FTX's bankruptcy filing report is incredible 🚨🚨
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 | John Ray, the new FTX CEO, is the same person who restructured Enron after its scandal. His take on FTX under penalty of perjury - "Never in my career have I seen such a complete failure of corporate controls" The company did not have any cash management system. - Expense reports were approved by emojis over chat - Corporate funds were used to buy real estate and personal items for employees - Loans were issued without keeping any records There is so much going on with the bankruptcy that a $1 Billion (yeah, with a B) personal loan to SBF by Alameda research is just a footnote! I am guessing it was for charity /s One of the worst findings was that there was no record of who made a particular decision. SBF used applications that auto-deleted messages and asked employees to do the same. Just as a reference for how crazy this is, imagine running a 1,000+ employee company on Snapchat. Whatever minimal auditing was done was also done by firms of questionable reputation. (Ray has stated that he has substantial concerns). Audit for FTX(dot)com was done by a firm that stated that they were the first CPA firm to open its Metaverse headquarters in Decentraland. Most of the companies under the FTX umbrella did not have the right form of corporate governance. Some never even had board meetings. The corporate controls were so bad that the bankruptcy firms do not even have the full list of employees. Imagine running a multi-billion dollar company and not knowing which employees work for you! For someone running a crypto firm, they kept no records of their digital assets. We have no idea how much crypto customers have deposited in the platform. SBF and Wang had complete control over the assets and used backdoor software to conceal the misuse of customer funds. The unaudited balance sheet provided as of Sep 30th (before the collapse) for FTX US stated total assets worth $1.36 Billion. If this is accurate, at least FTX US has more than enough to cover at least the fiat deposits (not crypto) of its customers. Only $740M worth of crypto has been identified in cold wallets. There was an unauthorized transfer of $372M + in cryptos on the day the company filed for bankruptcy. Forensic analysts are now trying to find out what happened to the rest of the money. All in all, it does look like SBF knew what he was doing and did everything from not keeping records, auto-deleting messages, and backdoor access to avoid getting caught. This one's going into the history books. [link] [comments] |
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