FTX senior leaders lied to banks as far back as 2020 about the commingling and misuse of customer deposits, according to a report released Monday by CEO John J. Ray III.
The defunct cryptocurrency exchange — which once serviced more than 1 million users — claimed to be "the vanguard of customer protection efforts in the crypto industry." However, Ray's report alleged this public-facing fidelity to investors was a "mirage," and that FTX co-founder and ex-CEO Sam Bankman-Fried, along with other senior executives, mixed customer deposits with corporate funds and "misused them with abandon."
"Bankman-Fried, along with FTX.com's co-founder, Gary Wang, and Director of Engineering, Nishad Singh (the ‘FTX Senior Executives’), and others at their direction, used commingled customer and corporate funds for speculative trading, venture investments, and the purchase of many luxury properties, as well as for political and other donations designed to enhance their own power and influence," the report stated.
At the time of FTX's collapse, the exchange owed customers nearly $8.7 billion, the report said.
SAM BANKMAN-FRIED JUDGE WEIGHING TWO SEPARATE TRIALS FOR FTX FOUNDER
(Rafael Henrique/SOPA Images/LightRocket via Getty Images / Getty Images)
Ray alleged that an unnamed lawyer and Bankman-Fried lied to banks and auditors, executed false documents and moved the company from jurisdiction to jurisdiction "in a continual effort to enable and avoid detection of their wrongdoing."
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