FTX Creditors Blame SBF for Zero Risk Management in Initial Report

  1. FTX creditors have published an initial report saying the exchange’s failure was caused by SBF.
  2. The group added $1.7 million in crypto to the $1.4 billion that was to be given to FTX victims.
  3. FTX supporter Kevin O’Leary attacked Binance anew, saying the exchange is exposed to same risks as FTX.

A group composed of FTX and its creditors released its initial report concerning the infamous collapse of the exchange in November 2022 as well as the events that led to its demise. 

According to the report, the major culprit for the fiasco is Sam Bankman-Fried (SBF), formerly the superstar CEO of the exchange. Specifically, SBF had zero risk management and experience in running a crypto exchange after graduating from university. SBF also had the final say in every major decision.

However, FTX’s bank run risks started in July 2019 when former engineering chief Nishad Singh altered FTX’s code that allowed Alameda Research to withdraw any crypto from the exchange — including user assets.

The report is the first of the many that the group will be publishing. According to John Ray, CEO of FTX after its collapse, the previous management showed minimal interest in ensuring the stability of the exchange, which led to risky decisions and practices.

Currently, the group has added $1.7 billion to the $1.4 billion that will be used to return to those who lost money from the exchange.

Meanwhile, FTX supporter and television personality Kevin O’Leary attacked Binance CEO Changpeng Zhao anew, saying that Binance is also exposed to the same risks as FTX and might go down as well.

Binance has its own troubles as well, as it is being sued by the Commodity Futures Trading Commission (CFTC) for illegal operations and for evading the law.

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Jesus Dawal Jr covers news related to the crypto space in Asia and in Australia, although he follows the latest events in the US and Europe as well. He is most interested in the blockchain gaming and regulation aspects of the industry.