The FTX logo is seen on a banner at the entrance to the FTX Arena in Miami, Florida on November 12, 2022.
Marco Bello | Reuters
Corporate funds were used to buy residences in the Bahamas and “personal effects” in the names of FTX employees and advisers, a bankruptcy filing said days after founder Sam Bankman-Fried’s penthouse was listed for nearly $40 million.
It is not clear what the source of these corporate funds is.
In a statement to the court, newly appointed FTX chief executive John Ray III said the lack of control over the payout meant the cost accounting was done in a way that was not “appropriate for a business enterprise”.
Corporate housing arrangements are not uncommon, particularly in high-cost areas, but Ray’s document notes that “some real estate is recorded in the personal name of these officers and advisors,” an atypical arrangement.
A maisonette in the same private complex where Bankman-Fried and other FTX executives lived was listed for just under $40 million a few days ago. The maisonette was widespread having belonged to the erstwhile billionaire and founder of FTX.
In the same statement, Ray chided the former CEO’s team for a “complete lack of financial control,” saying he had no confidence in the balance sheets of the FTX companies.
The audit for one of FTX’s corporate verticals — what Ray calls “Silos” — was performed by Prager Metis, a firm “I’m not familiar with,” Ray wrote.
Bankman-Fried was not immediately available for comment. Prager Metis did not immediately respond to a request for comment.
Ray, who oversaw the bankruptcy and restructuring of Enron, said he has 40 years of experience in the bankruptcy and corporate space.
“The debtors have no accounting department,” Wray wrote, saying he expected “some time” before reliable financial statements could be prepared.
FTX and related companies, including Alameda Research, Bankman-Fried’s crypto trading firm, filed for Chapter 11 bankruptcy protection earlier this month.