FTX’s new CEO says there is an opportunity for a stock market reboot • MastStatus

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As FTX news waned in recent weeks, the crypto exchange’s new CEO shared that he is exploring the possibility of rebooting the company, according to a report from The Wall Street Journal.

John Ray III, FTX’s new CEO, said in an interview that “everything is on the table” regarding reviving the bankrupt company’s international exchange and has created a task force to explore that possibility.

WSJ also reported that Ray is exploring whether reviving the main international exchange would bring more value to the company’s customers and creditors as he and others try to repay lost funds.

Earlier this week, FTX debtors identified $1.7 billion in cash and $3.5 billion in crypto assets and $3 million in securities, according to a company statement. This totals about $5.5 billion in cash, which Ray called a “massive” effort to assess the company’s financial position.

“We are making significant progress in our efforts to maximize recovery, and it has taken a massive investigative effort from our team to uncover this preliminary information,” Ray said in a statement Tuesday. “We ask our stakeholders to understand that this information is still preliminary and subject to change. As soon as we are able to do so, we will provide additional information.”

The accounts receivable also provided context to both the international and US-based entities of FTX and its shortcomings. Debtors identified $1.6 billion in digital assets related to the international exchange, FTX.com, of which $323 million was the subject of unauthorized transfers by third parties after it filed for Chapter 11 bankruptcy in November. Approximately $426 million was transferred to cold storage under the control of the Securities Commission of the Bahamas, $742 million was transferred to cold storage under the control of FTX debtors and $121 million is pending transfer to the debtors, according to the release.

Meanwhile, debtors identified $181 million in digital assets associated with the US-based entity, FTX US. About $90 million was subject to unauthorized transfers from third parties following the bankruptcy filing, $88 million is in cold storage under FTX accounts receivable and $3 million is awaiting transfer to accounts receivable, it added.

Ray and former FTX CEO Sam Bankman-Fried have come to disagree over the position of the exchange and whether or not it should have filed for bankruptcy. Bankman-Fried has shared his regret in filing for bankruptcy for FTX, saying in a recent Substack newsletter that Bankman-Fried insisted that if he hadn’t been “forced” to file bankruptcy, the company would have been able to to pay back all its customers.

Bankman-Fried added, “There were numerous potential funding offers, including signed LOIs after Chapter 11 filing totaling more than $4 billion. I believe that if FTX International had been given a few weeks, it probably could have used its illiquid assets and equity to raise enough funding to make customers substantially healthy.

In the past, Ray said that Bankman-Fried has “no ongoing role at FTX” and does not speak on behalf of the company. In mid-December, Ray said at a meeting of the US House Financial Services Committee that there were “virtually no internal controls” over FTX’s risk management systems.

There were no audits of Alameda or its corporate silo. But there were audits from FTX US and FTX.com, Ray said. The audits were performed by Prager Metis and Armanino. “I can’t comment on the integrity or quality of those audits,” Ray said. “I don’t trust any piece of paper in this organization.”

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