New bankruptcy filings, first reported by CNBC, show that FTX Corp. funds were used to buy homes in the Bahamas, among other personal items. The details come less than a week after the now-popular crypto exchange filed for bankruptcy — a decision founder and former CEO Sam Bankman-Fried says he regrets.
FTX’s new CEO, John J. Ray III, a veteran of the downwind Enron, said in the filing that he had “never seen such a complete failure of corporate control and such a complete lack of reliable financial information as occurred here.”
“From the compromised integrity of the systems and the mismanagement of control abroad, to the concentration of control in the hands of very inexperienced, unsophisticated and vulnerable individuals, this situation is unprecedented,” Ray said in the filing.
The document states that FTX Group used corporate funds to buy houses and other personal items for employees and consultants. Ray added that “certain real estate” was registered in the personal names of employees and consultants, and that “documents such as mortgages do not appear to exist for some of these transactions.”
The newly installed CEO has made it clear that he is not responsible for the financial mishandling of all FTX employees. “While the investigation has yet to lead the way, it is my view that many employees of the FTX Group, including some senior executives, were unaware of the deficiencies and potential, based on the information available to date. Integrating digital assets.” If it’s not clear if that lack of liability extends to real estate transactions.
He added that current and former employees are some of the people most affected by FTX and “these are many of the same people and their work will be important to maximize value for all stakeholders going forward.”
FTX’s decline began last week after Binance backed out of its deal to acquire the crypto exchange due to due diligence. News reports alleged that FTX was mishandling funds and that the company had filed for bankruptcy shortly after being investigated.
Bankman-Fried, meanwhile, said he still hopes to raise an $8 billion lifeline for the company.
“Everybody goes out of their way to pretend that perception reflects reality, but it doesn’t,” Banman-Fried said in a Twitter chat with Vox reporter Kelsey Piper earlier this week. “Some of the greatest heroes of this decade will never be recognized, and some of the most beloved people are basically imposters.”