FTX Insolvency Team Publishes Interim Report on Failure of Control of FTX and Related Businesses

The new team responsible for FTX's insolvency has released its first interim report on failures of control in FTX and related businesses, which identifies and discusses control failures by the previous management team of FTX Group in key areas including management and governance, finance and accounting, digital Asset management, information security and cybersecurity. It reiterated FTX's lack of recordkeeping and controls to prove the location or manner of fiat and digital assets and the widespread mixing of assets, and stated that "FTX executives suppressed dissent, mixed and misused company and customer funds, and reported to third parties about their business. Lying, joking internally that they lost track of millions of dollars in assets,” debtors had to piece together financial records based on what they found in their QuickBooks and Slack records. In addition, the U.S. team said that laptops belonging to SBF and other senior insiders are currently in the hands of the Bahamas Joint Provisional Liquidators, "who have not been very cooperative."