Michaela
Sam Bankman-Fried, founder and former CEO of the collapsed crypto exchange FTX, said his “biggest mistake” was handing control of the platform to new management, claiming the move stopped him from potentially saving the company.
Key points:
- Sam Bankman-Fried expressed regret over handing FTX’s control to John J. Ray III, claiming the decision prevented a potential last-minute investment that could have saved the exchange.
- John Ray, a veteran restructuring executive, took charge of FTX’s bankruptcy, hiring Sullivan & Cromwell to manage the case and cutting off direct communication with Bankman-Fried amid efforts to recover assets.
- The FTX Recovery Trust has continued pursuing funds linked to the collapse, recently filing a lawsuit to reclaim over $1 billion allegedly misused in investments tied to Genesis Digital Assets.
In an interview with Mother Jones, Bankman-Fried said his greatest regret was transferring control of FTX to its current CEO, John J. Ray III. He claimed that shortly after finalizing the handover, he was informed of a potential outside investment that might have prevented the exchange’s bankruptcy, but by then, the decision was already irreversible.
Although Ray had “absolutely zero” experience with crypto and the crypto industry, he brought extensive expertise in corporate restructuring and crisis management. He had previously overseen major bankruptcies and turnarounds at companies such as Fruit of the Loom, Nortel Networks, and Residential Capital.
After assuming control of the crypto exchange, Ray promptly initiated bankruptcy proceedings and enlisted the law firm Sullivan & Cromwell to manage the case. Reports indicate that Ray cut off direct communication with Bankman-Fried, declining his attempts to discuss the company’s situation. He is also said to have characterized the FTX founder as a “familiar type of scoundrel.”
Roughly a month after transferring control of FTX to Ray, Bankman-Fried was arrested in December 2022 following the filing of criminal charges by U.S. prosecutors. He was later convicted on seven felony counts connected to the collapse of FTX and its sister trading firm, Alameda Research, which together led to an estimated $8.9 billion in investor losses. Bankman-Fried is now serving a 25-year federal prison sentence.
In late September, the FTX Recovery Trust, the entity overseeing the bankrupt exchange’s remaining assets, filed a lawsuit to recover more than $1 billion it claims was improperly funneled into the crypto mining firm Genesis Digital Assets (GDA).
The complaint, submitted to the U.S. Bankruptcy Court for the District of Delaware, accuses GDA, its affiliates, and two co-founders of receiving $1.15 billion in allegedly misused and commingled funds under the direction of Bankman-Fried.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
