The new CEO of the crypto exchange FTX stated in court documents that employees would submit expense claims through chat messages, and random managers would approve the claims by responding with emojis.
According to FTX’s bankruptcy filing released on Thursday, new CEO John Ray claimed that employees submitted payment requests to a “disparate group of supervisors,” who would approve expenses “by responding with personalized emojis.”
In his opinion, the Debtors lacked the “appropriate for a business enterprise” disbursement controls, as expressed by Ray.
FTX brought in Ray, a lawyer who had previously led the bankruptcy of energy giant Enron.
On November 11, the stock market submitted a bankruptcy petition.
Ray said this is the worst corporate control failure and unreliable financial reporting I have seen in my entire career.
He made several accusations of mismanagement against FTX executives and former CEO Sam Bankman-Fried, including that they did not keep records of communications when making decisions.
“One of the most pervasive failures of the FTX.com business in particular is the absence of lasting records of decision-making,” Ray said, as quoted in the filing. For his communications, Mr. Bankman-Fried frequently used time-limited apps.
He continued by saying that Bankman-Fried would advocate for all staff members to adopt the same messaging platform.
Ray claimed that FTX “never had board meetings” and that the exchange had made real estate purchases in the Bahamas in the names of individual employees.
He also claimed that FTX did not accurately document its hiring practices. According to his statement, “repeated attempts to locate certain presumed employees to confirm their status have been unsuccessful to date,” it seems possible that some of these workers never actually existed.
Ray singled out Bankman-Fried, saying that he “continues to make erratic and misleading public statements” as the cofounder of the exchange. In particular, he brought up a Vox article in which it was claimed that Bankman-Fried had sent a direct message (DM) to Vox reporter Kelsey Piper in which he said, “fuck regulators,” adding, “they make everything worse.” On the same day FTX filed for bankruptcy on November 11, Bankman-Fried resigned. The trading firm he runs, Alameda Research, along with about 130 of its subsidiaries, have filed for bankruptcy.
Binance, a competitor cryptocurrency exchange, had planned to acquire FTX before its collapse. Nonetheless, it changed its mind, citing issues discovered during due diligence and fears of federal probes into FTX. Both FTX and Bankman-Fried ignored NFT Today’s requests for comment.
Marine Corps Veteran-turned-national-tv-personality Eric Mitchell is a world leading expert in sports media, regularly appearing on the world’s largest outlets from BBC, MSNBC, Fox News, Bloomberg, CNN and more. His signature blend of snark and industry expertise landed him columns at none other than RollingStone, GritDaily, PopWrapped, Disrupt — and most recently — Editor in Chief at NFT Today Magazine. When he’s not making media appearances or running his empire at LifeFlip Media, he can be found entertaining his thousands of loyal followers on social media through his authentic filter-free content.