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prplhze2000
LSU Fan
Parts Unknown
Member since Jan 2007
49056 posts

FTX: No books, no employee rosters, FTX was piggy bank

The new CEO filed a report w/the bankruptcy court this morning. I read the filing. Here are some highlights.

quote:

Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.

FTX US is available to U.S. users and, according to statements by Mr. Bankman-Fried, had approximately one million users as of August 2022.

18. I have been provided with an unaudited consolidated balance sheet for the WRS Silo as of September 30, 2022, which is the latest balance sheet available. The balance sheet shows $1.36 billion in total assets as of that date. However, because this balance sheet was produced while the Debtors were controlled by Mr. Bankman-Fried, I do not have confidence in it, and the information therein may not be correct as of the date stated.

23. Alameda Research LLC prepared consolidated financial statements on a quarterly basis. To my knowledge, none of these financial statements have been audited. The September 30, 2022 balance sheet for the Alameda Silo shows $13.46 billion in total assets as of its date. However, because this balance sheet was unaudited and produced while the Debtors were controlled by Mr. Bankman-Fried, I do not have confidence in it and the information therein may not be correct as of the date stated.

46. Many of the companies in the FTX Group, especially those organized in Antigua and the Bahamas, did not have appropriate corporate governance. I understand that many entities, for example, never had board meetings.

50. The FTX Group did not maintain centralized control of its cash. Cash management procedural failures included the absence of an accurate list of bank accounts and account signatories, as well as insufficient attention to the creditworthiness of banking partners

56. ... As a practical matter, I do not believe it appropriate for stakeholders or the Court to rely on the audited financial statements as a reliable indication of the financial circumstances of these Silos.

57. The Debtors have not yet been able to locate any audited financial statements with respect to the Alameda Silo or the Ventures Silo.

58. The Debtors are locating and securing all available financial records but expect it will be some time before reliable historical financial statements can be prepared for the FTX Group with which I am comfortable as Chief Executive Officer. The Debtors do not have an accounting department and outsource this function.

the Debtors have been unable to prepare a complete list of who worked for the FTX Group as of the Petition Date, or the terms of their employment. Repeated attempts to locate certain presumed employees to confirm their status have been unsuccessful to date.

For example, employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis.

63. In the Bahamas, I understand that corporate funds of the FTX Group were used to purchase homes and other personal items for employees and advisors. I understand that there does not appear to be documentation for certain of these transactions as loans, and that certain real estate was recorded in the personal name of these employees and advisors on the records of the Bahamas.

65. The FTX Group did not keep appropriate books and records, or security controls, with respect to its digital assets. Mr. Bankman-Fried and Mr. Wang controlled access to digital assets of the main businesses in the FTX Group (with the exception of LedgerX, regulated by the CFTC, and certain other regulated and/or licensed subsidiaries). Unacceptable management practices included the use of an unsecured group email account as the root user to access confidential private keys and critically sensitive data for the FTX Group companies around the world, the absence of daily reconciliation of positions on the blockchain, the use of software to conceal the misuse of customer funds...

71. One of the most pervasive failures of the FTX.com business in particular is the absence of lasting records of decision-making. Mr. Bankman-Fried often communicated by using applications that were set to auto-delete after a short period of time, and encouraged employees to do the same.

Mr. Bankman-Fried, currently in the Bahamas, continues to make erratic and misleading public statements. Mr. Bankman-Fried, whose connections and financial holdings in the Bahamas remain unclear to me, recently stated to a reporter on Twitter: “F*** regulators they make everything worse” and suggested the next step for him was to “win a jurisdictional battle vs. Delaware



HoustonGumbeauxGuy
LSU Fan
Member since Jul 2011
26269 posts

re: FTX: No books, no employee rosters, FTX was piggy bank
And our government gave that bozo permission to operate an exchange





AUFANATL
Auburn Fan
Member since Dec 2007
2752 posts

re: FTX: No books, no employee rosters, FTX was piggy bank

Not to worry, the Bahamas equivalent of the SEC has promised to look into this - as soon as he finishes drinking rum at a cricket match and learns how to read.



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600
Post It Bandit
Oakland Fan
Boutte
Member since Mar 2008
2968 posts

re: FTX: No books, no employee rosters, FTX was piggy bank
Complete shitshow


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171
Realityintheface
USA Fan
Member since May 2022
1784 posts

re: FTX: No books, no employee rosters, FTX was piggy bank
Deserves life in jail. So does the Alemeda chick. I’m sure a few other top people deserve it as well.


fightin tigers
Downtown Prairieville
Member since Mar 2008
69096 posts
 Online 

re: FTX: No books, no employee rosters, FTX was piggy bank
You just don't get crypto /s


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450
prplhze2000
LSU Fan
Parts Unknown
Member since Jan 2007
49056 posts

re: FTX: No books, no employee rosters, FTX was piggy bank
Yup. Bernie did less.

Well, both Bernies did less.


roguetiger15
LSU Fan
Member since Jan 2013
14938 posts

re: FTX: No books, no employee rosters, FTX was piggy bank
quote:

Well, both Bernies did less.


Underrated comment Is underrated


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190
BigPerm30
Chicago Cubs Fan
Member since Aug 2011
21320 posts
 Online 

re: FTX: No books, no employee rosters, FTX was piggy bank
I guess they fricked me out of $1k.


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120
LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
32419 posts

re: FTX: No books, no employee rosters, FTX was piggy bank
Where did the new CEO come from?


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usc6158
Southern Cal Fan
Member since Feb 2008
32232 posts
 Online 

re: FTX: No books, no employee rosters, FTX was piggy bank
quote:

For example, employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis.



This is my favorite. Accounts payable via emoji.
This post was edited on 11/17 at 7:14 pm


usc6158
Southern Cal Fan
Member since Feb 2008
32232 posts
 Online 

re: FTX: No books, no employee rosters, FTX was piggy bank
quote:

Where did the new CEO come from?



He's the lawyer who oversaw the Enron bankrupcy. You can't make this up.


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230
Ghost of Colby
LSU Fan
Alberta, overlooking B.C.
Member since Jan 2009
7899 posts
 Online 

re: FTX: No books, no employee rosters, FTX was piggy bank
quote:

employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis.

Cartoon world using cartoon money


And I’m not knocking all of crypto currency. Many crypto insiders have long suspected FTX of being a giant shell game.


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90
SlowFlowPro
Stanford Fan
Simple Solutions to Complex Probs
Member since Jan 2004
399397 posts
 Online 

re: FTX: No books, no employee rosters, FTX was piggy bank
quote:

Account payable via emoji.


personalized emojis.


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131
danilo
Member since Nov 2008
16625 posts
 Online 

re: FTX: No books, no employee rosters, FTX was piggy bank
Bahamas Billionaire polyamory house of fricking


Chromdome35
Arkansas Fan
NW Arkansas
Member since Nov 2010
5455 posts

re: FTX: No books, no employee rosters, FTX was piggy bank
Unbelievable!!! This sounds exactly like what happens when you have a kid with no experience running a multi-billion dollar company.

Where were the regulators???


Bunk Moreland
Michigan Fan
Member since Dec 2010
45533 posts
 Online 

re: FTX: No books, no employee rosters, FTX was piggy bank
There is nothing new here for everyone who knows the basic story, but it's a good brief summary article/oral history.
Polyamorous geeks, psychopaths, and perhaps the greatest fraud in human history.


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80
deltaland
Mississippi St. Fan
Member since Mar 2011
80050 posts
 Online 

re: FTX: No books, no employee rosters, FTX was piggy bank
What’s amazing is he got away with it for so long with no audit.


Yet the IRS will show up to the owner of a local shop for an unreported cash deposit of 5k


USMEagles
Southern Miss Fan
Member since Jan 2018
11653 posts

re: FTX: No books, no employee rosters, FTX was piggy bank
quote:

Well, both Bernies did less.


Ebbers, Fine, Madoff, Sanders...


wileyjones
Member since May 2014
1662 posts

re: FTX: No books, no employee rosters, FTX was piggy bank
quote:

Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information
this coming from the guy who handled Enron


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