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Some of FTX’s affiliates may have used corporate funds to buy homes, its new CEO has claimed.
“There does not appear to be documentation for certain of these transactions as loans,” John J. Ray wrote.
Ray made the claim in a scathing declaration submitted as part of FTX’s bankruptcy filings.
FTX’s new CEO claims that some of its affiliates may have used corporate funds to buy homes for employees and advisors.
John J. Ray, who was announced as the company’s new CEO on Friday after cofounder Sam Bankman-Fried resigned, made the claims in a declaration submitted as part of FTX’s Chapter 11 bankruptcy filings and published Thursday.
“In the Bahamas, I understand that corporate funds of the FTX Group were used to purchase homes and other personal items for employees and advisors,” Ray wrote.
“I understand that there does not appear to be documentation for certain of these transactions as loans, and that certain real estate was recorded in the personal name of these employees and advisors on the records of the Bahamas.”
Bankman-Fried and other FTX employees including CTO Gary Wang and director of engineering Nishad Singh all lived together in a penthouse in the Bahamas.
Ray’s declaration also said that FTX “did not have the type of disbursement controls that I believe are appropriate for a business enterprise.”
He said that employees submitted payment requests through an on-line chat platform “where a disparate group of supervisors approved disbursements by responding with personalized emojis.”
After CoinDesk reported that most of the assets of Alameda Research, a trading firm set up by Bankman-Fried, were tied up in FTT, FTX’s in-house token, Binance announced that it would sell it holdings. Other traders quickly scrambled to withdraw their own holdings from FTX.
FTX, Bankman-Fried’s trading firm Alameda Research, and roughly 130 affiliated companies have begun Chapter 11 bankruptcy proceedings.
In the declaration, Ray also cited FTX’s “inexperienced” execs, auto-deleting messages, and “a complete failure of corporate controls.”
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Source:: Business Insider