Benzinga - A report by FTX Trading Ltd. debtors has revealed that the failed crypto exchange lacked fundamental financial and accounting controls, leading to the loss of billions of dollars in customer funds.
The report suggests that the collapse of FTX was due to "hubris, incompetence, and greed" on the part of former CEO Sam Bankman-Fried and other top executives.
The report further emphasizes the company's inadequate supervision and management, as a limited number of individuals govern the business with a minimal inclination toward implementing suitable controls.
The report describes how these individuals commingled and misused corporate and customer funds, joked internally about losing track of millions of dollars in assets, and stifled dissent.
John J. Ray III, FTX's new CEO, and CRO said in a press release, "We are releasing the first report in the spirit of transparency that we promised since the beginning of the Chapter 11 process."
Also Read: BRICS World Currency Takeover: Is This The End Of Traditional Money?
The report states that despite asset levels of billions of dollars and enormous transaction volumes, FTX "lacked fundamental financial and accounting controls."
However, the report notes that digital assets worth more than $1.4 billion have been recovered and secured in cold storage, and an additional $1.7 billion has been identified and is in the process of being recovered.
The debtors reviewed over one million documents and analyzed the available financial records and electronic devices of the cryptocurrency firm, as well as interviewed 19 employees to put together the overview of FTX's control failures.
Bankman-Fried is set to stand trial in October, having pleaded not guilty to charges of fraud and violations of campaign-finance laws.
The former engineering director Nishad Singh and former CEO Caroline Ellison pleaded guilty to charges in connection with their roles at FTX and its sister trading house Alameda Research and are working with prosecutors.
Read Next: DOGE's Dramatic Dive After Twitter Logo Reversal: Has The Meme Coin Bubble Burst?
Photo: Shutterstock
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.