Crypto News

Scathing Report on FTX Control Failures Released by Debtors

Scathing Report on FTX Control Failures Released by Debtors
© Copyright Image: CryptoPotato

On April 9, FTX Trading and its affiliated debtors released their first report on the control failures at the embattled exchange.

It details the lack of risk management, inadequate record keeping, poor cyber security, and Sam Bankman Fried’s overreaching role in any decision-making.

The report is based on the debtors’ review of terabytes of electronic data and communications and more than a million documents, according to the announcement. It also includes interviews conducted with 19 former FTX employees, among other information, it added.

On April 10, industry researcher Colin Wu noted that engineering director Nishad Singh “changed the code base to allow Alameda to withdraw unlimited amounts of crypto assets from FTX.” A week later, it was alleged that he modified it “to exempt Alameda from automatic liquidation.”

Down the FTX Rabbit Hole

Furthermore, there was a lot of dependence on just a few executives, according to the report. One said, “If Nishad [Singh] got hit by a bus, the whole company would be done. Same issue with Gary [Wang].” Gary Wang was the company’s chief technology officer. Both are currently cooperating with authorities, having pled guilty to charges.

The report also heavily chastised Alameda, the research and investment division of FTX. In internal communications, SBF, who remains under house arrest, had previously said Alameda was essentially “unauditable,” referring to a lack of information and understanding of its balances and transactions.

FTX CEO John Ray III noted that FTX Group “failed to implement appropriate controls in areas that were critical for safeguarding cash and crypto assets” before adding:

“FTX Group was tightly controlled by a small group of individuals who falsely claimed to manage FTX Group responsibly, but in fact showed little interest in instituting oversight or implementing an appropriate control framework.”

In late March, CryptoPotato reported that the European division of FTX had resumed withdrawals for customers.

Crypto Market Outlook

Crypto markets have made and held marginal gains over the weekend. Total capitalization was at $1.23 trillion during the Monday morning Asian trading session.

Bitcoin tapped $28,500 a few hours ago before retreating slightly, and Ethereum was trading flat on the day at around $1,850 at the time of writing.

Crypto markets have been trading in a tight channel for the best part of the past month.

The post Scathing Report on FTX Control Failures Released by Debtors appeared first on CryptoPotato.

Read more: https://cryptopotato.com/scathing-report-on-ftx-control-failures-released-by-debtors/

Text source: CryptoPotato

Disclaimer: Financial information and news are not financial advice, read the disclaimer.
Buy & sell Crypto in minutes

Join BINANCE!

The world's largest crypto exchange

You're just steps away from receiving your reward.

The most complete Crypto News Center.

Search Stories:

Latest top stories