Newly appointed FTX CEO John Ray III, who is the restructuring official overseeing the cryptocurrency exchange bankruptcy proceedings, said in a court filing that he has never seen in his 40-year career “such a complete failure of corporate controls.”
In the filing, Ray disclosed that he did “not have confidence” in the accuracy of the balance sheets for Alameda Research, FTX’s sister company, or any of its subsidiaries.
“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 said.
Many of the companies in the FTX Group “did not have appropriate corporate governance,” and some “never had board meetings,” the filing said.
Ray formerly served as CEO of Enron after the infamous implosion of the energy giant in 2001. Ray was appointed CEO of FTX when the crypto exchange filed for bankruptcy last Friday, and its founder Sam Bankman-Fried stepped down from the role.
Unrelated to the filling, FTX founder Bankman-Fried said he regretted his decision to file for bankruptcy.
Those in charge of the Chapter 11 bankruptcy process were “trying to burn it all to the ground out of shame,” he said in an interview published by Vox.
Bankman-Fried said later on Twitter that the basis of the interview, an exchange of messages on the same platform, was not supposed to be public.