Sam Bankman-Fried handed over control of his company to the veteran Wall Street bankruptcy lawyer, John Jay Ray, who will guide the company’s Chapter 11 process.
The CEO of the troubled cryptocurrency exchange FTX has been replaced by John Jay Ray III, who guided the embattled energy giant Enron through difficult bankruptcy processes and several settlements in the early to mid-2000s. Samuel Bankman-Fried, the now-former CEO who guided FTX to its significant global crypto footprint, announced his resignation on Friday morning, the same day the business filed for bankruptcy.
Ray has garnered a reputation for having something of a Midas touch with troubled companies. The turnaround guru had previously held positions as a chief restructuring officer and plan administrator in well-known bankruptcy proceedings involving illustrious corporations including Overseas Shipholding Group and Nortel Networks. Ray led initiatives to return more than $20 billion to investors who had been duped when he was at Enron. Additionally, he developed a reputation for opposing Wall Street and its interests.
The leadership reorganization at FTX comes at a time when the company is being investigated by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission for mishandling customer cash, among other legal issues (CFTC).
John Jay Ray Set Plans in Place to Reduce Damages
John J. Ray III, Chief Restructuring Officer and newly appointed CEO of FTX have issued a statement on “unauthorized” access to FTX assets, according to Ryne Miller, general counsel of FTX US.
In his statement, Ray emphasizes the team’s ongoing efforts to guarantee that all assets are protected, regardless of where they are, and says they are currently “in the process of eliminating trading and withdrawal capabilities.” The located digital assets must be transferred to a “new cold wallet custodian.” Ray also confirms the reports on “unauthorized access to certain assets,” stating that this has indeed occurred.
Following that, “an active fact review and mitigation exercise was undertaken promptly in response,” according to Ray’s statement on the following actions.
Ray was asked to take over FTX on Friday night after managing the liquidation of Enron Corp., a notable and historic bankruptcy event.