John J. Ray III, the chief executive officer of FTX, informed Congress that he believes Sam Bankman-Fried (the former CEO and founder of FTX) to have attempted to overwhelm the bankruptcy proceedings of the company. He specified, for this, he let the authorities in the Bahamas take out up to $100 million worth of crypto from the crypto exchange at the time when the platform was moving towards its crash.
John J. Ray III Claims SBF Sent Crypto Funds to Bahamian Authorities to Dump Bankruptcy Proceedings
While providing his testimony to the US House of Representatives Financial Services Committee, the CEO mentioned that it would be unmanageable to recoup the entirety of the losses of the consumers. Several of the consumers would be unable to get back their funds which have been lost by them, as per Ray. He additionally disclosed that the United States-based consumers would bear more charges.
However, the current CEO of the company altogether rejected the assertions of the previous one who claimed the complete liquidity of FTX.US. It was recently reported that Bankman-Fried had a strategy to frequently claim the solvency of FTX US for his speech to be narrated in front of the US Congress.
Ray refuted the claims of Bankman-Fried saying that the US-based subsidiary of the company still has a hole and it is not fully liquid.
Simultaneously, it was emphasized by the bankruptcy trustee that he considered that the US branch of FTX has a large number of consumers with considerably lesser trading volume than FTX.com (the parent platform). Nevertheless, the group of Ray has discovered just worth several hundred million dollars for the US company.
But, this verdict would not be the final because the private keys to the wallets of FTX US are still misplaced. The CEO asserted that the moment when they would find the respective keys they would expectedly obtain additional assets which would be contributed to the US silo. He clarified that deciding at this time would not be good choice because there is certainly a way to recover them.
Up till now, the US trustee did not provide any information on if a fund commingling took place between the international company, FTX.US, and Alameda. He was of the view that they are continuously looking into the matter however presently they do not have an accurate answer in this regard. Apart from that, it was claimed by Ray that a cumulative $1B value of assets has been obtained.
SEC Accuses FTX Founder of Defrauding Clients from the Beginning
Nonetheless, the creditors in the majority do not belong to the United States. That is why, he added, the respective procedure will require some weeks to months for its accomplishment. The US Securities and Exchange Commission (SEC) additionally issued a filing recently, accusing that the consumer funds were being stolen by the FTX founder from day one until the crypto exchange crashed completely.
As elaborated by the new CEO of the exchange, up to $7B worth was lost during the respective crash. As mentioned in the copy of Bankman-Fried’s intended testimony – which he was to be presented in front of Congress – John Ray as well as the group thereof supposedly jeopardized the US-based clients by making FTX US a part of the bankruptcy proceedings.
Tom Emmer, a congressman who has long been a crypto supporter, has invited Gary Gensler (the CEO of the SEC) to provide his testimony before Congress. In the words of the congressman, the SEC chair must provide answers over the regulatory failures of the agency due to which they could not catch such a grand event.