- FTX lacked financial and accounting controls despite managing billions of dollars, as per recent report.
- Experts believe that the company was controlled by a small group and stifled dissent.
- Report highlights hubris, incompetence, and greed by Bankman-Fried and senior executives.
Bankrupt cryptocurrency exchange FTX Trading Ltd. was found to be deficient in crucial financial and accounting safeguards as per a report from the company’s creditors.
The document pointed out a culture of stifling opposition within the company and revealed that employees made internal jokes about misplacing millions of dollars in assets, suggested credible sources. Moreover, it marks the first time that FTX Trading Ltd.’s creditors have released any findings since the digital-asset empire of Sam Bankman-Fried crumbled into insolvency in November, causing the loss of billions of dollars in customer funds.
As per the report, the FTX Group was under the tight control of a small group of individuals who exhibited little interest in establishing a suitable oversight or control framework, despite projecting a public image of being a responsible business.
The announcement also highlighted that the fundamental reasons behind FTX’s dramatic downfall were “hubris, incompetence, and greed” exhibited by Bankman-Fried and senior executives, including Nishad Singh, former engineering director, and Gary Wang, former chief technology officer.
The report further stated,
These individuals stifled dissent, commingled and misused corporate and customer funds, lied to third parties about their business, joked internally about their tendency to lose track of millions of dollars in assets, and thereby caused the FTX Group to collapse as swiftly as it had grown.
Additionally, according to the recent report on FTX Trading Ltd., the company had no information about even basic details of its employees when it filed for Chapter 11 bankruptcy.
“In line with our commitment to transparency from the outset of the Chapter 11 proceedings, we are publishing the initial report,” noted John J. Ray III, FTX’s new Chief Executive Officer and Chief Restructuring Officer, in a press release. Meanwhile, Creditors of FTX Trading Ltd. analyzed over 1 million documents, interviewed 19 employees, and found that the company lacked fundamental financial and accounting controls, despite handling billions of dollars in assets and large transactio
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Source: https://coinedition.com/ftx-trading-report-exposes-lack-of-financial-accounting-controls/