The problems for the cryptocurrency firm FTX continued to mount Tuesday when a company lawyer stated during its bankruptcy hearing that a “substantial amount” of the firm’s assets “have either been stolen or are missing.”
The lawyer representing FTX during its bankruptcy hearings, James Bromley, laid much of the blame at the feet of the company’s founder, Sam Bankman-Fried. Bromley accused Bankman-Fried in court of running FTX like a “personal fiefdom” and ultimately demonstrating that “the emperor had no clothes.”
“This company was run by inexperienced, unsophisticated and potentially personally compromised individuals…It is one of the most abrupt and difficult company collapses in the history of corporate America,” Bromley told the judge.
Bromley laid into the once-time wunderkind for effectively running the multi-billion dollar exchange into the ground.
“Unfortunately, the FTX debtors were not particularly well run, and that is an understatement…We have probably witnessed one of the most abrupt and difficult corporate collapses in the history of corporate America,” Bromley said Tuesday.
FTX’s collapse shocked the financial world when it first came to light that the company could not cover a rush to withdraw funds earlier this month. At its peak, FTX was estimated to be valued at $32 billion and, virtually overnight, went broke.
“Here we are, with one of the richest people in the world [Bankman-Fried], his net worth dropping to zero, his business dropping to zero. . . . The velocity of this failure is just unbelievable,” Harvard bankruptcy professor Jared Ellias told the New York Times.
Despite his best attempts to assuage investors that “FTX is fine. Assets are fine,” Bankman-Fried’s words proved to be hollow as the bankruptcy hearings continue to show.
Information on the firm’s top 50 outstanding creditors is still being withheld at the moment who are estimated to be out of pocket more than $3 billion dollars.