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FTX Hires Forensic Investigators to Locate Missing Money

According to a Wednesday report, the new management of FTX headed by John J. Ray III recently hired forensic investigators to help in its search for missing funds. The forensic team is headed by Matt Jacques, the former chief accountant for the Securities and Exchange Commission’s enforcement division.

FTX Hires Forensic Team to Aid in the Search for Missing Money

Soon after FTX collapsed, it started looking like the company was a real black hole for all kinds of funds. Not only were around $8 billion in customer funds missing—likely loaned to Alameda and subsequently lost—but a hack also occurred quickly after the bankruptcy was announced.

The situation took another turn for the worst when it was announced that at least $1 billion in customers’ funds was also missing and completely unaccounted for. Finally, on Wednesday, December 7th, it was reported that the company is taking serious measures to locate the disappeared money.

FTX’s new management hired a forensic team from the advisory firm AlixPartners. The team’s task is to try and locate as much of the missing funds as possible. The forensic detail is led by Matt Jacques who served as the Chief Accountant for SEC’s enforcement division between 2018 and 2022.

FTX’s Missing Money

The collapse of FTX has been incredibly confusing in no small part due to the sheer amount of missing, misplaced, and misappropriated funds. An example of early suspicious activity came on November 10th, when the company announced it would allow certain withdrawals of Bahaman funds—while withdrawals were frozen for most other customers—citing requests by Bahaman regulators

The issue with the justification FTX provided is that the Bahaman authorities later denied making any such requests. Furthermore, a day after the bankruptcy was announced, a hacker attacked FTX and drained hundreds of millions of the remaining user assets. One of the documents later filed by the company’s new management alleged that the island nation’s authorities might be behind the hack.

Additionally, the company’s bankruptcy CEO John J. Ray III spoke out calling FTX the “worst failure of corporate controls” he has ever seen. He explained that the company didn’t have an integrated accounting department, and made most of the internal communique using messages set to auto-delete soon after being sent. Allegedly, these issues are just some of the factors making locating all of FTX’s remaining assets very difficult to locate.

Sam Bankman-Fried, the former CEO and founder, went on what has become known as the “apology tour” in the month following the bankruptcy. While SBF has been claiming that he is simply trying to explain what happened, FTX’s new management felt the need to officially distance the company from its founder. Additionally, while denying any detailed knowledge of Alameda’s inner workings has been a staple of the “tour”, recent reports indicate that SBF knew far more than he is claiming.

This article originally appeared on The Tokenist

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