Home news Assets from FTX are missing ahead of bankruptcy proceedings

Assets from FTX are missing ahead of bankruptcy proceedings

Incompetence, malfeasance, both, or neither?

by George Mensah
ftxassets....slashbeats

As the bankruptcy proceedings for cryptocurrency exchange FTX begin, sources report an important shortfall in assets. According to the New York Times, James Bromley, an attorney for FTX, stated that even after a week of investigation into FTX and Alameda Research, the precise valuation of either company is unknown. Important sums of money may have been stolen or are missing.

Sam Bankman-Fried owned FTX and Alameda Research, a quantitative trading firm. After FTX failed to cover withdrawals during a run on its assets, the relationship between the two companies came under intense scrutiny. Investigators suspect unethical or even illegal connections between FTX and Alameda, as we previously reported.

According to the Wall Street Journal, FTX and Alameda are being investigated by New York State authorities, besides federal investigations by the Justice Department and the Securities and Exchange Commission. I will reveal more information in the coming days.

To date, disclosures show FTX owed $3.1 billion to its 50 largest creditors. So far, those creditors have remained anonymous. More than a million other creditors, including individuals who had invested personal savings in the exchange, maybe owed money. According to the WSJ, few investors have yet to be reimbursed. The exchange’s funds are currently frozen.

Sam Bankman-Fried, CEO of FTX, resigned on November 11. John J. Ray III, an executive who specializes in handling businesses in bankruptcy or under investigation currently led the company. According to the Times, circumstantial evidence of criminal activity at and near FTX has already been presented, including a hack on FTX during the asset run and an unrecorded $300 million purchase of real estate in the Bahamas, where FTX is legally located.

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According to the Times, FTX’s current management is content to blame Sam Bankman-Fried for all the company’s problems. Bankman-Fried, according to Bromley, ran FTX as a “personal fiefdom,” controlling its finances personally and freely moving money between it and Alameda Research, where he was also CEO. Ray, who oversaw the Enron investigation, stated that he had never seen “such a failure of corporate control.”

The investigations are still ongoing. Further disclosures may reveal who else was involved in questionable dealings at FTX and Alameda, either unknowingly or maliciously.

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