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FTX used company funds to buy worker houses, new submitting reveals

The brand of FTX is seen on a flag on the entrance of the FTX Area in Miami, Florida, November 12, 2022.

Marco Bello | Reuters

Company funds have been used to buy houses within the Bahamas and “private objects” within the identify of workers and advisors of FTX, a chapter declaration mentioned, days after the penthouse residence of founder Sam Bankman-Fried was listed for practically $40 million.

It isn’t instantly clear what the supply of these company funds was.

In a declaration to the courtroom, newly appointed FTX CEO John Ray III mentioned {that a} lack of disbursement controls meant accounting for spending was executed in a manner that was not “applicable for a enterprise enterprise.”

Company housing preparations usually are not uncommon, particularly in high-cost areas, however Ray’s submitting famous that “sure actual property was recorded within the private identify of those workers and advisors,” a nontypical association.

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A penthouse residence in the identical non-public complicated that Bankman-Fried and different FTX executives lived in was listed for just below $40 million just a few days in the past. The penthouse has been widely reported as having belonged to the onetime billionaire and FTX founder.

In the identical submitting, Ray excoriated the former executive‘s workforce for a “full lack of monetary controls,” saying that he didn’t believe within the stability sheet statements of FTX’s firms.

Auditing for one of many FTX company verticals – what Ray known as “Silos” – was executed by Prager Metis, a agency with “which I’m not acquainted,” Ray wrote.

Bankman-Fried wasn’t instantly out there for remark. Prager Metis didn’t instantly reply to a request for remark.

Ray, who oversaw Enron’s chapter proceedings and restructuring, declared he had 40 years of expertise within the chapter and company area.

“The Debtors do not need an accounting division,” Ray wrote, stating he anticipated it could be “a while” earlier than dependable monetary statements may very well be ready.

FTX and affiliated firms, together with Alameda Analysis, Bankman-Fried’s crypto buying and selling agency, filed for Chapter 11 bankruptcy protection earlier this month.

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