Last year, Sam Bankman Friend’s FTX empire collapsed sending the entire crypto market plummeting. Since then, a series of discoveries have been reported with the recent update disclosing the amount owed to customers.
According to the report, FTX owes customers $8.7 billion after misappropriating and misusing customers’ deposits. This was concealed by senior executives as early as August 2022. A report filed on Monday reveals that about $6.4 billion owed customers is in fiats and stablecoins, all misappropriated. Interestingly, it is reported that these were not done by accident
John J. Ray III is the CEO trying to recover the money for creditors. He explained that:
The image that the FTX Group sought to portray as the customer-focused leader of the digital age was a mirage. From the inception of the FTX.com exchange, the FTX Group commingled customer deposits and corporate funds, and misused them with abandon at the direction and by the design of previous senior executives.
According to Ray III, FTX has so far recovered $7 billion in liquid assets as they continue to search for the rest. The FTX debtors have in a second interim report stated that the company concealed its actions with the help of the FTX Group attorney.
More Details on the FTX Story
Bankman-Fried is facing several criminal charges and is set to appear in New York for trial in October. Also, there are ongoing bankruptcy proceedings in Delaware. On Feb. 9, 2022, SBF reportedly gave false testimony to senators in a hearing concerning FTX’s practices to protect consumers and their money
According to Ray’s report, Caroline Ellison, the former CEO of FTX’s trading affiliate Alameda Research, had prior knowledge about the company’s financial situation. In addition, it continuously provided false information to its banking partners concerning how it was using accounts. The report further discloses that a former employee of Alameda informed the bankruptcy team that no meaningful distinction was made between the customers’ funds and Alameda’s funds.
The debtors initially released a first report that identifies and discusses control failures by the FTX Group’s previous management team. This includes “management and governance, finance and accounting, digital asset management, information security, and cybersecurity.” The third report is expected to be published by August 2023
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FTX Bankruptcy Scandal Deepens: Customers Owed $8.7B as Senior _utives Concealed Misuse of Funds, Says Report
Last year, Sam Bankman Friend’s FTX empire collapsed sending the entire crypto market plummeting. Since then, a series of discoveries have been reported with the recent update disclosing the amount owed to customers.
According to the report, FTX owes customers $8.7 billion after misappropriating and misusing customers’ deposits. This was concealed by senior executives as early as August 2022. A report filed on Monday reveals that about $6.4 billion owed customers is in fiats and stablecoins, all misappropriated. Interestingly, it is reported that these were not done by accident
John J. Ray III is the CEO trying to recover the money for creditors. He explained that:
According to Ray III, FTX has so far recovered $7 billion in liquid assets as they continue to search for the rest. The FTX debtors have in a second interim report stated that the company concealed its actions with the help of the FTX Group attorney.
More Details on the FTX Story
Bankman-Fried is facing several criminal charges and is set to appear in New York for trial in October. Also, there are ongoing bankruptcy proceedings in Delaware. On Feb. 9, 2022, SBF reportedly gave false testimony to senators in a hearing concerning FTX’s practices to protect consumers and their money
According to Ray’s report, Caroline Ellison, the former CEO of FTX’s trading affiliate Alameda Research, had prior knowledge about the company’s financial situation. In addition, it continuously provided false information to its banking partners concerning how it was using accounts. The report further discloses that a former employee of Alameda informed the bankruptcy team that no meaningful distinction was made between the customers’ funds and Alameda’s funds.
The debtors initially released a first report that identifies and discusses control failures by the FTX Group’s previous management team. This includes “management and governance, finance and accounting, digital asset management, information security, and cybersecurity.” The third report is expected to be published by August 2023