The top executive for the collapsed cryptocurrency exchange FTX told members of a congressional committee on Tuesday morning that the company collapsed because of “old fashioned embezzlement” and that he has never seen such poor documentation in his career.
- Who is testifying?: John J. Ray III, who took over as CEO Nov. 11, has spent his 40-year career handling insolvency cases, including managing Enron through its bankruptcy caused by accounting fraud.
- FTX lost billions, Ray said: Ray said Tuesday he does not find any statements that the alleged fraud happened by mistake credible, that his team continues to search for customer wallets to recover their money, and that FTX lost at least $7 billion, but the final number remains to be seen.
- What happened to FTX? FTX collapsed in early November and filed for bankruptcy when it was unable to pay back customers. The company has said it owes more than 100,000 people, but expects that number to grow to more than 1 million.
- SBF indicted: Federal prosecutors on Tuesday unsealed an eight-count criminal indictment against disgraced exchange founder Sam Bankman-Fried, alleging crimes all the way up to money laundering. The Securities and Exchange Commission and the Commodity Futures Trading Commission also filed civil complaints.
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