According to John J. Ray III, the CEO and Chief Restructuring Officer of FTX, the cryptocurrency exchange commingled customer deposits from the start. When FTX filed for bankruptcy protection in November 2020, it owed clients approximately $8.7 billion. The new management team, led by Ray, has made progress in recovering liquid assets, with $7 billion recovered so far. The team alleges that FTX conducted misdeeds against its clients, including commingling funds and lying to banks about a trading firm. Ray claims that misusing clients was a practice adopted by FTX since its inception. The team also reveals that FTX established a shell firm called North Dimension Inc. to fund withdrawals for the parent company. Despite the collapse of FTX and its negative impact on the industry, there are plans to revive the exchange. Ray hints at the possibility and has received support from finance leaders. A court filing suggests a reorganization strategy that includes a bidding process.
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