FTX was the pure hell

FTX was the pure hell

John J Ray III earned $ 690,000 as CEO for two months. That may be a dream for the average man, but he swears that this was his worst nightmare.

The new CEO from FTX, John Ray III, recently appeared in front of the United States Bankruptcy Court for Delaware to report on his actions as CEO of the now dissolved crypto exchange. In his statement, he revealed the difficulties with which he was confronted after taking on the role of the CEO.

According to Ray, he has had chaotic experiences that he has not experienced in his previous positions, including the insolvency proceedings by Enron and other large companies. On his first day as an interim CEO, he had to deal with the theft of $ 650 million from FTX's briefs through unauthorized transfers.

"From my first working day I experienced chaos. One of the found tracking specialists described the wallets in this AWS system as a kind of needle in the hay heap full of needles. These first 48 hours of work were pure hell."

Ray also pointed out that the company's liquidators do not have enough experience with crypto-assets to fix the problems within FTX. This lack of specialist knowledge led to the liquidation of around 4 wrapped Bitcoin worth around $ 90,450, since the liquidators did not understand how lending in defi protocols such as AAVE works.

The analysts of the cryptofirma Arkhan explained in a few words what happened:

on the wallet 0x712 attempted liquidators to remove assets from a loan position in the Defi protocol @aaveaave .

Instead of repaying the debts to smell the position, the liquidators decided to remove all additional collateral, which exposed the position of liquidation. pic.twitter.com/rcpkbq5byo

- arkham (@arkhamintel) 12. January 2023

The lack of corporate controls at FTX also made it difficult to trace the company's money back, since insiders were able to freely transfer the company's assets without accounting. Ray emphasized that one of the founders could easily take $ 500 million without discovery. "Literally, one of the founders could come into this environment, download half a billion dollars from items to a USB stick and go with them. And there is no account of this," he said.

John Ray asked the judge responsible for the case not to interfere in the investigation he had carried out in the past four months, since the appointment of a new independent examiner would endanger his entire work.

The lawyer of FTX, James Bromley, argued that the presence of a new independent examiner has to endanger the security of everything that has progressed.

To this day judge John Doresey has not yet commented on his decision on the appointment of an independent auditor. However, the majority of the states have expressed their support for the appointment.

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