John Ray claimed there was a “massive scramble for information” concerning the exchange’s money, insurance, and staff when he took over FTX in November 2022.
John Ray, who assumed control of FTX’s operations as CEO, has detailed some of the tumultuous events that occurred there following the company’s filing for bankruptcy.
In testimony for FTX’s case in the United States Bankruptcy Court for the District of Delaware on February 6, Ray claimed that because the company lacked a physical presence, he and other experts had been “seriously” looking into FTX’s operations.
The FTX CEO appeared to be resisting a request to choose an impartial examiner for the bankruptcy case, arguing that “inadvertent errors” could lead to the loss of “hundreds of millions of dollars of value.”
Ray claims that there was a “massive scramble for information” when he took over FTX in November 2022 because there was “not a single list of anything” pertaining to bank accounts, income, insurance, or people.
The FTX CEO claimed there were numerous efforts to steal cryptocurrency on the same day he assisted in filing a Chapter 11 bankruptcy petition, which prompted security specialists and liquidators to act swiftly to recover cash.
“Your normal first-day petition is chaotic as sometimes can be — this was something that I have never experienced,” said Ray. “Those hacks went on virtually all night long […] It was really 48 hours of what I can only describe as pure hell.”
The CEO of FTX asserted that prior to taking over the company, he had no relationship with any former exchange leaders, including Caroline Ellison, CEO of Alameda Research, Gary Wang, co-founder of FTX, and Sam Bankman-Fried, former CEO of the exchange, or his parents. Ray claimed that anyone “in a control position” under Bankman-Fried was no longer able to make decisions on behalf of the FTX corporation.
Ray’s testimony occurred in the midst of a motion from the Office of the U.S. Trustee asking the court to appoint an impartial examiner who would publish a report informing the public about the bankruptcy proceedings. Although Ray had no connection to Bankman-Fried prior to taking over as CEO, Juliet Sarkessian, speaking on behalf of the U.S. Trustee’s office, suggested that the appointment of an examiner was still in the public interest.
During the hearing on February 6, Judge John Dorsey deferred making a decision in favor of allowing counsel for each side to consider a “consensual resolution” to the problem.
Debtors and interested parties will file motions regarding the company’s assets, look into FTX, and divulge material that could have an impact on Bankman-criminal Fried’s prosecution as part of the continuing bankruptcy processes. On February 1, the legal team representing FTX debtors requested that subpoenas be issued to Bankman-close Fried’s relatives for information and documents.