FTX operated like former CEO Sam Bankman-Fried’s “personal estate,” lawyers for the failed cryptocurrency exchange said Tuesday in bankruptcy court in Wilmington, Delaware.
The comment was made during the first bankruptcy hearing of the failed cryptocurrency exchange, one of the world’s largest cryptocurrency exchanges. The hearing was streamed live on both his YouTube and Zoom.
FTX submitted After facing a liquidity crisis, it filed for Chapter 11 bankruptcy in the United States on November 11th. A potential bailout deal by bigger rival Binance was eventually abandoned, prompting traders to quickly withdraw billions of dollars from the platform.
According to the court on Nov. 16 filing, FTX has a reported cash balance of $1.24 billion, of which $751 million is held by debtors and the remaining $488 million is held by non-debtors.
That’s well below the $3.1 billion the company owes to more than one million creditors, including the $500 million it owes to just its top three creditors.
At least 100 companies are participating in bankruptcy proceedings.
FTX attorney James Bromley said: Said court during the company’s bankruptcy hearing on Tuesday.
lawyer said FTX, once valued at $32 billion after raising $400 million from investors, was “controlled by a small group of inexperienced and unsophisticated individuals. It seems to indicate that some or all of them are compromised individuals.”
“I’m sorry…it’s up to me.”
“What we have here is a global international organization, but it was run as Sam Bankman Freed’s personal estate,” Bromley said. Added.
Bankman-Fried stepped down as CEO of the failed cryptocurrency exchange earlier this month, saying:[expletive] It pointed out a series of mistakes, including underestimating the margin on users’ accounts.
“Sorry. That’s the biggest thing,” he wrote on Twitter. “It’s my fault that we got there in the first place.”
After the collapse, FTX is led by a new CEO, John Ray, who makes $1,300 an hour. document filed in the U.S. Bankruptcy Court for the District of Delaware,
In court documents filed in support of FTX’s Chapter 11 bankruptcy petition filed earlier this month, Wray accused FTX of mismanagement, stating that in his 40-year career, “this company “I’ve never seen a complete failure of management and such a complete lack of corporate control.” Here is the reliable financial information generated. ”
“The integrity of the system has been compromised, from misregulatory oversight abroad to centralized control in the hands of a very small number of groups that are inexperienced, unsophisticated and potentially at risk. To date, the situation is unprecedented,” he wrote.
On Tuesday, a lawyer for the company noted that FTX is still battling ongoing issues involving hacks and an estimated $1 billion or more in lost assets.
Earlier this week, Reuters, citing official wealth records, said: report Bankman-Fried’s FTX, his parents and the company’s senior management have purchased at least 19 properties worth nearly $121 million in the Bahamas over the past two years.
It is unclear what funding sources were used to fund the purchase.