New FTX CEO Says Exchange Commingled Assets in Congressional Testimony 

The House Financial Services Committee is slated to hear from Ray and former CEO Sam Bankman-Fried during its “Investigating FTX Hearing” Tuesday morning

article-image

Blockworks exclusive art by Axel Rangel

share

FTX’s newly appointed CEO John Ray acknowledges the exchange commingled assets in Congressional testimony set to be delivered Tuesday. 

“Some of the unacceptable management practices at the FTX Group identified so far include…the commingling of assets,” Ray wrote in his prepared testimony, released Monday. 

FTX also inappropriately stored certain private keys “to access hundreds of millions of dollars in crypto assets without effective security controls or encryption,” Ray claimed in his statement. There was also no record of proper financial statements or transaction documentation, the insolvency professional added. 

Ray also clarified that FTX US, the exchange’s American subsidiary, was included in the Chapter 11 “because FTX US was not operated independently of FTX.com.” The filing helped to prevent a run on FTX US and protect current assets, Ray added. 

The House Financial Services Committee is slated to hear from Ray and former CEO Sam Bankman-Fried during its “Investigating FTX Hearing” Tuesday morning. 

Bankman-Fried previously went back and forth with Rep. Maxine Waters, the committee’s chair, over Twitter about whether or not he would appear. Waters said she would issue a subpoena if necessary. 

As of Friday, Dec. 9, Bankman-Fried is expected to attend the hearing, although he noted that he still does not have access to “much” of his data, but he “will try to be helpful during the hearing,” he said. It is expected that he will appear virtually, rather than in person.

The hearing will be the disgraced founder’s latest in a stint of public appearances following the exchange’s collapse. 

“I didn’t knowingly commingle funds,” Bankman-Fried told the New York Times in November. “I wasn’t trying to commingle funds.”

The restructuring team is currently focused on “implementing controls,” Ray said, including conducting audits and handling cash management. It also considers asset recovery and protection and maximizing value for stakeholders top priorities, according to the testimony.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Unlocked by Template.png

Research

With the spot ETH ETF approval, the institutions are coming. stETH - given its dominance in marketshare, existing liquid market structures, and highly desirable properties - is poised for institutions.

article-image

Launching cryptocurrencies the old fashioned way may soon make a return

article-image

Kraken and CertiK brought their beef to social media after Kraken said researchers exploited $3 million through a bug

article-image

NVIDIA’s historic run is only deepening the divide between mega-cap tech stocks and the rest of the market.

article-image

EIP-7702 was quickly adopted for the next Ethereum upgrade, but developers haven’t quite locked it down