by Luc Olinga at The Street
The news will cause unprecedented anger among customers of FTX, which filed for bankruptcy on November 11.
The cryptocurrency exchange, which was still valued at $32 billion in February, imploded overnight.
This debacle is spreading to other cryptocurrency exchanges. Regulators have opened investigations. FTX clients and investors began to establish their losses. It is not certain that they will recover their money.
To help them understand what happened, John Ray, the liquidator of energy broker Enron, has just painted a picture of founder Sam Bankman-Fried’s empire and how it worked. This description is an indictment of the Bankman-Fried years and his two associates Zixiao “Gary” Wang and Nishad Singh.
Ray, a veteran of restructurings, believes they have failed on many levels. For example, he has just revealed that company funds were used by employees and advisors to buy houses in the Bahamas in their own name.
In other words, it is almost impossible to claim these homes back because they are not in the name of the company. Ray also indicates that there is no record of these transactions.
“In the Bahamas, I understand that corporate funds of the FTX group were used to purchase homes and other personal items for employees and advisors,” Ray wrote in a 30-page document filed with the United States Bankruptcy court for the District of Delaware.
“I understand that there does not appear to be documentation for certain of these transactions as loans, and that certain real estate was recorded in the personal name of these employees and advisors on the records of the Bahamas,” he added.
Ray also said that FTX did not keep “appropriate” books and records, or security controls, with respect to its digital assets.
He further indicated that to be reimbursed for professional expenses…Continue Reading