FTX: Crypto exchange’s new chief has ‘cavalier attitude to truth’ – regulator
Crypto exchange FTX and its new boss has been accused of having a “cavalier attitude towards the truth” and failing to cooperate with authorities during bankruptcy proceedings.
FTX, founded by disgraced former billionaire Sam Bankman-Fried, imploded in November after allegedly dishing out billions of dollars of customers’ cash to its sister trading firm Alameda Research.
The crypto bourse ousted Bankman-Fried as its boss and called in seasoned bankruptcy veteran John Ray to manage the winding up of the firm.
However, the Securities Commission of The Bahamas, where FTX is headquartered, slammed the new FTX chief last night and criticised what it called “material misstatements” made by the firm after FTX publicly challenged the value of assets the watchdog had seized.
“Such public assertions by the Chapter 11 Debtors were based on incomplete information,” the regulator said.
“The Chapter 11 Debtors chose not to utilise their ability to request information from the Joint Provisional Liquidators pursuant to a court order of the Supreme Court of The Bahamas that the Commission obtained in an effort to allow the Chapter 11 Debtors to obtain this information.”
The regulator added that the firm’s “continued lack of diligence when making public statements” was “disappointing” and reflected a “cavalier attitude towards the truth and towards the Bahamas”.
Ray had made misleading statements “without evidence” and under oath and was eroding trust in the authority in the watchdog without evidence to support his claims, the regulator claimed.
“Such unfounded statements have the impact of promoting mistrust of public institutions in The Bahamas,” officials said in the statement.
War of words
The barbs from the regulator come after it claimed to have seized $3.5bn (£2.9bn) of assets from FTX and planned to repay burnt creditors and customers of the firm.
The regulator was prompted to double down on its valuation yesterday after FTX publicly challenged the value of the assets seized.
Customers of FTX are looking to recoup billions of dollars of lost cash, while its former top chiefs are facing lengthy stretches behind bars.
Alameda chief executive Caroline Ellison has already pleaded guilty to seven offences including wire fraud and money laundering, and is now cooperating with authorities.
FTX’s 30-year old founder Bankman-Fried was extradited to the US in December where he was freed after posting a $250m bond. He is expected to enter a not guilty plea today to criminal charges today, Reuters reported.