John J Ray III earned $690,000 for two months as CEO of FTX. It might be a dream for the average person, but he swears it’s been his worst nightmare.
New FTX CEO John Ray III recently appeared in United States Bankruptcy Court for the District of Delaware to share his actions as CEO of the now defunct crypto exchange. In his testimony, he revealed the difficulties he faced after taking on the role of CEO.
According to Ray, he had unparalleled chaotic experiences in his previous positions, including the bankruptcy proceedings of Enron and other large corporations. On his first day as interim CEO, he had to deal with the theft of $650 million FTX wallets through unauthorized transfers.
“From my first day on the job, I experienced chaos. One of the funds tracking specialists described wallets in this AWS system as a kind of needles in a haystack of needles. Those first 48 hours of work were pure hell”
Ray also pointed out that the company’s liquidators are not experienced enough in crypto assets to address issues within FTX. This lack of expertise led to the liquidation of around 4 Wrapped Bitcoin, worth around $90,450, as liquidators did not understand how loans work on DeFi protocols such as Aave.
Analysts at crypto firm Arkhan explained what happened in a nutshell:
On wallet 0x712, liquidators attempted to remove assets from a loan position on the DeFi protocol @aaveaave.
Rather than repay the debt to close out the position, the liquidators opted to remove all additional collateral, putting the position at risk of liquidation. pic.twitter.com/rcpkBQ5bYo
— Arkham (@ArkhamIntel) January 12, 2023
The lack of corporate controls at FTX also made it difficult to trace company money, as insiders could freely transfer company assets without liability. Ray pointed out that one of the founders could easily take $500 million undetected. “Literally, one of the founders could walk into this environment, download half a billion dollars worth of wallets onto a USB stick and walk away with them. And there will be no reporting for that,” he said. declared.
John Ray asked the judge in charge of the case not to intervene in the investigation he had been carrying out for four months, because the appointment of a new independent examiner would compromise all of his work.
FTX attorney James Bromley argued that bringing in a new independent reviewer would jeopardize the security of everything that happened and everything that will go forward.
To date, Judge John Doresey has yet to comment on his decision on the appointment of an independent reviewer. However, the majority of states expressed support for the nomination.
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