Enron’s bankruptcy lawyer says FTX collapse is even worse

John J. Ray, the lawyer known for taking over Enron after its collapse has been put in charge of failed crypto exchange FTX, founded and run by Sam Bankman-Fried.

The exchange collapsed this month after it ran into liquidity issues. Mr Ray was since appointed CEO of FTX to deal with the fallout and unwind the firm.

In a filing with US Bankruptcy Court for the District of Delaware, he criticised the management of the business.

Mr Ray said: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.

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

Shockingly, Mr Ray said he would prioritise the implementation of “accounting, audit, cash management, cybersecurity, human resources, risk management, data protection and other systems,” saying that they “did not exist, or did not exist to an appropriate degree, prior to my appointment”.

FTX’s bankruptcy filing detailed the firm having some 100,000 creditors, assets in the range of $10 billion to $50bn (£8.4bn to £41.9bn), as well as liabilities in the range of $10bn to $50bn.

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