New CEO of FTX gives explanation of exchange's collapse in Congressional hearing

The founder of FTX, Sam Bankman-Fried, was accused on Tuesday by US regulators with defrauding investors. On Wednesday, the crypto exchange's new CEO testified before legislators that the collapse was caused by bad management and inexperienced leaders.

John Ray, who took over as CEO of FTX after Bankman-Fried resigned and the company declared bankruptcy on November 11, said that the collapse of the FTX group "appears to stem from absolute concentration of control in the hands of a small group of grossly inexperienced, non sophisticated individuals."

The operations of FTX and Alameda Research, Bankman-cryptocurrency Fried's trading company that kept strong ties to his exchange, Ray added, were almost identical.

Bankman-Fried was scheduled to appear before a court on Tuesday after being detained on Monday night in the Bahamas. He is anticipated to be extradited to the United States, according to the Bahamas attorney general's office.

For feedback and suggestions, write to us at editorial@iifl.com