX had "management practices included the usage of an unsecured radical email relationship arsenic the basal idiosyncratic to entree confidential backstage keys and critically delicate information for the FTX Group companies astir the world, the lack of regular reconciliation of positions connected the blockchain, the usage of bundle to conceal the misuse of lawsuit funds."

Sam Bankman-Fried wasn't instantly disposable for comment.

Sophisticated bundle was likewise utilized to conceal mismarked and fraudulent lawsuit positions successful the 2008 illness of Bernie Madoff's Ponzi scheme.

FTX is presently moving to relationship for an close connection of currency and crypto assets. Ray said that it would not beryllium "appropriate for stakeholders oregon the Court to trust connected the audited fiscal statements arsenic a reliable denotation of the fiscal circumstances" of FTX.