John Ray III, has made a shocking claim after taking over the helm of collapsed crypto exchange FTX. He claims that the new leadership has recovered the exchange's $1 billion worth of assets.
Ray testified with the US House Committee on Financial Services on Tuesday, about the collapse of the FTX exchange.
He is considered a competent bankruptcy expert who oversaw the outcome of the collapsed energy giant, Enron.
New CEO Tries to Secure and Trace More Funds
"We are working with some high-profile crypto research companies to secure and trace as many funds as possible," said Ray.
Among the crypto research firms that have been approached are BitGo, Alvarez & Marsal, and Chainalysis.
To date, with the help of these companies, they have secured over $1 billion in digital assets to protect against the risk of theft or unauthorized transfer.
There was an absolute financial and other record-keeping failures showed by FTX exchange, which caused difficulty in tracing funds, revealed by Ray.
Ray further disclosed that FTX acquired QuickBooks, an accounting software package for record keeping aimed at small and medium-sized businesses.
According to reports, Ray shared his remarks and claims about the FTX exchange in his testimony.
Main Reasons behind the FTX Collapse
FTX’s downfall was due to the concentration of control in the hands of a very small group of unsophisticated and highly inexperienced individuals.
They seem to be unaware of the controls and the systems required for running a multi-billion firm. He added that we are working 24 hours a day to locate and secure estate properties.
Due to the failure of proper record keeping, a substantial portion of estate properties may be misused, missing, or not readily traceable.
Ray also observed that while FTX and Alameda Research were going to operate as separate companies, the biggest issue around them was mixed-up user funds.
This means it allowed Alameda Research to use FTX users' funds and furthermore, they made risky financial bets on them.
Ray shed further light on the lack of documentation for the transactions of 500 investments of investors with FTX Group.
He also said that there are other problems such as lack of financial and risk management personnel and absence of audited or reliable financial statements.
Charges against FTX Founder Bankman-Fried
The US prosecutors had recently filed independent criminal charges against Sam Bankman-Fried. As a result, the Bahamas law enforcement authorities arrest SBF on Monday.
Media reports say, according to the government of the Bahamas, the United States has demanded SBF be handed over to them.
Reports also claim that New York’s Southern District has confirmed the arrest, which is investigating the FTX collapse.
