New FTX CEO accuses Sam Bankman-Fried of malpractice

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Speaking before the court, the newFTX CEO John Ray sharply criticized the failures of the previous administration  and   management style of the former head of the exchange Sam Bankman-Frida.

On Thursday in Delaware State Courtthe first meeting to consider the bankruptcy procedure of the FTX cryptocurrency exchange, as well as the initiation of asset valuation processes. The new head of the exchange, John J. Ray, said that since his appointment on November 11, he, together with specialists from Alvarez & Marsal, Sullivan & Cromwell, Nardello & Co., Chainalysis, Kroll and confidential cybersecurity firms worked around the clock to track down and secure investors' assets.

His team was faced with the task of collectinginformation, search and protection of client funds. The work was complicated by responding to numerous requests from regulatory authorities, deciphering accounting records, and also preparing documentation necessary to submit to the court.

“I have over 40 years of legal experience andrestructuring experience. I was a principal investigator in several of the largest corporate bankruptcies: Enron, Residential Capital, Nortel, and Overseas. Almost every situation I have been involved in has been characterized by deficiencies in internal controls, regulatory compliance, human resources and systems integrity. However, never in my career have I seen such a complete failure of corporate controls and such a complete lack of reliable financial information as has occurred here,” said John Ray.

Ray further explained that this is "an unprecedentedsituation" in which all the blame lies with Sam Bankman-Fried and his team - "a small group of inexperienced, unsophisticated and potentially compromised individuals." According to preliminary findings, the company lacked the basis for implementing controls over accounting, auditing, cash management, cybersecurity, human resource management, data protection risks and other systems critical to maintaining the business.

In this regard, searching for the location andEnsuring the safety of FTX property to fill the bankruptcy estate is difficult. John Ray suggested that a significant portion of FTX's assets may be missing or stolen, and also asked the court to conduct a comprehensive and open investigation into his claims against  Sam Bankman-Fried.

The former FTX CEO previously said his biggest regret was filing for bankruptcy. In his opinion, the problems of the exchange would have already been solved by 70 percent.