“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information,” new FTX CEO John Ray III said in a legal filing on Thursday. “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.”Ray, who oversaw Enron’s bankruptcy in 2001, stepped in as CEO shortly after founder Sam Bankman-Fried resigned (and reportedly tried to flee to Argentina, although he denies it).
He is absolutely right that FTX was brought down by a complete failure of corporate controls, but in reality, the situation is far from unprecedented.
And unless the whole industry gets a grip, it will keep happening. That’s why the exchange’s collapse might actually turn out to benefit crypto in the long term: although right now it seems it’s only contributing to tarnishing its reputation, the FTX saga playing out before our sorry eyes is a chance to turn things around before it’s too late — which is to say, before greed, negligence and corporate malpractice bring the entire industry to its knees.Related: Will SBF face consequences for mismanaging FTX?
Don’t count on itEssentially, cases like FTX’s are a time bomb waiting to explode, and the longer they are left unchecked, the bigger the damage they can cause becomes.Read more on cointelegraph.com