As FTX’s bankruptcy unfolds, many questions remain. For example, who hacked a cryptocurrency exchange with over $400 million worth of cryptocurrency? Recent testimony by FTX’s new CEO suggests that the public may never know the answer to this question.
CEO John J. Ray III Lax security practices are to blame for this fact. Ray told a Delaware bankruptcy court on Monday that the standards were so bad that the founders could have taken off by depositing hundreds of millions of dollars.
"Literally one of the founders could come into this environment, download half a billion dollars' worth of wallets onto a thumb drive, and walk off with them," he said. "And there'd be no accounting for that whatsoever."
Description of John J. Ray III, who previously took over Enron after its bankruptcy, described his first 48 hours in charge of FTX as “pure hell”.
The CEO, who specializes in helping bankrupt companies recover the most money for their creditors, also revealed his price. Ray has been charging FTX $690,000 for his work since he took over 50 days ago. “Where we are today is very satisfactory,” he added.
Since filing for bankruptcy, FTX lost $415 on the hack. At the time, some observers suggested that the hacks may have been a file inside the job.
Lax FTX security should be a cautionary tale for every crypto trader who keeps their coins on a centralized exchange.