Emoji for expenses, penthouses and slipshod accounting: The most damning details from new FTX CEO’s report

Published

3 years ago

November 18, 2022

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Earlier Thursday, FTX CEO John Ray III filed a declaration with the United States Bankruptcy Court for Delaware, the latest in the implosion of one of the world’s largest cryptocurrency exchanges.

Ray, who helped shepherd Enron through its own bankruptcy, minced no words about the state of the company or the behavior of the former executive team, describing it as one of the worst examples of corporate controls he’d ever encountered. It was a damning remark from someone who has 40 years of legal and restructuring experience.

Here are some of the most significant revelations from Ray’s filing:

1. A total lack of financial and corporate controls

“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.”

Ray opened his filing torching former management, including former CEO Sam Bankman-Fried, for the failure by leadership to catch and address a stunning, multibillion-dollar hole in the Alameda Research-FTX balance sheets. The losses for investors may reach as high as $8 billion. But with nonexistent or deficient accounting, auditing and disbursement systems, it will take Ray and his forensic investigators “some time” to uncover the truth.

2. Slipshod accounting will require forensic analysis.

“I do not believe it appropriate for stakeholders or the Court to rely on the audited financial statements as a reliable indication of the financial circumstances of these [companies].”

FTX’s new chief said he had “substantial” concerns about the financial positions he was presenting to the court. FTX’s implosion revealed a massive hole in the company balance sheets, but until blockchain analysis and forensic accounting are completed, Ray said it was not “appropriate for stakeholders or the Court to rely” on the numbers presented.

Accurate financials are a key metric for valuing and investing in a company. Venture capital firms poured billions into poster child Bankman-Fried and his companies, valuing them in the tens of billions of dollars.

A standard aspect of any venture capital investment is a due diligence period, where books are opened and audited financials are shown to prospective investors. Ray’s assertion that the financial statements for many of FTX’s subsidiaries are unreliable raises fresh questions about the diligence performed by some of the world’s biggest venture firms.

3. Penthouses, perks and personal items

“In the Bahamas, I understand that corporate funds of the FTX Group were used to purchase homes and other personal items for employees and advisors. I understand that there does not appear to be documentation for certain of these transactions as loans, and that certain real estate was recorded in the personal name of these employees and advisors on the records of the Bahamas.”

Other reports have detailed lavish perks allegedly given to FTX employees in the Bahamas. Ray’s filing indicated that corporate funds were used to purchase homes for employees and advisors, sometimes in their name. Loans were not recorded from FTX to those individuals — as is typical with similar arrangements at other companies. Instead, individuals were given the deeds to these properties, according to Ray, free and clear, in their own names.

Notably, Bankman-Fried’s $40 million penthouse briefly hit the market in the aftermath of the bankruptcy. It has since been removed from public listing.

4. Emoji for expenses

“The Debtors did not have the type of disbursement controls that I believe are appropriate for a business enterprise. For example, employees of the FTX Group submitted payment requests through an online ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis.”

Despite an entire industry devoted to expense controls and reimbursements, Bankman-Fried’s team used internal messaging to release corporate funds into the hands of employees around the world. It isn’t immediately clear what platform FTX used, although the company is known to have used Slack for internal communications.

5. An advantage for Alameda

Unacceptable management practices included the use of an unsecured group email […] to access confidential private keys and critically sensitive data […] the absence of daily reconciliation of positions on the blockchain, the use of software to conceal the misuse of customer funds, the secret exemption of Alameda from certain aspects of FTX.com‘s auto-liquidation protocol, and the absence of independent governance […]”

Alameda Research, the secretive trading firm at the heart of Bankman-Fried’s empire, executed trades on FTX alongside other institutional and individual traders. The two firms were closer than publicly acknowledged, however, in light of Ray’s declaration that Alameda was secretly exempted from “certain aspects” of FTX’s auto-liquidation protocol.

It isn’t immediately clear what aspects Ray meant. In crypto trading, liquidation is most analogous to a margin call, where a levered position is closed out by an exchange due to a dramatic shift in an underlying asset’s price.

CNBC has made multiple requests for comment from Bankman-Fried.

Technology

Oracle stock jumps after $30 billion annual cloud deal revealed in filing

Published

5 hours ago

June 30, 2025

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Oracle stock jumps after billion annual cloud deal revealed in filing

Oracle CEO Safra Catz speaks at the FII PRIORITY Summit in Miami Beach, Florida, on Feb. 20, 2025.

Joe Raedle | Getty Images

Oracle shares jumped more than 5% after a recent filing showed a cloud deal that would add over $30 billion annually.

CEO Safra Catz is slated to share the deal news at a company meeting Monday, according to a filing with the Securities and Exchange Commission. The revenues are expected to start hitting in the 2028 fiscal year.

“Oracle is off to a strong start in FY26,” Catz is expected to say, according to the filing. “Our MultiCloud database revenue continues to grow at over 100%, and we signed multiple large cloud services agreements including one that is expected to contribute more than $30 billion in annual revenue starting in FY28.”

The deals revealed Monday by Catz will not affect the company’s 2026 guidance, according to the filing.

Trump says he has group of ‘very wealthy people’ ready to buy TikTok

Published

15 hours ago

June 30, 2025

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Trump says he has group of ‘very wealthy people’ ready to buy TikTok

U.S. President Donald Trump announced on April 4 that he would again postpone enforcement of a law banning TikTok unless its Chinese owner ByteDance divests from the platform.

Vcg | Visual China Group | Getty Images

U.S. President Donald Trump told Fox News in an interview aired on Sunday that he has a group of “very wealthy people” ready to buy TikTok, whose identities he can reveal in about two weeks.

Trump added that the deal will probably need Beijing’s approval to move forward, but said “I think President Xi will probably do it,” in reference to China’s leader Xi Jinping.

The president made the off-the-cuff remarks while discussing the possibility of another pause of his “reciprocal” tariffs on Fox News’ “Sunday Morning Futures with Maria Bartiromo.”

Tiktok’s fate in the U.S. has been in doubt since the approval of a law in 2024 that sought to ban the platform unless its Chinese owner, ByteDance, divested from it. The legislation was driven by concerns that the Chinese government could manipulate content and access sensitive data from American users.

Earlier this month, Trump extended the deadline for ByteDance to divest from the platform’s U.S. business. It was his third extension since the Supreme Court upheld the TikTok law just a few days before Trump’s second presidential inauguration in January. The new deadline is Sept. 17.

The Protecting Americans from Foreign Adversary Controlled Applications Act, of PAFACA, had originally been set to take effect on Jan. 19, after which app store operators and internet service providers would be penalized for supporting TikTok.

TikTok went dark in the U.S. ahead of the original deadline, but was restored after Trump provided it with assurances on the extension.

Trump, who credited the app with boosting his support among young voters in the last presidential election, has maintained that he would like to see the platform stay afloat under new ownership.

Potential buyers that have voiced interest in the app include Trump insiders such as Oracle’s Larry Ellison to firms like AppLovin and Perplexity AI.

Most of the potential bidders for TikTok don't fit both Washington and Beijing's requirements

However, it’s unclear if ByteDance would be willing to sell the company. Any potential divestiture is likely to require approval from the Chinese government.

A deal that would have spun off TikTok’s U.S. operations and allowed ByteDance to retain a minority position had been in the works in April, but was derailed by the announcement of Donald Trump’s tariffs on China, Reuters reported that month.

The president previously floated a proposal for American stakeholders to buy the company and then sell a 50% stake to the U.S. government as part of a joint venture.

Experts have previously told CNBC that any potential deal could face legal challenges in the U.S., depending on whether it complies with PAFACA.

Technology

Nvidia insiders dump more than $1 billion in stock, according to report

Published

1 day ago

June 29, 2025

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Nvidia insiders dump more than billion in stock, according to report

NVIDIA founder and CEO Jensen Huang speaks during the NVIDIA GTC Paris keynote, part of the 9th edition of the VivaTech technology startup and innovation fair, held at the Dôme de Paris in the Porte de Versailles exhibition center in Paris on June 11, 2025.

Mustafa Yalcin | Anadolu | Getty Images

Insiders at artificial intelligence chipmaker Nvidia have dumped more than $1 billion in stock over the last year, according to a report from the Financial Times.

About $500 million worth of sales occurred over the last month as the market notched new highs and shook off geopolitical tensions that had rattled investors, according to the report. The stock is up more than 17% this year despite concerns over curbs limiting AI chip sales overseas and 44% over the last three months.

Securities filings revealed that the tech titan recently unloaded about $15 million worth of shares as part of his more than $900 million plan announced in March to sell up to 6 million shares through the end of the year. Huang’s net worth totals about $138 billion, placing him as 11th on the Bloomberg Billionaires Index.

Last week, the chipmaking giant hit a fresh record and rallied for five straight days following the stock sales and an annual shareholder meeting, where the CEO called robotics the biggest opportunity for the company after AI. That helped the chipmaker regain its seat as the most valuable company ahead Microsoft and Apple.

The FT article cited a report from VerityData, which noted that the jump in shares above $150 prompted the stock dump.

Last year, Huang unloaded more than $700 million in Nvidia shares as part of a prearranged plan.

A Nvidia spokesperson declined to comment on the report.

Read the complete Financial Times report here.