FTX Founders Could Have Walked Away with $500M: FTX CEO

Security at FTX was so terrible that any of the founders could have taken off with 500 million, CEO said.

SBF carrying coins in the desert, as policeman watches.
  • The new CEO said that security practices at FTX were so bad that we might never know who’s behind the hacking. 
  • FTX founders could have downloaded $500,000 on a thumb drive and taken off. 
  • John J. Ray III charged FTX $690,000 for his work so far.

While the FTX bankruptcy unfolds, many questions remain. For instance, who hacked the crypto exchange for more than $400 million in crypto? Recent testimony by the new FTX CEO suggests that the public may never know the answer to that question. 

CEO John J. Ray III told blamed lax security practices for that fact. Standards were so bad that founders could have taken off with hundreds of millions of dollars in deposits, Ray told a Delaware bankruptcy court on Monday. 

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"Literally one of the founders could come into this environment, download half a billion dollars' worth of wallets onto a thumb drive, and walk off with them," he said. "And there'd be no accounting for that whatsoever."

John J. Ray III, who previously took charge of Enron after its bankruptcy, described his first 48 hours in charge of FTX as “pure hell.” 

The CEO, specializing in helping bankrupt firms recover as much money for their creditors, also revealed his rate. Ray charged  FTX $690,000 for his work since he took charge 50 days ago. “Where we are today is pretty satisfying,” he added.

Since filing for bankruptcy, FTX lost $415 in hacks. At the time, some observers suggested that the hacks might have been an inside job

On the Flipside

  • There is no proof that would suggest the FTX founders were behind the hacking. 

Why You Should Care

Lax FTX security should be a cautionary tale for every crypto trader that holds their coins in a centralized exchange. 

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
David Marsanic

David Marsanic is a journalist for DailyCoin who covers the intersection of crypto, traditional finance, and government. He focuses on institutionalized crypto entities like major cryptocurrency exchanges and Solana, breaking down complex topics into easy-to-understand writing. David's prior experience as a business journalist at various crypto and traditional news sites has enabled him to maintain a critical approach to news while adhering to high journalistic integrity standards.