In his 40 years of legal and restructuring experience, John Ray III had never seen a complete failure of corporate controls.
After the collapse of the energy giant, Ray was the CEO. He promised to work with regulators.
Ray stated in the filing that he did not have confidence in the accuracy of the balance sheets for FTX and its sister company Alameda Research.
The document is a declaration from Ray in his new role as CEO of FTX and associated entities, which filed for bankruptcy last week.
Bankman-Fried and his management team were accused of lackingadaisical controls on systems and regulatory compliance.
The concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals was unprecedented.
There have been reports on social media of the theft of hundreds of millions of dollars in Cryptocurrencies.
The actions of Bankman- Fried would be examined in the chapter 11 process.
Part of Ray's job would be to implement controls and basic corporate standards such as accounting, audit, cash management, cybersecurity, human resources, risk management, data protection and other systems that didn't exist before.
The use of a group email account as the root user to access confidential private keys and critical data for the FTX Group companies around the world was one of the management practices Bankman-Fried and FTX had.
Sam Bankman- Fried was unavailable for comment.
The 2008 collapse of the Ponzi scheme was similar to the misuse of sophisticated software.
FTX is trying to account for an accurate statement of cash andcryptocurrencies. It wouldn't be appropriate for stakeholders or the court to rely on the audited financial statements as a reliable indication of the financial circumstances, according to Ray.
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