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New FTX CEO who has been brought in to clean up the company’s wreck for $1,300 per hour

The new CEO of FTX is being paid a whopping $1,300 an hour to clean up the collapsing cryptocurrency company.

John Ray III took over the bankrupt company on November 11 after founder Sam Bankman-Fried resigned amid multibillion-dollar losses.

While FTX is bankrupt, paying top employees high salaries appears to be the only way to save the company after Bankman-Fried allegedly lent and lost billions in client money to Alameda Research without their knowledge or permission.

In addition to Ray’s hefty salary, the company also pays Kathryn Schultea, a managing director, and Raj Perubhatla, a chief information officer, $975 an hour, according to court documents obtained by Fortune.

FTX has also hired contractors to make sure the company runs ethically for more than $50,000 per month.

Company attorney Edgar Mosley said paying employees “is necessary to preserve the resources and value” of FTX.

“Without it, I believe even more employees may seek alternative employment opportunities…probably diminishing stakeholder confidence in the Debtors’ ability to reorganize successfully,” Mosley said, according to the news outlet.

FTX is bankrupt, but still pays key employees top dollar as the company tries to right mistakes made by founder Sam Bankman-Fried

John Ray III took over as CEO of FTX for $1,300 an hour on November 11 as he attempts to clean up the collapsing cryptocurrency company. In the photo: the FTX arena

Chief Executive Ray, who has 40 years of experience dealing with failing companies including Enron, filed for bankruptcy on Thursday laying bare the scale of the dysfunction.

“Never in my career have I seen such a complete breakdown of corporate controls and such a complete absence of reliable financial information as happened here,” Ray said.

“From compromised systems integrity and flawed regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised people, this situation is unprecedented.”

Bankman-Fried was recently estimated to be worth $23 billion. His net worth has all but evaporated, according to Forbes and Bloomberg.

Ray, in the bankruptcy filing, said he had never seen such chaos and incompetence.

Ray explained why he had been hired, saying that his history of dealing with mismanagement had not prepared him for the chaos at FTX.

“I have more than 40 years of legal and restructuring experience,” he said.

‘I have been a restructuring director or CEO in several of the biggest corporate bankruptcies in history.

‘I have overseen situations involving novel financial structures (Enron and Residential Capital) and cross-border asset recovery and maximization (Nortel and Overseas Shipholding).

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‘Almost every situation I’ve been involved in has been characterized by weaknesses of some kind in internal controls, regulatory compliance, human resources and systems integrity.’

Ray said that his history of dealing with mismanagement had not prepared him for the chaos at FTX.

Ray said that FTX was by far the worst case he had ever come across.

Since his resignation, Bankman-Fried has sought out media outlets for interviews and has been active on Twitter trying to explain himself and the company’s failure.

In an interview with online news outlet Vox, Bankman-Fried admitted that his previous calls for crypto regulation were mainly for public relations.

“Regulators make everything worse,” Bankman-Fried said, using a swear word for emphasis.

In a brief statement, Ray said that Bankman-Fried’s statements have been “erratic and misleading” and that “Bankman-Fried is not employed by and does not speak for the Debtors.”

Ray noted that many of the FTX Group companies, particularly those in Antigua and the Bahamas, did not have proper corporate governance and many had never held a board meeting.

Ray also addressed the use of corporate funds to pay for houses and other items for employees.

‘In the Bahamas, I understand that FTX Group corporate funds were used to purchase houses and other personal items for employees and consultants.

“It is my understanding that there does not appear to be documentation for some of these transactions as loans, and that certain real estate was registered in the personal names of these employees and advisers in the Bahamian registries,” he said.

Bankman-Fried previously admitted that his previous calls for crypto regulation were mainly for public relations.

Bankman-Fried hired a former chief financial regulator nicknamed ‘Crypto Dad’ to get a meeting with the SEC chairman, DailyMail.com revealed on Thursday.

The crypto billionaire’s firm brought in Christopher Giancarlo, former head of the Commodity Futures Trading Commission, to set up a “formal filing” with SEC Chairman Gary Gensler, which took place in October 2021.

The meeting is believed to be the first between Bankman-Fried and Gensler, who also controversially met in March of this year to discuss a cryptocurrency trading platform that could be approved by the SEC.

It means the SEC chairman has met with Bankman-Fried at least twice, and will press Gensler to explain their relationship and his failure to prevent the FTX crisis.

Gensler is said to be “cornered” by his meetings with Bankman-Fried and lawmakers in Congress want him to answer questions about how the FTX collapse, which cost investors billions of dollars, could happen on his watch.

Giancarlo, a lawyer who left the CFTC in 2019, earned the nickname ‘Crypto Dad’ from cryptocurrency enthusiasts for his positive attitude towards technology.

He attended the meeting in 2021 in his capacity as counsel for Willkie Farr & Gallagher.

Jacky

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