John Ray, who took over as CEO of cryptocurrency exchange FTX, has described some of the chaotic experiences at the company after filing for bankruptcy.
In testimony on the FTX case before the United States Bankruptcy Court for the District of Delaware on February 6, Ray said he and other professionals had “carefully” conducted an investigation into FTX’s activities, as the company had no physical office. The FTX CEO appeared to oppose the request to assign an independent examiner to the bankruptcy case, claiming that “inadvertent errors” could result in the destruction of “hundreds of millions of dollars of value.”
According to Ray, when he took control of FTX in November 2022, there was “not a single listing of anything” related to bank accounts, income, insurance, or personnel, sparking a “massive information scramble.” The FTX CEO said that on the same day he helped file a Chapter 11 bankruptcy petition, and there were multiple attempts to steal crypto, prompting security experts and liquidators to move quickly to secure the funds.
“Your normal first day request is chaotic as can sometimes be – this was something I’ve never experienced before,” Ray said. “Those hacks lasted practically all night […] It was truly 48 hours of what I can only describe as hell.”
The FTX CEO said he had no relationship with former FTX executives, including Alameda Research CEO Caroline Ellison, FTX co-founder Gary Wang, and former CEO Sam Bankman-Fried, nor with FTX’s CEO. their parents before taking control of the company. According to Ray, anyone “who was in a position of control” under Bankman-Fried no longer had any authority to direct the actions of the FTX company.
Ray’s testimony came amid a motion by the US Trustee’s Office arguing that the court should appoint an independent examiner to issue a public report that would bring transparency to bankruptcy proceedings. JJuliet Sarkessian, representative of the US Trustee’s Office, suggested that although Ray had no relationship with Bankman-Fried prior to taking over as CEO, the appointment of an examiner was still in the public interest.
FTX’s bankruptcy proceedings are ongoing as debtors and interested parties will file motions over the company’s assets, investigate the company and disclose information that could affect the Bankman-Fried criminal case. The legal team representing the FTX debtors requested the issuance of subpoenas to obtain information and documents from Bankman-Fried’s immediate family on February 1.
As of press time, Judge John Dorsey had not ruled on an examiner’s request. This story is in development and may be updated.
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