Facts You Should Not Know About The Bankrupt In FTX

FTX fact went bankrupt. (Photo; Doc. Coin98)

JAKARTA The leading bankrupt crypto trading company, FTX, is in the spotlight of the global community because it not only harms its users but also has a negative impact on leading companies, including the capital ventures Temasek and Sequoia Capital. On the other hand, FTX founder Sam Bankman-Fried as the company's leader has not yet been legally processed.

There are many speculations circulating about FTX's relationship with various other entities, both in the crypto and government industries. Even so, not a few facts have been revealed regarding the cause of the destruction of the crypto exchange. One of them is the absence of a company's financial control system.

Here are the facts about FTX that are rarely known to the public:

According to reports, part of a 30-page filing reveals that FTX Group does not have the right expenditure control system. Employees submit requests for expenses via online chat while the researchers and managers agree with personalized emojis.

Most decisions are made via chat, and FTX founders and former CEO Sam Bankman-Fried (SBF) reportedly encourage employees to use apps that automatically delete messages after a while. Therefore, there is no long-lasting decision-making record.

FTX does not have a cash management system; therefore, the company does not know the amount of cash that exists at a certain time. The lack of centralized cash control systems means the company does not have an accurate list of its bank accounts and account signatories. Also, the exchange does not pay attention to credit eligibility from its banking partners.

In addition, crypto assets stored by customers were not recorded on the balance sheet, and at the time of bankruptcy, the asset balance was not presented.

FTX Group companies store personal keys to customer assets in group email accounts without collateral. The company also uses "software to hide the misuse of customer funds."

A deeper analysis reveals that the company's digital assets are controlled by SBF and one of its founders, Gary Wang.

Most of the entities in the FTX Group, particularly those in Antigua and the Bahamas, have an inappropriate governance structure. In particular, most have never held council meetings.

The bankrupt kingdom also does not have the right records of its employees. Neither the employees nor the contractors have a clear record of the duration of work and responsibility. Efforts to compile a list of all employees failed because many of them could not be found.

Interestingly, the company's funds are used to buy private homes and properties for some top employees without proper documentation. The properties were also purchased on behalf of the employees.

Launching CryptoPotato, the loans of related parties at the Alameda Research company consisted of loans of US $ 1 billion, $ 543 million, and $ 55 million for SBF, FTX top executive Nishad Singh, and co-CEO Ryan Salame, respectively. Previous reports also claimed that the SBF withdrew $ 300 million from the US $ 420 million FTX collected in October 2021 during the bull run last year.