Bahamians got $100 Million out, before Bankruptcy Filing of FTX… John Ray testifies

Shanieka Smith

Staff Writer

#TheBahamas, December 16, 2022 – Following the arrest and eight counts of criminal charges of FTX’s Former CEO, Sam Bankman-Fried, more wrongdoings have been revealed. Yet, customers’ money cannot be accounted for.

The new CEO, John Ray III, revealed that the company has no form of record-keeping other than Quickbooks, bookkeeping software.

“We’re dealing with literally a sort of a paperless bankruptcy in terms of how they created this company,” said Ray.  He added that he doesn’t trust the records that are available.

“We’ve lost billion dollars of customer money.  So by definition, I don’t trust a single piece of paper in this organization.”

He believes the entire situation is “old-fashioned embezzlement,” as money was taken from customers and used for personal purposes. FTX filed for chapter 11 bankruptcy in November after billions in customer funds were reportedly transferred to Alameda Research, Bankman-Fried’s hedge fund.

Ray confirmed that 24 hours before FTX filed for bankruptcy, about 1,500 Bahamians were allowed to withdraw some $100 million, while other investors were denied the chance, having been blocked from their accounts.

FTX’s Twitter account revealed that this was done as per Bahamian regulators’ request. Nonetheless, the securities commission in The Bahamas denied this, saying they did not authorize FTX to prioritize Bahamian clients only.

Additionally, Speaking to the panel at the hearing on Tuesday by the House of Financial Services Committee, Ray said the company was in touch with law enforcement just the day after FTX filed for bankruptcy. Assets were moved out after the bankruptcy occurred.

Ray said they determined money was removed both by a hack and by the Bahamian authorities. He is not sure why the money was taken by Bahamian authorities, however, the authorities reported it was the intention of protecting creditors.

The new CEO of the failed cryptocurrency exchange, FTX had asked for clarity and transparency from authorities but was denied.

Ray had also been asked whether he believes that Bankman-Fried was attempting to undermine US federal bankruptcy law by moving assets to Bahamian Authorities; he said “yes.”