The deep fall of crypto exchange FTX is due to a mix of “hubris, incompetence, and greed,” according to a new report from the bankruptcy trustee. The report sharply criticizes the chaos and lack of financial control and accounting mechanisms under founder Sam Bankman-Fried. Million-dollar expenditures were approved via Emoji.
Bankman-Fried‘s hedge fund, Alameda Research, often needed help understanding what positions were being held, the Wall Street Journal reported. “We sometimes find $50 million of value lying around that we had completely forgotten about; such is life,” Bankman-Fried joked in an internal communication.
According to the report, the now-indicted ex-crypto guru once said that Alameda was “ludicrously beyond any threshold that would allow an auditor to conduct even a partial audit successfully.”
In the FTX group, expenses and invoices were submitted via the instant messaging service Slack, an internal communications platform for many companies. They were approved with an emoji. However, expenditures and transfers amounting to tens of millions of dollars were also endorsed in this informal way. As proof, there was often only an informal Slack message and an emoji – or no proof at all, according to the report.