FTX's Image As Customer-Focused Leader Was A Mirage, Report Says

The image that the FTX sought to portray as the customer-focused leader of the digital age was a "mirage," stated CEO and Chief Restructuring Officer of the FTX Debtors John J. Ray III on Monday.

FTX Debtors released a report revealing the misuse and intermingling of customer deposits by the previous management team of FTX, led by founder Sam Bankman-Fried. 

The report is part of an ongoing analysis by the FTX Debtors to trace and recover assets to maximize stakeholder recoveries.

According to the report, the FTX.com exchange owed customers approximately $8.7 billion as of the petition date.

"The image that the FTX Group sought to portray as the customer-focused leader of the digital age was a mirage," Ray III said. 

"From the inception of the FTX.com exchange, the FTX Group commingled customer deposits and corporate funds, and misused them with abandon at the direction and by the design of previous senior executives."

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The report is part of a series regarding pre-petition events and issues that preceded the Chapter 11 cases.

The FTX Debtors previously released the first report, which identified and discussed control failures by FTX Group's previous management team in critical areas, including management and governance, finance and accounting, digital asset management, information security and cybersecurity.

The FTX Debtors expect to publish the third report of the series in August 2023.

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