Home Crypto New FTX CEO John Ray Mission Impossible

New FTX CEO John Ray Mission Impossible

by S. Jack Heffernan Ph.D
FTX CEO John Ray

The new FTX CEO John Ray said Saturday the company was making “every effort to secure all assets” following unauthorized transactions potentially worth hundreds of thousands of dollars, but we all know better.

“Unauthorized access to certain assets has occurred,” CEO John Ray said in a statement posted to Twitter by FTX’s general counsel, Ryne Miller.

FTX officials did not detail the quantity of unauthorized transactions made, but cryptocurrency analysis firm Elliptic said in a report published Saturday that “$477 million is suspected to have been stolen.”

More than “$663 million in various tokens” had been drained from FTX’s wallets only 24 hours after it filed for bankruptcy, Elliptic said, with the difference “believed to have been moved into secure storage by FTX themselves.”

FTX US and FTX.com “continue to make every effort to secure all assets, wherever located,” Ray, who specializes in corporate turnarounds, said in the statement.

The announcement comes a day after FTX filed for bankruptcy, part of a stunning collapse that has reverberated through the relatively young sector, sending other cryptocurrencies plummeting and drawing scrutiny from government regulators.

Additionally, the platform’s chief executive, 30-year-old Sam Bankman-Fried, once considered a star in the freewheeling cryptocurrency world, resigned.

As recently as 10 days ago, FTX was considered the world’s second-largest cryptocurrency platform, at one point valued at $32 billion.

But the company is now left trying to reassure a skeptical public.

– Fall from grace –

“Among other things, we are in the process of removing trading and withdrawal functionality and moving as many digital assets as can be identified to a new cold wallet custodian,” Ray said in the statement.

“Cold storage” refers to moving cryptocurrency assets to a hardware “wallet” unconnected to the Internet — to assure its security.

Ray added that “an active fact review and mitigation exercise was initiated immediately in response” to the unauthorized transactions.

Overnight, Miller had tweeted about an investigation into anomalies and other unclear movements, and by Saturday morning indicated that “unauthorized transactions” had occurred.

FTX’s troubles first surfaced amid press reports that its Alameda Research trading house was involved in a risky financial arrangement with FTX.com that appeared to involve grave conflicts of interest.

Financial media reported that FTX executives knew the platform was using billions in customer funds to prop up Alameda.

Adding to the drama, Binance, the world’s largest crypto exchange, agreed to buy FTX.com on Tuesday — before scrapping the takeover just a day later.

FTX is being investigated by both the US Securities and Exchange Commission (SEC) and the New York state Justice Department, according to the New York Times, which cited sources close to those probes.

The fall from grace even stretched to the world of sports, where the Miami Heat announced its FTX Arena is set for a rename and the Mercedes Formula One team said it had suspended a sponsorship deal with FTX and removed the company’s logos from its cars ahead of this weekend’s Sao Paulo Grand Prix.

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