FTX Hearing: CEO John J. Ray iii Claims “Embezzlement” Root Cause Of FTX Collapse

FTX’s new chief executive John Ray III was a mouthful at a congressional hearing. He spoke about the FTX founder Sam Bankman-Fried and his actions in conflict of interest. He stated that SBF “should’ve known” that his conflicts of interest in the corporate relationship between FTX crypto exchange, and Alameda Research’s trading arm Alameda Research would lead to the empire’s ultimate collapse.
Ray Grills SBF for FTX Issue
Ray stated in prepared remarks that FTX customer assets were mixed with assets of Alameda Bankman-Fried’s trading company. He added that Alameda could borrow funds without limitations through the cryptocurrency exchange.


Ray stated that assets belonging to FTX customers had been combined with those of Bankman-Fried’s trading company, Alameda. Alameda was also able to borrow money efficiently without restrictions thanks to the FTX exchange.
Read More: Manhattan Court convicts FTX Founder SBF of Wire Fraud
He stated in prepared testimony that Alameda also used client funds to trade, which resulted in significant losses.
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Investigation Baffles Congress
Ray testified before a congressional panel on Tuesday that it was dangerous for a corporation in the cryptocurrency sector, to include its tokens as assets on its balance sheet. This was referred to by Ray by citing FTT, the native token of the exchange.
Ray also commented on FTX’s use Quickbooks, stating that:


[FTX] used Quickbooks — a multibillion-dollar company that uses Quickbooks. Quickbooks is a great tool. However, it’s not the best for multi-billion dollar companies.
Read More: SBF Built A House Of Cards, Says SEC Chair
Representative Frank Lucas, Oklahoma, stated:
Bankman-Fried tried to be the brightest of the bright. But being bright doesn’t make you honest or foolish, does it?
Missouri Representative Emanuel Cleaver criticized the use of profanity in SBF’s opening remarks as being “extremely offensive” for Congress.
Read More: US Rep Says SBF Bought Political Influence; Will It Save him From Jail?
The congressman said that he was considering a resolution to rename cryptocurrency as “creepy dough currency” in light of recent developments.

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