We note that hackers are aware of the situation with the FTX cryptocurrency exchange and are trying to cash in on it. In particular, they are contacting former users of the platform and offering to open up access to their funds without waiting for the end of the platform’s bankruptcy case. Naturally, payment must be made for this, although the service itself is fake.

Consequently, in theory, gullible users could lose money here as well. So victims of the platform’s collapse should be careful even now – when their digital assets have already been locked up.

The collapse of cryptocurrency platform FTX in one picture

What’s going on with the FTX crypto exchange

The day before, Ray appeared before the US Bankruptcy Court for the District of Delaware to give an account of his activities as CEO of the exchange. In his testimony, he outlined the difficulties he faced after taking over as CEO.

According to Ray, he was forced to deal with chaos that was completely unlike anything he had done before. Recall that John Ray III had previously handled the bankruptcy case of major US corporation Enron. In this case, on his first day as interim CEO of FTX, he was faced with the theft of $650 million from the wallets of the exchange. Here’s a relevant line from Ray about his experience, cited by CryptoPotato.

I faced chaos from day one. One of the fund trackers called the cryptocurrency wallets in the AWS system “needles in a needle stack”. Those first 48 hours of work were pure hell.

As it turned out later, FTX's financial accounting was not done in a professional manner. In particular, the company's management was using a programme called QuickBooks to control the funds. While it was indeed very popular with entrepreneurs, the platform was not suitable for large enterprises. It is designed for small and medium-sized businesses, so the FTX representatives' approach to business is evident even in such small details.

FTX’s new CEO John Ray III

Ray also noted that the firm’s liquidators lacked expertise in dealing with crypto-assets. Previously, their incompetence in decentralised finance has resulted in irretrievable loss of funds on several occasions. The money, which amounts to millions of dollars, could have been used to compensate affected creditors and customers of the exchange, though.

Recall that the situation with the platform's liquidators has indeed turned out to be a curiosity. In short, they liquidated collaterals on certain FTX positions. In this regard, they returned the collateral for the positions and loans, but the main sums of money were lost in this case. From this it can be deduced that the company's representatives had no previous dealings with DeFi-platforms, and therefore such an interaction ended tragically.

FTX’s general lack of corporate control also made it difficult to trace the company’s money, as its management was free to transfer coins without accountability. Ray stressed that one of the founders was able to easily take $500 million from the budget for personal use without detection. He continues.

Literally one of the executives could come in any day, “download” half a billion dollars from the wallets onto a thumb drive and walk away with it. And there would have been no accountability.

Recall that the lack of reporting on loans also applies to the trading company Alameda Research, which was also founded by Sam Bankman-Fried. Thanks to an inconspicuous hole in the system, Alameda representatives used FTX users' money as their own collateral for trading positions without the latter's knowledge. Accordingly, the balance of FTX users essentially acted as a source of endless liquidity for the trading giant. And prosecutors also discovered that Alameda's trading positions on FTX were not liquidated, which is unfair to other users.

Ex-CEO of FTX Sam Bankman-Fried

By the way, the name of FTX and Alameda Research founder Sam Bankman-Fried is increasingly finding its way into the court record. According to Decrypt’s sources, a federal judge has rejected a request from Sam’s lawyers to allow him to speak to any representatives of the company again after the injunction was announced in January. In return for allowing Bankman-Friede to communicate under the supervision of lawyers, his lawyers promised not to challenge the separate order barring him from transferring assets related to FTX and Alameda.


It was originally expected that Sam would be allowed to use FaceTime, Zoom, iMessage, text messaging, email and Facebook Messenger. Permission was also supposed to apply to the WhatsApp platform, but in that case special monitoring software had to be installed on Bankman-Fried's smartphone. However, the judge ultimately decided otherwise.


Federal prosecutors said in a statement that the former billionaire, who is currently facing life imprisonment on charges of fraud and conspiracy, tried to communicate with FTX US general counsel Ryan Miller through the encrypted messaging app Signal last month. Any avenues of communication between Sam and witnesses in the case will therefore remain closed.

FTX cryptocurrency exchange founder Sam Bankman-Fried

It looks like the FTX bankruptcy trial and the "merits" of its founder Sam Bankman-Fried will be a long one indeed. First of all, the company's financial records were kept inaccurately and using inappropriate software. In addition, sources had previously reported that Sam had deliberately kept work-related correspondence with employees on messengers with an auto-delete function. This means it will take a long time to collate all the facts.