FTX CEO John Ray III’s filing from Thursday morning reveals a culture of laxity and permissiveness at the imploded crypto dealer, where expenses were approved with color-coded emoji and company money bought employee homes In a potentially serious concern, Almeda was granted exemption from “certain” parts of FTX’s auto-liquidation feature, a practice similar to a margin call in traditional finance. The former Enron restructuring CEO called some of the past management practices “unacceptable.” Earlier Thursday, FTX CEO John Ray III filed a declaration with the United States Bankruptcy Court for Delaware, the latest in the implosion of one of the world’s largest cryptocurrency exchanges. Ray, who helped shepherd Enron through its own bankruptcy, minced no words about the state of the company or the behavior of the former executive team, describing it as one of the worst examples of corporate controls he’d ever encountered. It was a damning remark from someone who has 40 years of legal and restructuring experience. A total lack of financial and corporate controls. 

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”Ray opened his filing torching former management, including former CEO Sam Bankman-Fried, for the failure by leadership to catch and address a stunning, multibillion-dollar hole in the Alameda Research-FTX balance sheets. The losses for investors may reach as high as $8 billion. But with nonexistent or deficient accounting, auditing and disbursement systems, it will take Ray and his forensic investigators “some time” to uncover the truth.