heard Tuesday by a committee of the House of Representatives, the new manager of the cryptocurrency exchange, John Ray III, returned to the shortcomings of the company, directed according to him by a “small group of individuals Roughly inexperienced “.
by Louis Adam
“Never in my career I have seen such a total failure of corporate controls at all levels of an organization.” John Ray III, the new manager of the Cryptomonnaie Exchange FTX FTX , nevertheless saw others: specializing in perdition companies, he made himself known for having ensured the liquidation of the American energy giant Enron, in the early 2000s.
But before the Financial Affairs Committee of the House of Representatives of the United States, Tuesday, December 13, he did not mince his words to expand the previous governance of the company founded by Sam Bankman-Fried, says SBF. In charge of ensuring the restructuring of the company, John Ray III resumed the reins of the FTX group on November 11, following the placement of the company under the regime of chapter XI of the American law, which supervises the bankrupt businesses .
stored without encryption
Faced with the questions of the members of the committee, the leader recalls that he has only been at the head of the group for four weeks and that the investigations will continue for more weeks or even months. But he still already confirms several of the accusations previously published in the press on the lack of safeguards put in place by the management of FTX to avoid the embezzlement:
“The collapse of the FTX group seems to result from the absolute concentration of control in the hands of a very small group of roughly inexperienced individuals, who have not implemented any of the systems or controls required for a company to which the money or assets of other people are entrusted. “
More specifically, John Ray III stresses that the company’s IT tools allowed managers to directly access the funds deposited by customers, “without any security check preventing them from diverting the funds”. He also explains that certain safety keys used to protect several hundred millions of dollars in cryptocurrencies were stored without encryption or without special protection measure. He also confirms that the trading company Alameda, also founded by Sam Bankman Fried, had the capacity to borrow funds belonging to the American subsidiary of FTX to carry out its financial operations, and this in a “unlimited” manner, in particular in borrowing funds deposited by FTX customers.
By the way, the new boss of FTX notes that the American subsidiary of the company, FTX.US, was not led as independently as what his predecessors had suggested. “Publicly, there was a distinction, he recognizes. But in fact, the digital assets of the two subsidiaries were hosted in the same infrastructure.”
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