Business strategy

New FTX CEO Says Never Seen Such ‘Complete Failure’ Of Corporate Control

Crisis-hit crypto exchange FTX’s new CEO John Ray III has said was a complete absence of trustworthy financial information at the bourse. He added that never in his career has he seen such a complete failure of corporate controls.

In a filing with the US bankruptcy court for the district of Delaware, John Ray III, “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here… From compromised systems integrity 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.”

Ray was appointed the FTX CEO within days of the company filing for bankruptcy protection.

The FTX Crisis

FTX, which was among the top-five crypto exchanges in the world, is facing a liquidity crisis and its CEO Sam Bankman-Fried (also known as SBF) has told investors that the company is facing a shortfall of up to $8 billion from withdrawal requests and needs emergency funding, according to The Wall Street Journal.

FTX CEO Sam Bankman-Fried on Wednesday said that without a cash injection, bankruptcy is likely. On the November 7 night, amid the liquidity crunch, Bankman-Fried was scrambling to raise money from venture capitalists and other investors. FTX was was earlier this year valued at $32 billion by private investors.

As FTX CEO Bankman-Fried was approaching investors for raising funds, he also went to Binance, which is already a significant investor in FTX. Binance CEO Changpeng Zhao (also known as CZ) then agreed on the rescue and announced that he had reached a non-binding deal to buy FTX’s non-US businesses for an undisclosed amount.

However, a day after the announcement, the Binance CEO took a U-turn and said “the issues are beyond our control or ability to help”. This reversal jolted the cryptocurrency market as it pointed toward the uncertainty in the crypto world.

Binance in its statement has said, “As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com. In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.”

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