John J Ray III earned $690,000 in two months as CEO of FTX. This might be a dream for the average person, but he swears this was his worst nightmare.
New FTX CEO John Ray III recently appeared in the US Bankruptcy Court for the District of Delaware to share his actions as CEO of the now-defunct cryptocurrency exchange. In his testimony, he revealed the difficulties he faced after assuming the CEO position.
According to Ray, he went through unparalleled chaotic experiences in his previous positions, including the bankruptcy proceedings of Enron and other large corporations. On his first day as interim CEO, he had to deal with the theft of $650 million from FTX wallets through unauthorized transfers.
“Since my first day on the job I have been a mess. A fund tracking specialist on AWS described these portfolios as kind of like needles in a haystack of needles. The first 48 hours on the job were pure hell”
Ray also noted that the company’s liquidators do not have enough experience with crypto assets to resolve issues within FTX. This lack of experience led to the liquidation of about 4 wrapped bitcoins, worth around $90,450, due to the liquidators’ lack of understanding of how lending works on DeFi protocols like Aave.
Analysts at cryptocurrency firm Arkhan explained what happened in a few words:
On wallet 0x712, liquidators attempted to remove assets from a loan position on the DeFi protocol @tweet.
Rather than pay off the debt to close the position, the liquidators chose to remove all collateral, putting the position at risk of liquidation. pic.twitter.com/rcpkBQ5bYo
– Arkham (ArkhamIntel) January 12, 2023
The lack of corporate controls over FTX has also made it difficult to track company funds, as insiders can freely transfer company assets without any liability. Ray emphasized that one of the founders could easily have taken $500 million without being found out. “Literally, one of the founders could get into this environment, download half a billion dollars from wallets into a thumb drive and walk away with them. There would be absolutely no accountability for that,” he said.
John Ray asked the judge in charge of the case not to interfere with the investigation he had been conducting for the past four months, because the appointment of a new independent auditor would jeopardize all his work.
FTX attorney James Bromley argued that having a new independent auditor would jeopardize the integrity of all that has been going forward and all that will be done.
To date, Judge John Dorisy has not yet commented on his decision regarding the appointment of an independent reviewer. However, the majority of states expressed support for the designation.
Post by FTX CEO Testifying in US Court: FTX In Pure Hell appeared for the first time on CryptoPotato.