Former FTX.US president Brett Harrison says the collapse of the exchange he once worked for offers some lessons on how to prevent the next crypto disaster. In a new interview with Scott Melker, Harrison says the need for increased independent oversight is one main lesson he has taken away from the FTX collapse. “A couple […]
The post Former FTX.US President Brett Harrison Speaks on FTX’s Collapse, Says More Can Be Done To Prevent Next Disaster appeared first on The Daily Hodl.
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.
Related: Names of non-US FTX users demanded by mainstream media outlets
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.
“These three individuals, not long out of college and with no experience in risk management or running a business, controlled nearly every significant aspect of the FTX Group.”
Wang and Singh’s significant control over FTX was noted by an unnamed FTX executive who stated that “if Nishad [Singh] got hit by a bus, the whole company would be done. Same issue with Gary [Wang].”
It was noted that the company couldn’t provide a complete list of its employees at the time of bankruptcy filing in Nov. 2022.
FTX failed to file its financials on time at the end of financial reporting periods and did not carry out back-end checks to identify and correct material errors.
Brett Harrison, the president of FTX.US, raised concerns with Bankman-Fried and Singh regarding “the lack of appropriate delegation of authority, formal management structure, and key hires at FTX.US.”
In response, Harrison’s bonus was significantly reduced and he was instructed to apologize to Bankman-Fried by the firm's internal counsel, which he refused to do. It was reported that Harrison resigned following the disagreement.
Not sure how this is “new,” as I’ve written and spoken publicly about the circumstances of my resignation from FTX US a number of times since January. https://t.co/b3apaHoOzT
— Brett Harrison (@BrettHarrison88) April 9, 2023
Ray stated in a Feb. 6 court filing that when he took control of FTX in Nov. 2022 there was “not a single list of anything” related to bank accounts, income, insurance or personnel, causing a “massive scramble for information.”
He pushed back against the motion to assign an independent examiner to the bankruptcy case out of fears that “inadvertent errors” could result in “hundreds of millions of dollars of value being destroyed.”
Magazine: US and China try to crush Binance, SBF’s $40M bribe claim: Asia Express
“The Price of Tomorrow” author Jeff Booth has warned of a “great depression on steroids” if the U.S. Federal Reserve keeps hiking interest rates, while buzz about the anticipated layer two (L2) scaling solution known as Shibarium has been the backdrop for dynamic price movements in shiba inu. In other news, former FTX US president […]
Less than a week ago, Brett Harrison, the former president of FTX US, published a 49-part Twitter thread describing his side of the story when he worked for the disgraced co-founder of FTX, Sam Bankman-Fried (SBF). On Friday, Jan. 20, 2023, Harrison revealed that his new firm, Architect, has raised $5 million from investors such […]
It is understood the crypto software company will enable crypto traders to create algorithmic-based strategies to access different markets.
SkyBridge Capital founder Anthony Scaramucci is investing in a crypto company founded by the former president of FTX US.
Scaramucci told Bloomberg in an email that he would be investing his own personal funds to support ex-FTX US president Brett Harrison’s new venture, which was revealed just three weeks after the collapse of crypto exchange FTX.
It is understood that the crypto software company — which doesn’t yet have a name — will enable crypto traders to create algorithmic-based strategies to access different markets, both centralized and decentralized.
It is also understood that Harrison has been seeking a fundraising target as high as $10 million for a $100 million valuation.
In a Jan. 14 tweet responding to Harrison's lengthy thread on Sam Bankman-Fried and his time at FTX US, Scaramucci said he was “proud” to be an investor in Harrison’s new company.
Brett I am proud to be an investor in your new company. Go forward. Don’t look back. Wishing you the best.
— Anthony Scaramucci (@Scaramucci) January 14, 2023
Harrison replied to the tweet thanking Scaramucci, adding that “Your support and advice means the world to me. I can’t wait to work together!”
The amount of capital deployed and stake received by Scaramucci was not disclosed, however.
Harrison’s new crypto venture was first hinted at on Sept. 27, when he announced thahe was stepping down from his role as president of FTX US.
At the time, he said he was resigning his position as president but will remain with the exchange in an advisory role for the next few months.
“I can’t wait to share more about what I’m doing next,” he said at the time.
In his most recent Twitter thread, Harrison revealed that he left the firm after his relationship with Bankman-Fried abruptly deteriorated and that the troubles led him to shift his “focus to the future and to my own company.”
Related: Skybridge eyes stake buyback from FTX, as Galaxy CEO says he would like to ‘punch’ SBF
Meanwhile, Scaramucci continues to have high hopes for crypto market recovery this year, describing 2023’s market outlook as a “recovery year.”
In an interview with CNBC on Jan. 15, the crypto investor said he expects Bitcoin (BTC) to rebound to the $50,000-100,000 range within the next two to three years.
“You are taking on risk but you’re also believing in [Bitcoin] adoption. So if we get the adoption right, and I believe we will, this could easily be a fifty to one hundred thousand dollar asset over the next two to three years,” he added.
At time of publication, Bitcoin was currently trading at $21,240, up 21.77% over the last week.
The former president of FTX US, Brett Harrison, published a 49-part Twitter thread explaining why he left the firm and his relationship with co-founder Sam Bankman-Fried (SBF) of FTX. Before his role at FTX US, Harrison worked with SBF at Jane Street and prior to joining FTX, he worked for Citadel Securities. In the Twitter […]
Harrison said Bankman-Fried threatened to fire him on the spot and would destroy his professional reputation if he continued to confront the former FTX CEO.
Former FTX US President Brett Harrison has lashed out at Sam Bankman-Fried for manipulating and threatening colleagues who proposed solutions to reorganize FTX US' management structure.
Harrison shared his experiences with Bankman-Fried and FTX US on Dec. 14, explaining how he was hired “casually over text” in Mar. 2021 after working together at New York-based trading firm Jane Street for a few years.
But six months into Harrison's tenure at FTX US, “cracks began to form” between the two, he said.
Despite recalling Bankman-Fried to be a “sensitive and intellectually curious person” at first, Harrison said he saw “total insecurity and intransigence” in Bankman-Fried when confronted with conflict, particularly when Harrison suggested FTX US establish separate branches for its executive, developer and legal teams.
16/49 I saw in that early conflict his total insecurity and intransigence when his decisions were questioned, his spitefulness, and the volatility of his temperament. I realized he wasn’t who I remembered.
— Brett Harrison (@BrettHarrison88) January 14, 2023
Harrison added that he “wasn’t sure what accounted for the dramatic change” in Bankman-Fried’s erratic behavior, though he suspected mental health issues may have been a "contributing factor."
Part of that irrational behavior Harrison describes included a series of gaslighting and manipulation tactics Bankman-Fried used against Harrison and other colleagues in their bid to clean up FTX US' corporate mess.
Harrison also recalled his last attempt to fix FTX US’ organization issues with Bankman-Fried, claiming that he threatened to “destroy my professional reputation” if a formally apology wasn’t received:
29/49 In response, I was threatened on Sam’s behalf that I would be fired and that Sam would destroy my professional reputation. I was instructed to formally retract what I’d written and to deliver an apology to Sam that had been drafted for me.
— Brett Harrison (@BrettHarrison88) January 14, 2023
Harrison said that event “solidified” his decision to leave.
Related: FTX ex-staffer: Extravagant expenditures and cult-like worshipping of SBF
As for the fraud charges now laid against Bankman-Fried and other FTX colleagues, Harrison said he was blinded by the firm’s alleged commingling and misuse of billions of dollars of customer funds:
“I never could have guessed that underlying these kinds of issues — which I’d seen at other more mature firms in my career and believed not to be fatal to business success — was multi-billion-dollar fraud.”
“If any one of us had suspected let alone learned the truth, we would have reported them immediately,” he added.
Bankman-Fried was granted bail after posting a $250 million bond guarantee and pleading not guilty to all eight criminal charges laid against him on Jan. 3.
Harrison stepped down as FTX US President on Sept. 27 — about five weeks before FTX catastrophically collapsed — where he stated that he moved into an advisory role.
Brett Harrison of FTX US has announced that he will be stepping down from his position as president at the crypto exchange. Breaking the news on Twitter, Harrison tells his 56,000 followers that he will be taking on a role as an advisor to FTX. Harrison says that as he leaves FTX, the industry is […]
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Top executives at crypto exchange giant FTX are responding to allegations of misleading statements from the Federal Deposit Insurance Corporation (FDIC). FTX CEO Sam Bankman-Fried tells his 761,000 Twitter followers the crypto exchange platform is not FDIC-insured and that only the banks they work with are. On Thursday, the FDIC issued a cease-and-desist order to […]
The post FTX’s Sam Bankman-Fried and Brett Harrison Respond to FDIC’s Allegations of ‘False Statements’ appeared first on The Daily Hodl.
The Federal Deposit Insurance Corporation (FDIC) is hitting crypto exchange giant FTX.US with a cease-and-desist order over allegedly making false statements. According to a new press release issued by the financial regulator, FTX.US has supposedly made statements that make it appear as if the products they offer are FDIC-insured. The FDIC says that FTX.US president […]
The post Financial Regulator Slaps Crypto Exchange FTX US With Cease-and-Desist Letter Over ‘False’ Statements appeared first on The Daily Hodl.
