FTX Trading Ltd. (d.b.a. FTX.com) and its affiliated debtors (together, the “FTX Debtors”), today announced the release of their second report, which details the commingling and misuse of customer deposits at FTX.com by FTX Group’s previous management team (the “Report”).

The Report is based on the FTX Debtors’ ongoing analysis to trace and recover assets and maximize recoveries for stakeholders. As part of the Report, the FTX Debtors noted that the FTX.com exchange owed customers approximately $8.7 billion as of the petition date. This work was undertaken by the FTX Debtors through a team of legal, restructuring, forensic accounting, asset tracing and recovery, blockchain analytics, and other experts.

The full text of the Report has been posted on the quick links section of the FTX Debtors Kroll site at https://cases.ra.kroll.com/FTX/.

John J. Ray III, Chief Executive Officer and Chief Restructuring Officer of the FTX Debtors, said: “The release of this report furthers our stated objective of transparency, both about the facts uncovered about the operation of FTX.com and the important issues being navigated as we seek to maximize recoveries.  The image that the FTX Group sought to portray as the customer-focused leader of the digital age was a mirage. From the inception of the FTX.com exchange, the FTX Group commingled customer deposits and corporate funds, and misused them with abandon at the direction and by the design of previous senior executives. We will continue to report our analysis and findings as our work progresses, and remain committed to recovering as much value as possible for creditors.”

The FTX Debtors’ review is ongoing, and the Report is part of a series regarding pre-petition events and issues that preceded the Chapter 11 cases. The FTX Debtors previously released first report identified and discussed control failures by FTX Group’s previous management team in critical areas, including management and governance, finance and accounting, digital asset management, information security and cybersecurity. The FTX Debtors expect to publish the third report of the series in August 2023.  

U.S. Bankruptcy Court filings and other documents related to the court proceedings, including all reports produced by the FTX Debtors, are available at https://cases.ra.kroll.com/FTX/.

SOURCE FTX