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Dec 12, 2022 - Economy

FTX's new chief blasts previous leadership for "unacceptable" practices

headshot
Illustration of the silhouette of Sam Bankman-Fried crumbling and falling.

Illustration: Brendan Lynch/Axios

FTX Group's new chief John J. Ray III eviscerated the former leadership of the now bankrupt crypto exchange, outlining their "unacceptable management practices."

Driving the news: The collapse of FTX appeared to stem from "the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals," Ray said in prepared remarks for the House Financial Services Committee hearing on Tuesday.

What's happening: Ray, the only other named witness besides FTX founder and former chief Sam Bankman-Fried, is set to answer questions from lawmakers during one of the two panels on Tuesday.

Details: Ray's version of what went wrong at FTX could contradict SBF's account.

  • Ray, for example, said that FTX US was included in the Chapter 11 bankruptcy proceedings, because FTX US "was not operated independently of FTX.com."
  • Meanwhile, SBF continues to insist that FTX US customers could be made whole.

The intrigue: Ray, like SBF, said he may not have all of the answers immediately.

What he's saying: "I should note that my ability to comment on certain matters today will be materially limited by the state of the FTX Group’s books and records, ongoing bankruptcy proceedings, and the numerous, ongoing investigations by U.S. law enforcement and regulators," Ray said.

The other side: SBF said Monday in a Twitter Spaces event that his testimony may not satisfy lawmakers.

Bottom line: Big revelations about FTX might not be uncovered during Tuesday's hearing.

Go deeper: FTX's Sam Bankman-Fried: "I screwed up"

Go deeper