FTX CEO Ray details firm’s lack of controls, sophistication under SBF in testimony to Congress

Quick Take

  • New congressional testimony from FTX’s wartime CEO features more salvos at Sam Bankman-Fried’s management. 
  • John Ray’s testimony will precede Bankman-Fried’s before the House Financial Services Committee on Tuesday.

FTX CEO John Ray refuted Sam Bankman-Fried's contention that FTX US has enough segregated funds on hand to re-open user withdrawals.

The CEO laid out the core structural flaws that led to the collapse of the multi-billion dollar empire early last month in a written statement ahead of his appearance tomorrow before the House Financial Services Committee. 

“Questions have been raised as to why all of the FTX Group companies were included in the Chapter 11 filing, particularly FTX US," Ray said. "The answer is because FTX US was not operated independently of FTX.com."

He further mapped a series of problems involving FTX’s entanglement with Alameda Research that led to the collapse.

“Customer assets from FTX.com were commingled with assets from the Alameda trading platform,” he said, also noting that senior management faced no controls on access to private keys. 

Other issues plaguing that relationship were Alameda’s risky margin trading and unrestricted borrow from FTX's deposits; FTX’s wave of investments and loans to insiders at FTX and Alameda; and the fact that Alameda’s market-making left customer assets on outside exchanges around the world, Ray said.

'Utter failure of corporate controls'

His testimony will come before Bankman-Fried's own virtual appearance

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