FTX financial controls were a ‘hodgepodge’ of apps, says court filings

April 09. 2023

By Ciaran Lyons

A court filing alleged apps such as Excel spreadsheets and Slack messages were used to manage the assets and liabilities of FTX and its entities.

FTX was run by three inexperienced people “not long out of college,” who relied on “a hodgepodge” of online shared documents and communications across a series of different apps to manage the multi-billion dollar empire according to FTX CEO John Ray III.

In an April 9 court filing in a Delaware Bankruptcy Court, John J Ray III gave his first detailed account of the control failures at FTX.

Ray stated that his restructuring team had “identified extensive deficiencies in the FTX Group’s controls” from a lack of appropriate financial and accounting controls to an inadequate group management structure and record-keeping process.

FTX apparently “relied on a hodgepodge of Google documents, Slack communications, shared drives and excel spreadsheets” to manage its assets and liabilities.

FTX used the accounting software QuickBooks, which Ray said was designed for “small and mid-sized businesses” and not for a firm that operates across “multiple continents and platforms” such as FTX.

FTX’s bookkeeping was reported to have been neglected as around 80,000 transactions were left as unprocessed accounting entries in “catch-all QuickBooks accounts titled ‘Ask My Accountant.’”

Ray emphasized that co-founders Sam Bankman-Fried and Gary Wang, along with former engineering director Nishad Singh had the “final voice in all significant decisions,” despite very limited experience.

To read the entire article...Click Here!