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New FTX CEO John Ray said there was flawed regulatory oversight and a lack of corporate control of the bankrupt crypto exchange founded by Sam Bankman-Fried in a U.S. court filing on Thursday. In the highest-profile crypto blow-up to date, FTX filed for protection in the United States on Friday after traders pulled $6-billion from the platform in three days and rival exchange Binance abandoned a rescue deal. “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” Ray said in the filing, which was lodged with the District of Delaware bankruptcy court. “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 added in the filing. Bankruptcy specialist Ray, who took over from Bankman-Frie...

FTX was run as a “personal fiefdom” of former CEO Sam Bankman-Fried, attorneys for the collapsed crypto exchange said in its first bankruptcy hearing as they detailed ongoing challenges such as hacks and substantial missing assets. In the highest-profile crypto blowup to date, FTX filed for protection in the United States after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal. The collapse has left an estimated 1 million creditors facing losses totalling billions of dollars. An attorney for FTX said at a bankruptcy hearing on Tuesday that the company now intends to sell off healthy business units, but has been the subject of cyberattacks and had “substantial” assets missing. FTX said on Saturday it has launched a strategic review of its global assets and is preparing for the sale or reorganization of some businesses. The hearing was held at the U.S. Bankruptcy Court in Wilmington, Delaware and was livestreamed to around 1,50...

FTX Arena, where the Miami Heat basketball team plays, on Nov. 12. Marta Lavandier/The Associated Press The company tasked with locking down the assets of the failed cryptocurrency exchange FTX said they’ve managed to recover and secure US$740 million in assets so far, a fraction of the potential billions of dollars likely missing from the company’s coffers. The numbers were disclosed on Wednesday in court filings by cryptocurrency custodial company BitGo, which FTX hired in the hours after the company filed for bankruptcy on November 11. The biggest worry for many of FTX’s customers is they’ll never see their money again. FTX failed because its founder and former CEO Sam Bankman-Fried and his lieutenants used customer assets to make bets in Bankman-Fried’s trading firm, Alameda Research. Bankman-Fried was reportedly looking for upwards of US$8 billion from new investors to repair the company’s balance sheet. The US$740 million figure is from Nov. 16, and since then additional assets...

Sam Bankman-Fried, the founder and former CEO of now-bankrupt crypto exchange FTX, attempted to distance himself from suggestion of fraud in his first public appearance since his company’s collapse stunned investors and left creditors facing losses totalling billions of dollars. Speaking at the New York Times’ Dealbook Summit with Andrew Ross Sorkin at what he said was against the advice of his lawyers, Bankman-Fried said that he did not knowingly commingle customer funds on FTX with funds at his proprietary trading firm, Alameda Research. The liquidity crunch at FTX came after Bankman-Fried secretly moved $10-billion of FTX customer funds to Alameda Research, Reuters reported, citing two people familiar with the matter. At least $1 billion in customer funds had vanished, the people said. Bankman-Fried told Reuters the company did not “secretly transfer” but rather misread its “confusing internal labelling. FTX filed for bankruptcy and Bankman-Fried stepped down as chief executive on...

A promotion for an appearance via video stream by Sam Bankman-Fried at the New York Times Dealbook Conference in New York on Nov. 30. WINNIE AU /The New York Times News Service FTX’s Sam Bankman-Fried is willing to testify before the U.S. House Committee on Dec. 13, the cryptocurrency exchange’s founder said in a tweet on Friday, as regulators investigate his role in the wake of its collapse. A day earlier House Financial Services Committee Chairwoman Maxine Waters told Reuters that she is prepared to subpoena Bankman-Fried if he does not agree to appear before the panel next week. “I still do not have access to much of my data – professional or personal. So there is a limit to what I will be able to say, and I won’t be as helpful as I’d like,” Bankman-Fried said on Friday. “But as the committee still thinks it would be useful, I am willing to testify on the 13th,” he added. It was not clear if he plans to be at the hearing in person or through a video feed. FTX...

Sam Bankman-Fried, the founder and former CEO of now-bankrupt crypto exchange FTX, said on Monday he would testify remotely at Tuesday’s U.S. House Finanical Services Committee hearing to examine the collapse of the company. In a Twitter Spaces event held on Monday with Twitter account Unusual Whales, Bankman-Fried said he would be “calling in” to the hearing. A spokesperson for Bankman-Fried confirmed that he would not be testifying at the hearing in person. FTX CEO John Ray will also appear before the committee, although it is not yet clear if he will testify virtually or in person. https://www.tausiinsider.com/ftx-founder-sam-bankman-fried-says-he-will-testify-remotely-at-upcoming-congressional-hearing/?feed_id=329076&_unique_id=642b6d677e4f8

Sam Bankman-Fried speaks at the Crypto Bahamas conference in Nassau on April 27. ERIKA P. RODRIGUEZ /The New York Times News Service The Bahamas police have arrested former FTX CEO Sam Bankman-Fried, the country’s attorney general said on Monday, adding that the Bahamas has received formal notification from the United States of criminal charges against him. A spokesman for the U.S. Attorney’s office in Manhattan confirmed Bankman-Fried had been arrested in the Bahamas but declined to comment on what the charges were. “As a result of the notification received and the material provided therewith, it was deemed appropriate for the Attorney General to seek SBF’s arrest and hold him in custody pursuant to our nation’s Extradition Act,” the office of The Bahamas Attorney General Ryan Pinder said. A lawyer for Bankman-Fried could not immediately be reached for comment. In a series of interviews and public appearances in late November and December, Bankman-Fried acknowl...

FTX CEO John Ray speaks during a U.S. Hose committee hearing in Washington, on Dec. 13. ELIZABETH FRANTZ/Reuters Poor management practices and inexperienced leaders led to FTX’s implosion, the crypto exchange’s new chief executive told lawmakers on Tuesday, shortly after U.S. regulators charged founder Sam Bankman-Fried with defrauding investors. “The FTX group’s collapse appears to stem from absolute concentration of control in the hands of a small group of grossly inexperienced, non-sophisticated individuals,” said John Ray, who was named CEO of FTX after Bankman-Fried stepped down and the company filed for bankruptcy on Nov. 11. Ray also said there was virtually no distinction between the operations of FTX and Alameda Research, Bankman-Fried’s crypto trading firm, which maintained close ties with his exchange. “I’ve just never seen an utter lack of record keeping – absolutely no internal controls whatsoever,” Ray told the U.S. House of Representatives Financial Services Committee....

The Bahamas Department of Correctional Services facility where Sam Bankman-Fried, who founded FTX, is believed to be held following his arrest in Nassau, Bahamas, Dec. 15. DANTE CARRER/Reuters Former FTX CEO Sam Bankman-Fried is expected to appear in court in the Bahamas on Monday to reverse his decision to contest extradition to the United States, where he faces fraud charges, a person familiar with the matter said on Saturday. The cryptocurrency mogul was indicted in federal court in Manhattan on Dec. 13 and accused of engaging in a scheme to defraud FTX customers. His decision to consent to extradition would pave the way for him to appear in U.S. court to face charges of using stolen customer deposits to pay for expenses and debts and to make investments on behalf of his crypto hedge fund, Alameda Research LLC. Still, any trial is likely more than a year away, legal experts told Reuters. FTX FOMO: How big-name investors, including Canadian pension funds, bought into a crypto craze...

FTX founder Sam Bankman-Fried leaves the Magistrate Court building in Nassau, Bahamas, on Dec. 19. MARCO BELLO/Reuters am Bankman-Fried will be taken to an airport in The Bahamas at 6 p.m. EST (2300 GMT) on Wednesday, a person familiar with the matter said, after the FTX founder was taken to prison following a courthouse appearance where he consented to be extradited to the United States. Federal prosecutors in Manhattan last week charged the 30-year-old cryptocurrency mogul with stealing billions of dollars in FTX customer assets to plug losses at his hedge fund, Alameda Research, in what U.S. Attorney Damian Williams called “one of the biggest financial frauds in American history.” Bankman-Fried left the courthouse, surrounded by guards with assault weapons, and entered a vehicle, according to Reuters Video. The Ministry of Foreign Affairs in The Bahamas said in a statement that the foreign minister had signed off on allowing Bankman-Fried’s extradition to the United States. Bankma...

Sam Bankman-Fried, the founder and former CEO of crypto currency exchange FTX, is escorted out of the Magistrate Court building in Nassau, Bahamas, on Dec. 21. DANTE CARRER/Reuters Sam Bankman-Fried was released on a US$250-million bond package on Thursday while he awaits trial on fraud charges related to the collapse of the FTX crypto exchange. Federal prosecutors in Manhattan have accused him of stealing billions of dollars in FTX customer funds to plug losses at his hedge fund, Alameda Research. Mr. Bankman-Fried was not asked to enter a plea on Thursday. He has previously acknowledged risk-management failures at FTX, but has said he does not believe he has criminal liability. His defence lawyer, Mark Cohen, declined to comment after the hearing in Manhattan federal court. After the hearing, the one-time billionaire was surrounded by photographers as he exited the Lower Manhattan courthouse and entered a black SUV. He sported facial stubble and a grey suit – a far cry for the shor...

Former FTX chief executive Sam Bankman-Fried walks from the Manhattan federal court after securing bail, on Dec. 22. JEENAH MOON/Reuters A judge kept secret that two of Sam Bankman-Fried’s closest associates had turned against him so the cryptocurrency entrepreneur wouldn’t get spooked and fight extradition from the Bahamas, according to court transcripts made public Friday. U.S. prosecutors in New York waited until Bankman-Fried, the founder of the collapsed crypto exchange FTX, was in FBI custody before revealing that his business partners, Carolyn Ellison and Gary Wang, had secretly pleaded guilty to fraud charges and were cooperating in the investigation. U.S. Attorney Damian Williams announced the guilty pleas when Bankman-Fried was in the air late Wednesday. Prosecutors had been concerned that if Bankman-Fried found out his friends were cooperating, he might try to fight extradition from the Bahamas, where he had been arrested at the request of U.S. authorities. Ellison, 28, an...

FTX founder Sam Bankman-Fried leaves the courthouse in New York, on Dec. 22. Yuki IWAMURA/The Associated Press Sam Bankman-Fried’s criminal case over the collapse of his FTX cryptocurrency exchange has been reassigned to a judge recently known for handling defamation lawsuits against former U.S. President Donald Trump and a sexual abuse lawsuit against Prince Andrew. U.S. District Judge Lewis Kaplan replaces his colleague Ronnie Abrams, who recused herself on Friday after learning that the law firm Davis Polk & Wardwell, where her husband is a partner, advised FTX in 2021. Known for his no-nonsense demeanor in the courtroom, Kaplan, a judge since 1994, oversees two civil lawsuits by former Elle magazine columnist E. Jean Carroll accusing Trump of defaming her by denying he raped her in a Manhattan department store dressing room 27 years ago. Trump has sought the dismissal of both lawsuits, including a battery claim. Kaplan also recently oversaw Virginia Giuffre’s civil lawsuit ac...

Crypto exchange FTX has recovered more than $5-billion but the extent of customer losses in its collapse is still unknown, an attorney for the bankrupt company founded by Sam Bankman-Fried said on Wednesday. The company, which was valued a year ago at $32-billion, filed for bankruptcy in November and U.S. prosecutors accused Bankman-Fried of orchestrating an “epic” fraud that may have cost investors, customers and lenders billions of dollars. “We have located over $5-billion of cash, liquid cryptocurrency and liquid investment securities,” Andy Dietderich, an attorney for FTX, told a U.S. bankruptcy judge in Delaware at the start of Wednesday’s hearing. Dietderich also said that the company plans to sell non-strategic investments that had a book value of $4.6-billion. However, Dietderich said the legal team is still working to create accurate internal records and the actual customer shortfall remains unknown. The U.S. Commodities Futures Trading Commission has estimated missing custo...

Former FTX chief executive Sam Bankman-Fried leaves Manhattan federal court, in New York, on Jan. 3. ED JONES/AFP/Getty Images Sam Bankman-Fried said he did not steal money and blamed the collapse of his now-bankrupt FTX exchange on a broad crash in cryptocurrency markets, in a highly unusual blog post on Thursday, a month after his arrest on U.S. fraud charges. Federal prosecutors in Manhattan in December said Mr. Bankman-Fried stole billions of dollars from FTX customers to pay debts for his crypto-focused hedge fund, Alameda Research, purchase lavish real estate and donate to U.S. political campaigns. He has pleaded not guilty. The Substack blog post – a rare public statement by a U.S. criminal defendant – amounts to a preview of the defence case Mr. Bankman-Fried may present when his trial begins on Oct. 2. “I didn’t steal funds, and I certainly didn’t stash billions away,” Mr. Bankman-Fried wrote. Defense lawyers typically advise clients to stay silent before trial because pros...

FTX Group CEO John Ray speaks during a U.S. House committee hearing, in Washington, on Dec. 13, 2022. SARAH SILBIGER/Reuters Bankrupt crypto exchange FTX is looking into the possibility of reviving its business, Chief Executive Officer John Ray told the Wall Street Journal on Thursday. Ray, who took over the reins in November, has set up a task force to explore restarting FTX.com , the company’s main international exchange, he said in an interview with the WSJ. The CEO also told the Journal that he would look into whether reviving FTX’s international exchange would recover more value for the company’s customers than his team could get from simply liquidating assets or selling the platform. FTX’s native token FTT surged nearly 30 per cent after the report. “I’m glad Mr. Ray is finally paying lip service to turning the exchange back on after months of squashing such efforts!” FTX founder and former CEO Sam Bankman-Fried said in a tweet. “I’m still waiting for him to finally admit FTX U...

A car with three occupants recently drove into a barricade outside the California home owned by Sam Bankman-Fried’s parents, an apparent attempt to gain access to the property where the founder of crypto exchange FTX is under house arrest. Lawyers for Bankman-Fried made the disclosure in a letter dated Thursday to U.S. District Court Judge Lewis A. Kaplan who is presiding over the criminal case against Bankman-Fried. He faces charges that he cheated investors and looted customer deposits on his cryptocurrency trading platform, using some of the funds to make large campaign donations to U.S. politicians. Bankman-Fried pleaded not guilty last month and was released on $250 million bond, on the condition he await trial at this parents’ home in Palo Alto, California. The lawyers were responding to a motion by several media outlets to unseal the names of two individuals besides Bankman-Fried’s parents who agreed to sign the recognizance bond. The lawyers, Mark Cohen and Chris Everdell, i...