FTX bosses joke about losing millions of dollars, damning report claims

Former FTX CEO Sam Bankman-Freed is accused of fraud in connection with the collapse of a bankrupt cryptocurrency exchange. Photo: David Di Delgado/Reuters

FTX bosses joked about losing tens of millions of dollars and signed expenses with emojis, according to the official statement about the collapse of the cryptocurrency exchange.

Founder Sam Bankman-Fried and senior executives are accused of «arrogance, incompetence and greed» in a 39-page report published by FTX restructuring experts.

The tight-knit group of individuals «cracked down dissent, mixed and misused corporate and customer funds, lied to third parties about their business, internally joked about their propensity to lose millions of dollars of assets,» the report said.

It said, that Mr. Bankman-Fried stated that FTX Alameda Research's trading division «hilariously exceeded any threshold at which any auditor can even partially pass an audit.»

According to the report, Mr. Bankman-Fried said, “Alameda is not auditable. I don't mean «a big accounting firm will object to having it audited»; I mean it in the sense that «we can only roughly estimate its balance, not to mention something like a comprehensive transaction history.»

«Sometimes we find assets worth 50 million dollars, which we lost out; such is life.”

1511 FTT to US dollars.

The report goes on to say that the money transfers were not properly documented.

It states: “Worse still, Slack, Signal and other unofficial communication methods were used frequently. document agreements. Signal and Telegram were occasionally used to communicate with both internal and external parties with «disappearing messages» enabled, making any historical review impossible.

«FTX Group's expenses and invoices have been sent to Slack and approved by 'emoji'. These unofficial ephemeral messaging systems have been used to authorize transfers worth tens of millions of dollars, leaving only unofficial records of such transfers, or no records at all.»Veteran restructuring John J. Ray III, who managed Enron's insolvency case two decades ago, oversees FTX's bankruptcy.

Mr. Ray's «First Interim Term Report» includes the results of more than a million company documents and 19 interviews with employees.

Mr Ray said: «We are releasing the first report in the spirit of transparency we have promised since the beginning of the Chapter 11 process.»

FTX's charge

FTX collapsed last November after analysts raised questions about its ability to pay .

As Mr. Bankman-Fried's empire collapsed, further questions about alleged wrongdoing have arisen.

He was accused of fraud and violating campaign finance law, and after failing to pleaded guilty, he is due in court in November.

A debtor's report showed that FTX was run at the highest level by Mr. Bankman-Fried, minority shareholder Gary Wang and Nishad Singh, who came from Alameda.

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Mr. Singh pleaded guilty to fraud in February as part of a cooperation agreement with prosecutors.

Mr. Wang and Caroline Ellison, Mr. on Bankman-Fried and a former Alameda chief executive, pleaded guilty last year to charges related to their roles at FTX and Alameda Research and working with the US government.