FTX’s ‘hubris’ and ‘greed’ led to crypto exchange’s collapse, debtors report says

Failed crypto exchange FTX Trading Ltd lacked fundamental financial and accounting controls, stifled dissent within the company and joked internally about their tendency to lose track of millions of dollars in assets, according to a report by the company’s debtors.

The report is the first released by FTX debtors since Sam Bankman-Fried’s digital-asset empire rapidly collapsed into bankruptcy in November, with billions of dollars in customer funds lost.

At the root of FTX’s spectacular collapse was “hubris, incompetence, and greed” on the part of Bankman-Fried and top executives, including former engineering director Nishad Singh and former chief technology officer Gary Wang, the report said.

“Despite the public image it sought to create of a responsible business, the FTX Group was tightly controlled by a small group of individuals who showed little interest in instituting an appropriate oversight or control framework,” the report said.

“These individuals stifled dissent, commingled and misused corporate and customer funds, lied to third parties about their business, joked internally about their tendency to lose track of millions of dollars in assets, and thereby caused the FTX Group to collapse as swiftly as it had grown,” the report said.

When FTX filed for Chapter 11, the company didn’t even have a complete list of who its employees were, according to the report.

“We are releasing the first report in the spirit of transparency that we promised since the beginning of the Chapter 11 process,” John J. Ray III, FTX’s new chief executive officer and chief restructuring officer, said in a press release.