FTX, the company of former crypto enfant prodigy Sam Bankman-Fried, has sent private letters to individual politicians who were recipients of donations sent by the former CEO and founder demanding the return of the funds.
According to the text of the letters sent, the funds should be returned to FTX by the end of the month including interest to date.
FTX: crypto exchange tries to recover some ground
The letter is part of the recovery plan that the new CEO, John Ray III, has put in place to satisfy creditors and subsequently dust FTX off again.
On Twitter, the very timely Watcher Guru highlighted the move with his usual flair:
“JUST IN: FTX sends “confidential letters” to politicians demanding they return the millions of dollars SBF donated, by the end of the month”.
The debt collection move had already been announced on 19 December when a meeting determined how the letters would be sent.
If what is owed by the politicians is not met, the creditors “reserve the right to initiate actions before the bankruptcy court to compel the return of such payments.”
The amounts to be paid must include accrued interest, which begins from the date the funds were sent.
The company is working to recover the amounts owed by seeking resources from any source.
The questioning of Sam Bankman Fried
One of the moves put in place was to ask the court for permission to question Sam Bankman Fried’s family and the rest of the company’s former management in Chapter 11.
Moreover, any hidden funds or assets of the company could be liquidated to cover what the company owes as soon as possible.
In the meantime, while waiting for the American political class to examine its conscience, suffering the consequences were the country’s best resources, that is, the students.
FTX, through Sam Bankman Fried, had also donated several scholarships to Florida students who, to their dismay, were deprived of the award they received.
According to Ray, the crypto company’s new CEO, FTX can relaunch itself and the revival is starting from the very foundation, namely, repaying creditors. However, there is an apparent short-circuit given by the compensation to the bankruptcy trustee himself.
“Everything is on the table. If there’s a path forward on that, then we’re not only going to explore it, we’re going to do it.”
These were the hopeful words of the executive interviewed shortly after taking office at the Wall Street Journal last year.
John Ray firmly believes that the company can not only recover users’ money, but can even have a bright future.
Later on, in the same interview, he also hinted at something else:
“There are stakeholders we are working with who have identified what they see as a profitable business.”
With this cryptic phrase, the new CEO will explain later, there is a willingness to investigate whether the company’s own workforce wants to invest in the new FTX, but that is not all.
The company, even after its bankruptcy, has received several proposals to buy parts of the business, and these with proper negotiation could bring in significant proceeds that Ray says should at least be evaluated.
However, while the executive shows an iron will for recovery and very clear ideas as to how to accomplish FTX’s turnaround and liquidate creditors, competence pays off.
According to Coindesk’s revelation, John Ray III, the new CEO of FTX, was reportedly paid a disproportionate amount for the weeks immediately after assuming his position.
The salary amount of the bankruptcy trustee and new FTX CEO of the ruined company was $690,000 in 2022
The information can be found in documents from the bankruptcy hearing held yesterday in which Ray took part because of his role.
John Ray III is no stranger to bailouts of large corporations, and his compensation, despite the controversy, may be due to the rescue of another major disaster of the past, that of Enron.
In the Enron disaster, Ray worked his way to the helm of the company in the recovery phase, the same role he holds now, demonstrating how effective his work is.
The news of course immediately made the rounds on the web and particularly on Twitter, Watcher Guru took it up like this:
“JUST IN: New FTX CEO John Ray was paid $ 690.000 for his first weeks on the job.”
The executive had taken office at FTX’s crypto company as of 11 November 2022.
The amount of $690,000 was accumulated from the date of the executive’s induction at the end of the year.
The tally of 75 working hours per week including Christmas holidays was the real key to explain such a high amount for a compensation.
The total hours worked by John Ray III are an important factor but not the only one useful in explaining the amount.
By his own admission, the CEO’s hourly rate is $1,300; with this amount, it is easy to see how a compensation of $690,000 could be generated.
Controversy aside, the executive is succeeding in his efforts to catch up and slowly give the money back to the defrauded users.
There is still a long road to victory, and the debt collection phase is only part of it.
The real challenge for the new leadership of FTX in Chapter 11 will be to restore the company’s luster and put it in a position to make a profit and walk on its own feet again.