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New FTX CEO who has been brought in to clean up the company's wreck for $1,300 per hour

FTX is bankrupt but still paying top dollar to key employees as company tries to fix mistakes made by founder Sam Bankman-Fried

FTX’s new CEO is being paid $1,300 an hour to clean up the collapsed cryptocurrency firm.

John Ray III took over the bankrupt company on November 11 after founder Sam Bankman-Fried resigned after losing billions of dollars.

With FTX bankrupt, paying high salaries to top employees appears to be the only way to save the company after Bankman-Fried allegedly loaned and lost billions of client money to Alameda Research without their knowledge or permission. .

In addition to Ray’s high salary, the company also pays executive director Kathryn Schultea and chief information officer Raj Perubhatla $975 an hour, according to court documents obtained by Fortune.

FTX has also hired contractors to ensure the business operates ethically for over $50,000 per month.

Company attorney Edgar Mosley said paying employees “is necessary to preserve the resources and value” of FTX.

“Without it, I think even more employees might be looking for other employment opportunities … likely diminishing stakeholder confidence in debtors’ ability to reorganize successfully,” Mosley said, according to the media.

FTX is bankrupt but still paying top dollar to key employees as company tries to fix mistakes made by founder Sam Bankman-Fried

FTX is bankrupt but still paying top dollar to key employees as company tries to fix mistakes made by founder Sam Bankman-Fried

John Ray III took over as CEO of FTX for $1,300 an hour on November 11 as he attempted to clean up the collapsed cryptocurrency company.  Pictured: FTX Arena

John Ray III took over as CEO of FTX for $1,300 an hour on November 11 as he attempted to clean up the collapsed cryptocurrency company. Pictured: FTX Arena

CEO Ray, who has 40 years of experience dealing with failing companies including Enron, filed for bankruptcy Thursday laying bare the extent of the malfunction.

“Never in my career have I seen such a complete failure of corporate controls and such a complete lack of reliable financial reporting as has happened here,” Ray said.

“From the compromised integrity of systems and faulty regulatory oversight overseas, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented. “

Bankman-Fried was recently estimated at $23 billion. His net worth has all but evaporated, according to Forbes and Bloomberg.

Ray, in the bankruptcy filing, said he had never seen such chaos and incompetence

Ray, in the bankruptcy filing, said he had never seen such chaos and incompetence

Ray explained why he was brought in and said his history of mismanagement didn’t prepare him for the mess at FTX.

“I have over 40 years of legal and restructuring experience,” he said.

“I’ve been director of restructuring or managing director of several of the biggest corporate bankruptcies in history.

“I have overseen situations involving new financial structures (Enron and Residential Capital) and the recovery and maximization of cross-border assets (Nortel and Overseas Shipholding).

“Virtually every situation I have been involved in has been characterized by some flaw in internal controls, regulatory compliance, human resources and systems integrity.”

Ray said his history of dealing with mismanagement didn't prepare him for the mess at FTX

Ray said his history of dealing with mismanagement didn’t prepare him for the mess at FTX

Ray said FTX was by far the worst case he had come across.

Since his resignation, Bankman-Fried has sought out news outlets for interviews and has been active on Twitter trying to explain himself and the company’s failure.

In an interview with online media outlet Vox, Bankman-Fried admitted that his previous calls for cryptocurrency regulation were mostly for public relations.

“Regulators, they make everything worse,” Bankman-Fried said, using an expletive for emphasis.

In a terse statement, Ray said Bankman-Fried’s statements were “erratic and misleading” and that “Bankman-Fried is not employed by and does not speak for debtors.”

Ray noted that many FTX Group companies, particularly those in Antigua and the Bahamas, lacked proper corporate governance and many had never held a board meeting.

Ray also touched on the use of company funds to pay for homes and other items for employees.

“In the Bahamas, I understand that FTX Group Company funds have been used to purchase homes and other personal items for employees and councillors.

“I understand that there does not appear to be documentation for some of these transactions as loans, and that some real estate has been registered in the personal names of these employees and advisors in the Bahamian records,” he said. he declares.

Bankman-Fried previously admitted that his previous calls for cryptocurrency regulation were mostly for public relations

Bankman-Fried previously admitted that his previous calls for cryptocurrency regulation were mostly for public relations

Bankman-Fried has hired a former chief finance regulator nicknamed “Crypto Dad” to land a meeting with the SEC chairman, DailyMail.com revealed on Thursday.

The crypto billionaire’s company tapped Christopher Giancarlo, the former head of the Commodity Futures Trading Commission, to set up a ‘formal introduction’ with SEC Chairman Gary Gensler, which took place in October 2021 .

The meeting is believed to be the first between Bankman-Fried and Gensler, who also controversially met in March this year to discuss a crypto trading platform that could be approved by the SEC.

This means the SEC Chairman has met with Bankman-Fried at least twice – and will be pressuring Gensler to explain their relationship and his failure to prevent the FTX crisis.

Gensler is said to be “in a corner” during his meetings with Bankman-Fried and congressional lawmakers want him to answer questions about how the collapse of FTX, which cost investors billions of dollars , could occur under his supervision.

Giancarlo, a lawyer who left the CFTC in 2019, was dubbed “Crypto Dad” by cryptocurrency enthusiasts for his positive attitude towards technology.

He attended the meeting in 2021 in his capacity as a solicitor for Willkie Farr & Gallagher.

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