Former FTX.com CEO Sam Bankman-Fried.

Bankman-Fried alleges new FTX CEO’s testimony is “false”

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Sam Bankman-Fried, the founder of the bankrupt cryptocurrency exchange FTX.com, alleged in an interview released on Monday that John J. Ray III, the new chief executive of the firm, has made statements that Bankman-Fried knows to be “false.”

See related article: Coinbase CEO Armstrong says Bankman-Fried’s US$8 bln ‘accounting error’ doesn’t stand up

Fast facts

  • “I don’t know if they were intentionally lying or if it was just an honest mistake because of people not consulting with anyone who knew where any of these records were,” Bankman-Fried said. “But there have been cases where, you know, it’s been said X, Y or Z did not exist. And I am staring at a copy of X, Y, Z, and none of my emails have been returned.”
  • The disgraced founder claimed that Ray and his team have ignored all of Bankman-Fried’s attempts to get in touch.
  • In a bankruptcy deposition made on Nov. 17, Ray, the Chicago-based restructuring specialist who managed the bankruptcy of Enron Corp. in 2001, described FTX as having the worst examples of corporate controls he has witnessed.
  • “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 in the bankruptcy filing.
  • “I would dispute the claim that there are zero financial controls,” Bankman-Fried said in the two-hour interview with media outlet The Block. “I completely agree that there were places in which there were very poor controls and that those places were critical and that that was really bad in terms of zero financial controls.”
  • U.S.-based exchange Coinbase Global Inc. Brian Armstrong also weighed in on the situation recently, saying that Bankman-Fried’s explanation of sloppy accounting leading to an US$8 billion hole in its balance sheets does not stand up to scrutiny.

See related article: New FTX chief says lack of controls at bankrupt exchange ‘unprecedented’



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