FTX’s bankruptcy-era CEO, John J. Ray III, appointed to shepherd the collapsed crypto exchange through Chapter 11 reorganization, testified on Tuesday that the company’s founder and former CEO, Sam Bankman-Fried, made multiple misstatements about his companies’ financials.
Ray, who oversaw Enron’s infamous corporate fraud, characterized FTX’s actions as “old fashioned embezzlement.”
“This is just taking money from customers and using it for your own purpose,” Ray said. “Not sophisticated at all,” he said, explaining that what might have been sophisticated about the scheme was hiding it in plain sight.
Ray’s testimony may also have shed light on the theories that underlie the Justice Department’s accusations against Bankman-Fried, who was charged with eight counts of wire fraud, securities fraud, and conspiracy in an indictment unsealed on Tuesday.
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