Bankruptcy expert John Ray, who took over as CEO when FTX filed for bankruptcy, said this was unprecedented.
The new CEO of FTX John Ray has claimed in a US court that there was a mismanagement of the administration. management by Sam Bankman-Fried.
In the biggest crypto blowup in history to date, FTX filed for bankruptcy protection in the United States last Friday after traders pulled $6bn from the platform in three days and rival Binance pulled out of the rescue operation.
“I have never seen the complete failure of corporate governance and the lack of reliable financial information that has occurred here,” Ray said in Thursday’s filing, which was filed in bankruptcy court for the District of Delaware.
“From compromised integrity and mismanagement of the administration in the hands of a small group of inexperienced, uneducated and who may be confused, this has never happened,” Ray added in a post.
Bankruptcy expert Ray, who took over from Bankman-Fried as CEO when FTX filed for bankruptcy on Friday, did not name any outside regulators in the 30-page filing.
FTX founder Bankman-Fried did not immediately respond to a request for comment on the grounds in the filing.
In the post, Ray also claimed that Bankman-Fried had made “false and misleading public comments”, based on an exchange with a reporter on Twitter.
Vox on Wednesday published an interview with Bankman-Fried in which she said she regretted her decision to file for bankruptcy and criticized regulators.
He later tried to put out the fire, saying that the basis of the conversation was an exchange of messages that should not have been disclosed.
Bankman-Fried said he grew his business too quickly and failed to recognize problems with the exchange, the New York Times reported earlier this week.
“If I could have focused more on what I was doing, I could have done better,” Bankman-Fried told reporters.
A ‘wrong’ belief
The effects of FTX’s collapse were felt around the world, Singapore-based investor Temasek Holdings, FTX’s investor, reported Bankman-Fried on Thursday in a statement in which it said it would write down the value of all its shares. $275m.
“It is clear from these facts that perhaps our faith in the performance, judgment and leadership of Sam Bankman-Fried … seems to have been misplaced,” Temasek said.
Other investors including Softbank Group Corp’s Vision Fund and Sequoia Capital have also written down their stakes to zero, as FTX’s bankruptcy woes continue to reverberate around the world.
Major crypto player Genesis Global Capital has suspended customer redemptions at its mortgage business on Wednesday, in response to “significant market volatility and loss of corporate confidence due to the FTX implosion”.
Financial and market officials around the world reacted to the failure of FTX, with Singapore’s finance minister saying on Thursday that its collapse had raised “significant allegations of fraud”.
While Indonesia ordered crypto exchanges to stop selling FTX tokens, Brazilian crypto advocates are pointing to FTX as they urge lawmakers to give final approval to a bill to strengthen oversight of the cryptocurrency market.