FTX’s bankruptcy hearing was held today. The exchange’s lawyers acknowledged that there had been mismanagement within the company.
FTX’s new CEO has formed an investigation team to track down and secure company assets. FTX’s lawyers have detailed the misappropriation funds for the purchase millions of dollars worth real estate. Today was the first bankruptcy hearing for FTX, a Bahamas-based crypto exchange. The judge was provided with a detailed account by lawyers from Sullivan Cromwell who represented the bankrupt crypto exchange.
The proceedings were opened by the presiding judge granting the debtor’s motion for the seal of documents relating to information about the top 50 creditors. The judge said that this approval was temporary, and would likely be lifted quickly.
FTX attorneys highlight SBF’s poor leadership
Sam Bankman-Fried’s lawyers did not shy away from revealing details about the substandard administration that led to the collapse of the once-world’s second-largest cryptocurrency trading platform.
Adam Landis, Sullivan Cromwell, referred to this case in a “different kind of animal”. Landis then revealed the shortcomings of the former CEO during the period leading up to the bankruptcy of the exchange. This led to “resignation across the ranks”. The lawyers also acknowledged that the company had compromised financial records and unreliable financial records, making it vulnerable to hackers.
The attorney stated that there were significant amounts of money that were not related the business.
One of the entities associated to FTX indulged in a real-estate shopping spree as a result of the misappropriation. According to reports, the firm spent $300 million on vacation homes and residential properties in the Bahamas.
FTX’s lawyers briefed the judge about the efforts of the new management to track down and secure the company’s assets. John Ray III, the new CEO, Chief Restructuring Officer, has assembled a team that includes Jamie McDonald, former head for enforcement at CFTC, and Steve Pecan, an ex-SEC Director of Enforcement. Chainalysis, an on-chain intelligence company, has been brought in to assist the investigation.