FTX CEO John Ray blamed the collapse of the crypto exchange on "absolute concentration of control in the hands of a small group of grossly inexperienced and unsophisticated individuals."
"I've never seen such an utter lack of record keeping," Ray testified during a Congressional hearing about FTX's collapse on Tuesday. He described it as "old-fashion embezzlement."
FTX founder, Sam Bankman-Fried, was expected to testify virtually at the hearing, but he was arrested on Monday evening in the Bahamas and indicted by the U.S. on criminal charges of wire fraud and money laundering.
Bankman-Fried is an investor in Semafor.
What He Said
Ray described systematic mismanagement at FTX.
"Never in my career have I seen such an utter failure of corporate controls at every level of an organization, from the lack of financial statements to a complete failure of any internal controls or governance whatsoever," Ray said in prepared opening remarks which were released ahead of the hearing.
The CEO testified during the hearing that FTX used Quickbooks for accounting services, which he said was highly unusual for a multibillion dollar-valued company.
“This is unusual in the sense that there was literally no record keeping whatsoever – an absence of record keeping," he said.