FTX CEO's testimony before US court: FTX was pure hell

John J Ray III earned $690,000 in two months as CEO of FTX. It may be a dream for the average person, but he swears it was his worst nightmare. John Ray III, recently appeared in the United States District Court for the District of Delaware to share his exploits as CEO of the now-defunct cryptocurrency exchange. In his testimony, he revealed the difficulties he faced after taking on the role of CEO.

According to Ray, he went through a chaotic experience unlike any he had encountered 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 a theft $650 million from FTX wallets through unauthorized transfers.

“From my first day on the job, I experienced chaos. One of the fund tracking specialists described the wallets in this system as needles in a haystack. Those first 48 hours on the job were pure hell.”

Lack of expertise among FTX liquidators

Ray also pointed out that the firm’s liquidators lacked sufficient experience with crypto assets to resolve issues within FTX. This lack of expertise led to the liquidation of about 4 Wrapped BTC worth approximately $90,450 because the liquidators did not understand how lending works on DeFi protocols like Aave.

Crypto firm Arkhan analysts explainedWhat happened, in a few words:

On wallet 0x712, liquidators attempted to remove assets from a lending position on the DeFi protocol Aave.

Instead of paying off the debt to close the position, the liquidators decided to remove all additional collateral, thereby exposing the position to the risk of liquidation.

The lack of corporate controls at FTX also made it difficult to trace the company’s money, as insiders were free to transfer company assets without accountability. Ray stressed that any one of the founders could easily have taken $500 million without being detected. “Literally, any one of the founders could have come into this environment, downloaded half a billion dollars from wallets onto a flash drive, and walked away with it. And it wouldn’t be accounted for at all,” he said.

FTX CEO John Ray Doesn't Want an Independent Examiner

John Ray asked the judge in charge of the case not to interfere with the investigation he has been conducting for the past four months because appointing a new independent examiner would jeopardize all of his work.

FTX lawyer James Bromley argued that the presence of a new independent examiner would jeopardize the security of everything that has progressed and everything that will continue. To date, Judge John Doresey has not yet commented on his decision to appoint an independent examiner. However, most stakeholders have expressed support for the appointment.

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All content in this article is for informational purposes only and does not in any way serve as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.