FTX’s collapse shattered everything around the crypto market. The collapse was so intense and quick that no one in the company knew the real solution. Within weeks, the firm filed for bankruptcy when its traders withdraw $6 billion dollars within 72 hours. Things got more intensified when Binance backed up from a potential rescue deal and FTX went into a deep hole from where there is no return.
To make things better, Sam Bankman-Fried choose the Bahamas for reorganization as the Caribbean country is considered to be one of the best in terms of regulating crypto trading. When things were not going according to plan, SMF choose to resign, and J. Ray III was made the new CEO of the company. However, things got worse from bad then onwards. How?
Bahamas, FTX, and J. Ray III
On Sunday, 27th November 2022, Bloomberg reported that “The Bahamian authorities blasted the individual accountable for restructuring crypto change FTX,” according to the Bahamas Legal professional Basic Ryan Pinder, J. Ray III’s claims are misrepresented and “extremely regrettable”. Following J Ray III’s accusation last week that the Bahamas improperly seized FTX assets, the Bahamas Attorney General responded.
On Sunday, Pinder addressed the nation and slammed the company’s authorities for misrepresenting the facts. He said that the company’s top leadership has “misrepresented the timely action taken by the Securities Commission and used inaccurate allegations lodged in the transfer motion they had filed to do so,” additionally, the Attorney General urged the multinational crypto company FTX to have some “prudence and accuracy in all future filings.”
What future holds for FTX?
No one knows what the future holds but as things are unfolding, the future of FTX is dark and gloomy. It is estimated that at least $1 billion in client funds – and likely much more – are still missing from more than 100 FTX affiliates that filed for bankruptcy protection. As a result of intense legal and regulatory scrutiny, the former CEO could face jail time after revelations emerged that he transferred $10 billion in client funds to the platform’s sister cryptocurrency trading firm, Alameda Research, which has since shut down.
According to FTX officials, Bankman-Fried ran the company like it was his “personal fiefdom.” The former CEO is accused of plundering company resources to fuel a spending spree that included the purchase of $300 million in luxury properties.
Things are not good even within the lines of the company officials. The new CEO J. Ray III accuses the top executives of the company of such a failure and devastation to the corporate. He publicly criticized both the old CEO and the top executive of the company. While in a court filing, J. Ray III said “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,”
FTX and Bahamas investigation
Whenever things unfold, it makes the situation worse for the company. On Sunday, Ryan Pinder further said that they are focusing on “affairs of FTX Digital Markets” and it is under scrutiny from both “civil and criminal authorities,” Additionally, he confirmed that they are making efforts to bring the company to the table and for that, they are working with “a number of specialists and experts and will continue to do so as the need arises.”
Additionally, he added that an investigation is started against the company “regarding FTX’s insolvency crisis and any potential violations of Bahamian law,”