- The new CEO said FTX employees claimed their expenses through chat messages.
- John Ray added that random moderators would then approve official claims using the personalized emoji.
- In his creditor filing, Ray said FTX failed to keep contact, employment and financial records.
Employees of cryptocurrency exchange FTX will file expense claims through chat messages, and random managers will approve claims by responding with emojis, the company’s new CEO said in court filings.
New CEO John Ray said FTX employees submitted payment requests to a “disparate group of moderators,” who would approve the expense “by responding with a personalized emoji,” which illustrates FTX’s bankruptcy filing Thursday.
“The debtors didn’t have the kind of exchange controls that I think would be appropriate for a commercial enterprise,” Ray said.
Ray, a lawyer who also oversaw the bankruptcy of energy giant Enron, has been called in to lead the restructuring of FTX. The exchange filed for bankruptcy on November 11.
“Never in my career have I seen such a complete failure of corporate controls and such complete absence of trustworthy financial information as here,” Ray said.
He criticized FTX executives and former CEO Sam Bankman-Fried, saying they also failed to keep records of their communications when they made decisions, among a series of other allegations of mismanagement.
“One of the most pervasive failures in the FTX.com business in particular is the lack of permanent records of decision making,” Ray said in the filing. “Mr. Bankman-Fred often communicated using apps that were set to auto-delete after a short period of time.”
He added that Bankman-Fried would encourage employees to use the same chat software.
Ray said FTX “never holds board meetings” and that the exchange used employees’ personal names to buy real estate in the Bahamas with corporate money.
He also said that FTX did not keep proper records of who it hired. “Repeated attempts to locate some of the supposed employees to confirm their status have so far been unsuccessful,” he said, noting that some of these workers may not have been there at all.
Ray Bankman in particular criticized Fried, saying that the exchange’s co-founder “continues to make misleading and misleading public statements.” He highlighted a Vox report that alleged that Bankman-Fried sent a DM to reporter Kelsey Piper saying “fuck the regulators,” and that they were “making everything worse.”
Bankman-Fried resigned on November 11, the same day FTX filed for bankruptcy. His trading company, Alameda Research, and about 130 affiliated companies have initiated bankruptcy proceedings.
Before the FTX implosion, the company was slated to be acquired by rival cryptocurrency exchange Binance. But she backtracked, citing findings during the due diligence process and concerns about federal investigations into FTX.
FTX and Bankman-Fried did not immediately respond to Insider’s requests for comment.
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