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FTX’s New CEO Says Crypto Exchange Suffered ‘Complete Failure of Corporate Controls’

The new CEO of embattled crypto exchange FTX helped manage one of the most infamous financial collapses in the last several decades, but called the situation at FTX a failure like he’s never before seen in a bankruptcy court filing Thursday. FTX, the second-largest cryptocurrency exchange, filed for bankruptcy on Friday after a rival exchange, Binance, backed out a deal to acquire it. Former FTX CEO Sam Bankman-Fried resigned and is said to be in the Bahamas.

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” FTX’s new CEO John J. Ray III, wrote in the bankruptcy court filing. 

“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” Ray wrote. Ray previously took control of Enron during its scandal and bankruptcy in the early 2000s.

It will now be Ray’s task to guide the company through the bankruptcy process and the investigations into the company. It was reported that FTX also experienced a possible hack in which hundreds of millions of dollars in cryptocurrency apparently vanished. It remains to be seen if FTX customers will receive back the money they deposited with the exchange.

Bankman-Fried, in an interview with Vox published Wednesday, called filing for bankruptcy a mistake and suggested he could have saved FTX if he had maintained control of the company.

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