Auditor in metric. No proper tracking of cash or employees. FTX’s new CEO describes Sam Bankman-Fried’s erratic management.

“I have never seen such a failure of corporate controls and lack of reliable financial information as here in my career. From compromised system integrity and flawed regulatory oversight overseas, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”

That unvarnished deal is from John Ray, FTX’s new chief executive, in a filing with the US Bankruptcy Court for the District of Delaware.

Ray, it should be emphasized, has more than 40 years of legal and restructuring experience, including leading the collapsed energy company Enron in 2001.

The filing highlights the erratic management of Sam Bankman-Fried, the former CEO. According to Ray, there was no accurate list of bank accounts and account signatories, much less attention to the creditworthiness of the banking partners. The current estimate is that FTX has $564 million in cash.

“Bankman-Fried often communicated using applications that were set to auto-destruct after a short period of time, and encouraged employees to do the same,” Ray said.

Ray said software was used to hide the misuse of customer funds, and that Alameda, the hedge fund arm, was secretly exempt from its auto-liquidation protocol.

Corporate funds were used to purchase houses, and other personal items, at FTX’s Bahamas headquarters. Some of the real estate was recorded in the personal names of employees and consultants in the records there, Ray said.

Ray dryly notes that Prager Metis, the non-US exchange arm of’s auditor, “is a firm I’m not familiar with whose website indicates they are the first CPA firm to open its Metaverse headquarters to official. in the Decentraland metaverse platform.’” He said he has “substantial concerns” about that audit.

Alameda, the hedge fund branch, has no audited financial statements. FTX venture capital investments don’t have that information either.

Ray added that human resources records are not good enough to know who even worked there.

The filing also says Bankman-Fried is in the Bahamas. The former executive refused in several interviews with the media, as well as posts on social media, to identify his whereabouts. Ray said Bankman-Fried’s comments were “misleading and misleading.”

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