New FTX CEO Calls the Crypto Exchange’s Corporate Control a ‘Complete Failure’

Since taking over last week, Mr. Ray said that his team has secured about $740 million worth of cryptocurrency belonging to various parts of FTX’s business. But he called that sum “only a fraction” of what he hopes to recover, saying the company has hired forensic analysts and blockchain experts to assist in locating any remaining funds. The run on FTX left the company owing an estimated $8 billion, according to people familiar with the matter.

In Mr. Ray’s telling, the mismanagement permeated the entire company.

Mr. Ray said FTX’s human resources department was so disorganized that his team had been unable to prepare a complete list of who worked at FTX. And he said corporate funds were used to buy homes and other personal items for employees and advisers, without proper documentation. Employees would make payment requests through a chat portal, where supervisors approved disbursements using “personalized emojis,” the filing said.

According to the filing, FTX lacked lasting records of corporate decisions, partly because Mr. Bankman-Fried relied on communications platforms that were set to automatically delete messages after a short time and encouraged employees to use the same applications.

The collapse of FTX was a shocking fall for Mr. Bankman-Fried, who was widely considered one of the most reliable figures in the freewheeling, loosely regulated crypto industry.

Once worth as much as $24 billion, Mr. Bankman-Fried became a frequent presence in the halls of Congress, where he testified about the future of the crypto industry and tried to shape legislation governing the industry. He rubbed shoulders with famous actors and athletes, and once appearing onstage at a conference in the Bahamas with former President Bill Clinton and Tony Blair, the former British prime minister. He was also a prolific and much-sought-after political donor, contributing more than $5 million to President Biden’s 2020 election effort.

But after the collapse, a series of damaging revelations about his leadership of FTX have come to light. He relied on a close circle of fellow executives, and sometimes did not share information with key figures at the company. At times, he was in a romantic relationship with Caroline Ellison, the chief executive of Alameda. And he is firmly in the cross hairs of law enforcement and government regulators, raising the prospect of criminal charges and possible prison time.

Since resigning, Mr. Bankman-Fried has started to speak more publicly about the collapse of his company. In an interview with The New York Times on Sunday, he claimed that he was unaware of how much money Alameda had borrowed from FTX. He expressed deep regrets over his management of the firm. But at other moments, he seemed almost flippant, describing the video game he had been playing during the crisis and outlining a bizarre plan to post a series of cryptic tweets.


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