A tumbleweed blows across a corporate boardroom with a “To The Moon!” poster in the background
Illustration: Steph Davidson/Getty Images
Crypto’s Most Influential Companies Often Follow Their Own Rules — Even After FTX’s Collapse
A review of practices at 60 of the sector’s most influential companies found many lack basic guardrails.
Before it filed for bankruptcy last November, many of the entities in Sam Bankman-Fried’s colossal FTX empire had never held a board meeting. The crypto exchange operator itself, once valued at $32 billion with $1.8 billion in venture capital raised, only established a board near the end of its life with three directors.
Its sister trading house Alameda Research, which allegedly received unfettered access to FTX customer assets to fund its bets, had such poor recordkeeping that Bankman-Fried told staff members its books were “unauditable,” according to communications published by the group’s new management. Occasionally the firm would find $50 million in assets “lying around that we lost track of,” Bankman-Fried said. Now the former CEO stands accused of fraud, money laundering and bribing Chinese officials — among other charges — while investors and customers are left nursing billions of dollars in losses.