FTX's new CEO is now making $2,000 an hour

FTX’s new CEO is now making $2,000 an hour

Failed cryptocurrency exchange FTX has revealed that it owes its top 50 creditors a staggering US$3.1 billion (AUD4.65 billion).

And to its top 10 creditors, FTX owes about $1.45 billion, according to a court filing filed Saturday, Reuters reported.

It is believed that there could be more than a million creditors in total and the total amount owed by the company will be much higher.

The whopping figure is the latest in a series of revelations that the crypto platform has been doomed by its founder Sam Bankman-Fried.

At its peak, the company was valued at US$32 billion (US$47 billion) and Mr. Bankman-Fried was hailed as a genius, with his face on the covers of many magazines and at business events to share his tips for success. It’s worth absolutely nothing now.

That’s because earlier this month FTX filed for Chapter 11 bankruptcy along with around 130 related companies, including controversial trading firm Alameda Research, which is said to have played a central role in last week’s implosion.

Among other things, Mr. Bankman-Fried is said to have used billions of dollars in customer funds for his trading company Alameda Research, which is currently under criminal investigation by several police forces.

The firm’s US-appointed liquidator, John Ray, said he had never seen such a failure at running a company.

And according to court documents, Ray is now technically the new CEO of FTX and is paid $1,300 (1946 AUD) for every hour he works.

In a filing with the US Bankruptcy Court, FTX stated that “the debtors are paying a current rate of $1,300 per hour plus reasonable out-of-pocket expenses billed at least monthly” to Ray.

At the time of writing, Ray said he was owed $20,000 for his work to date. This would be offset against a $200,000 advance he had received from creditors.

Ray has 40 years of bankruptcy experience but said he’s never seen anything as bad as FTX.

“Never in my career have I witnessed such a complete failure of corporate controls and a complete lack of trustworthy financial information as here,” he wrote in an affidavit filed with a US court.

“From the compromised system integrity and flawed regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, inexperienced and potentially vulnerable individuals, this situation is unprecedented.”

Ray previously covered the collapse of energy giant Enron, which was once the seventh largest in the US but went bankrupt under the weight of years of illegal dealings and accounting tricks, imprisoning its chief executive.

Ray said that a “significant portion” of the assets held by the crypto exchange could be “missing or stolen.”

FTX is said to have secretly transferred up to $10 billion ($14.8 billion) in customer funds to Alameda to fund risky cryptocurrency deals ahead of the collapse, which came after rumors of a liquidity crunch led to it Customers rushed to withdraw their money.

Another $600 million was siphoned from FTX’s digital wallets the same day it filed for bankruptcy, with Bankman-Friend claiming it was “hacked.”

Company officials said “unauthorized transactions” had taken place on FTX, with CoinDesk reporting that a whopping $600 million ($895 million) mysteriously leaked from the exchange’s wallets.

Some customers have reported having $0 balance after their funds were withdrawn.

Some suggested the sophistication of the hack hinted at a possible inside job, and others pointed out that the timing was odd since it happened on the same day the exchange went bust.

In Australia, KordaMentha was appointed voluntary administrator of the local FTX subsidiary on Friday, with around 30,000 customers hoping to get their money back.

The Bahamas Supreme Court appointed PwC as temporary liquidators to oversee FTX’s assets.

A Bahamian liquidators’ filing found that “the evidence to date indicates that there may have been serious fraud and mismanagement at the company.”

On Tuesday, a group of crypto investors filed a class action lawsuit against Bankman-Fried and others who promoted FTX.

The US law firm in Manhattan is investigating whether FTX misappropriated client funds by lending billions of dollars to a separate trading firm set up by Bankman-Fried.

Bankman-Fried has conducted multiple media interviews and authored multiple tweets defending FTX, claiming it is still solvent, which attorneys say will undermine its defense.

Bankman-Fried and his former partner Caroline Ellison were reportedly part of a Group of 10 running FTX and its sister cryptocurrency trading firm Alameda Research from a “luxury penthouse” in the Bahamas.

Ellison, the CEO of Alameda Research, admitted to “regular use of amphetamines” in an April 2021 tweet, while Mr. Bankman-Fried has been open about his experimentation with Adderall and other stimulants.

A viral video on Alameda’s trading shows Ellison saying she “could absolutely do it without my math degree.” “They use very little math — they use a lot of elementary school math,” she said.

There were also allegations that a free-ranging 10-person “sexual polycule” in the luxurious penthouse in the Bahamas served as the headquarters of the doomed operation.

According to a bombshell report from CoinDesk, Ellison and Bankman-Fried were part of a “cabal of roommates” who ran the crypto empire and “dated” while living in a $40 million penthouse in the upscale Albany resort in the Bahamas lived.

Many of the 10 roommates, including Ellison, are former employees of Bankman-Fried’s trading firm Jane Street, while he met others at the Massachusetts Institute of Technology.

Also living in the house were Gary Wang, FTX’s co-founder and chief technology officer, and Nishad Singh, director of engineering. “All 10 are or were previously linked in romantic relationships,” CoinDesk reported.

The site said it spoke to several current and former employees of FTX and Alameda on condition of anonymity. She quoted a source as saying, “The entire operation was run by a gang of kids in the Bahamas.”

— With Sarah Sharples and Frank Chung

#FTXs #CEO #making #hour

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