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

In an ongoing Congressional hearing, FTX’s newly appointed chief executive John J Ray III had a mouthful to talk about the FTX and its founder, Sam Bankman-Fried. He told the panel that SBF “should have known” his actions and conflict of interest in the corporate relationship between the FTX crypto exchange and its trading arm Alameda Research would result in the empire’s final collapse.

John J. Ray Grills SBF For FTX Crash

In his remarks, Ray asserted that assets belonging to FTX customers were combined with those of Bankman-Fried’s trading company, Alameda. He further stated that the FTX exchange also made it possible for Alameda to efficiently borrow money without restrictions.

Read More: Manhattan Court Finds FTX Founder SBF Guilty To Wire Fraud

In the prepared testimony, he said that Alameda additionally used client funds for trades, subjecting them to significant losses.

Investigation Baffles Congress

John J Ray testified before a congressional committee on Tuesday that it was inherently dangerous for a corporation operating in the cryptocurrency sector to include its own tokens as an asset on its balance sheet. He mentioned this by citing the exchange’s native token, FTT.

Additionally, Ray remarked on FTX’s use of Quickbooks, stating:

[FTX] used Quickbooks — a multi-billion-dollar company using Quickbooks. Nothing against Quickbooks, very nice tool, just not for a multi-billion-dollar company.

Read More: SBF Built A House Of Cards, Says SEC Chair

Representative Frank Lucas from Oklahoma stated,

Bankman-Fried clearly tried to exhibit himself as the brightest of the bright, but being bright neither makes you honest nor a fool, does it?

The quick use of profanity by SBF in his opening remarks was criticized by Missouri Representative Emanuel Cleaver as being “extremely offensive” to Congress.

Read More: “SBF Bought Political Influence,” Says US Rep; Will It Save Him With Jail Term?

In light of recent developments, the congressman continued, he would be thinking about presenting a resolution to rename cryptocurrency “creepy dough currency.”