These are the most shocking results from FTX’s bankruptcy filing

In the aftermath of the collapse of the FTX cryptocurrency exchange, which caused a serious infection in the industry, many shocking revelations were made about the company’s governance and management system.

A detailed review of the company’s bankruptcy filing revealed that “FTX was a slight fund masquerading as a real company.” to me For Fox Correspondent Genevieve Roche-Decter.

FTX agreed to spend with emojis

Part of the 30-page filing revealed that FTX Group did not have a proper payment control system in place. Employees submitted expense requests via online chats while supervisors and managers approved them using custom emojis.

Most decisions were made via conversations, and FTX founder and former CEO Sam Bankman-Fried (SBF) reportedly encouraged employees to use apps that automatically delete messages after a while. Therefore, there are no permanent records of decision making.

FTX did not have a cash management system; Therefore, the company did not know how much cash was available at any given time. The lack of a centralized cash control system means that the company does not have an accurate list of its bank accounts and account signatories. In addition, the exchange did not pay attention to the creditworthiness of its banking partners.

FTX did not properly record users’ deposits

In addition, crypto assets deposited by clients are not recorded on the balance sheet, and in the bankruptcyThe balance of these assets is not reported.

FTX Group companies have stored private keys to clients’ assets in an insecure mass email account. The company also used “software to hide the misuse of client funds.”

deeper analysis open that the company’s digital assets were controlled by SBF and co-founder Gary Wang.

FTX has not held board meetings

Most of the FTX Group’s units, particularly those in Antigua and the Bahamas, have inadequate governance structures. It is worth noting that most of them did not hold any board meetings.

The rival empire also did not have a proper history of its personnel. Both employees and contractors did not have clear records of work duration and responsibilities. Attempts to compile a list of all employees failed as many could not be located.

FTX administrators waste users’ money

Interestingly, company funds were used to acquire residences and personal property of some senior employees without proper documentation. The properties were also purchased in the names of the employees.

Loans to related parties of sister company Alameda Research consisted of loans of $1 billion, $543 million and $55 million to SBF and FTX Chief Executive Nishad Singh and Co-CEO Ryan Salame respectively.

previous report as well claimed that SBF pulled $300 million of the $420 million FTX raised in October 2021 during a bull market.

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