FTX's New CEO: It Could Take Months to Track Down the Company's Assets

https://markets.businessinsider.com/news/currencies/ftx-new-ceo-could-take-months-track-down-company-assets-2022-12

FTX's new chief executive officer John Ray said it could take months to secure all the company's assets following its abrupt collapse.

"We've been able to secure over $1 billion of assets to cold wallets in a secure location," Ray said in his testimony to the House Financial Services Committee on Tuesday.

He added: "It's an ongoing process. [It] will take weeks if not months to secure all the assets."

Ray, who has been FTX's new chief executive since Bankman-Fried resigned last month, served as chairman of Enron and steered the energy company through bankruptcy in the early 2000s.

FTX filed for bankruptcy protection last month amid a severe liquidity crunch. Customers with money in accounts on the exchange were unable to withdraw their funds, with the event vaporizing billions of dollars essentially overnight. 

US prosecutors are accusing Bankman-Fried of orchestrating a years-long scheme to defraud investors, according to an SEC complaint on Tuesday.

"We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto," SEC Chair Gary Gensler said in a statement.

Securing assets may be prolonged because of FTX's lack of internal accounting before the company filed for bankruptcy, Ray said.

"I've just never seen an utter lack of record keeping. Absolutely no internal controls whatsoever," Ray said.

FTX employees would communicate invoicing and expenses via Slack, according to Ray, and also used QuickBooks, an accounting software geared towards smaller businesses.

"[The case is] unusual in the sense that literally, you know, there was no record keeping whatsoever," Ray said. "Nothing against QuickBooks, it's a very nice tool, just not for a multibillion dollar company."

Bankman-Fried was also scheduled to testify on Tuesday, but was arrested in the Bahamas on Monday night. The fallen exec reportedly planned to tell US lawmakers that he "fucked up," according to a written testimony obtained by Forbes.

"This testimony is so disrespectful," Rep. Emanuel Cleaver, a member of the House Financial Services Committee, said in reference to Bankman-Fried written remarks.