FTX's New CEO Says Company Did "Old Fashioned Embezzlement"

The House Financial Services Committee held a hearing after the arrest of Sam Bankman- Fried, the founder of FTX.

According to CNBC, Bankman-Fried is facing serious criminal charges in the US, including conspiracy to commit wire fraud. The CEO wasn't able to show up for the hearing as he was arrested.

John Ray, the new CEO of FTX, had an unusual explanation for what had happened, telling lawmakers at the hearing that his efforts to investigate the company have found that FTX had no record-keeping.

He told the committee that it was just old fashioned theft. Taking money from customers and using it for your own purposes is what this is about. It's not sophisticated at all.

Considering Ray's career, it's an especially noteworthy testimony. The lawyer has a reputation for picking up the pieces after companies fall apart.

He was in charge of the fate of Enron in 2001 after a huge accounting scandal. He was able to pay off his debts.

The most prominent scandal in the history of business pales in comparison to what Ray has seen at FTX.

He wrote that he had never seen such a complete failure of corporate controls and a complete lack of trustworthy financial information.

"From compromised integrity systems 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," he said.

When asked if Bankman-Fried was telling the truth when he said that the exchange had enough to cover all client holdings, Ray replied that the statement was false.

Approximately 1,500 people in the Bahamas, where FTX was based, were able to take a total of $100 million within a single day.

According to the NYT, Ray says that he and his team have recovered $740 million from FTX, which is only a fraction of what he still hopes to recover.

FTX owes its clients billions of dollars.

The CEO of FTX told lawmakers in a hearing that the company committed an "old fashioned" theft.

SBF and Ellison were accused of having a secret group chat called "Wire fraud".