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Here's the administrator's filing with the Bankruptcy Court for the District of Delaware: https://d1e00ek4ebabms.cloudfront.net/production/uploaded-files/fdd-52

Here's the administrator's filing with the Bankruptcy Court for the District of Delaware: https://d1e00ek4ebabms.cloudfront.net/production/uploaded-files/fdd-52615f0a-fb09-41ce-a398-b97b20bc1c36.pdf https://d1e00ek4ebabms.cloudfront.net/production/uploaded-fi... Page 22 is exciting: "The Debtors did not have the type of disbursement controls that I believe are appropriate for a business enterprise. For example, employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis." .. and: "In the Bahamas, I understand that corporate funds of the FTX Group were used to purchase homes and other personal items for employees and advisors. I understand that there does not appear to be documentation for certain of these transactions as loans, and that certain real estate was recorded in the personal name of these employees and advisors on the records of the Bahamas."

pjc50 4y ago
It's a fun read, in a sort of True Crime sense. They had no financial controls whatsoever and just got people to wire them billions of dollars.
- Alex3917 4y ago
  > It's a fun read, in a sort of True Crime sense. It sounds like it was purposely written to be the cold open of the inevitable Netflix miniseries.
retube 4y ago
Matt Levine's piece yesterday also mentions a $1bn loan ("loan") from FTX to SBF
foostepsndpics 4y ago
It's interesting that, under every silo's balance sheet shown in that document, there is a footnote saying that customer crypto deposits are not represented in the balance. Is that his way of saying that they haven't been able to figure out where the customer crypto deposits were represented in the ledgers?
pcl 4y ago
> employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis This seems like a totally legit approach to me -- ChatOps for expenses, essentially. The usability of "an on-line 'chat' platform" (presumably Teams / Slack / Discord / equivalent) is much better for the employees than most finance tools, and most chat apps these days should have pretty great auditability capabilities. (Of course, the rest of this FTX fiasco is a total disaster.)
- exo762 4y ago
  AFAIK they were using Signal with auto-delete turned on. If true, this is a great way to avoid auditability.
  - ninjin 4y ago
    Well, they are learning from the “best”: politicians [1]. [1]: https://www.theguardian.com/politics/2019/dec/17/tories-switch-to-messaging-app-signal-to-curb-whatsapp-leaks https://www.theguardian.com/politics/2019/dec/17/tories-swit...
  - gruez 4y ago
    This is actually standard within financial institutions and big corps. It's not implemented as "signal with auto-delete turned on", but rather as retention policies on emails or whatever.
    - hermitdev 4y ago
      Except the retention on emails, for instance, is usually 7 years. Not exactly the same as auto delete after read... It's an apples to oranges comparison.
      - compiler-guy 4y ago
        And the relevant transactions and approvals get recorded in other media for even longer periods in auditable forms. A slack exchange saying, "Hey, would you approve this expense?" "Sure" isn't a problem. It's the lack of formal follow ups in an auditable medium that is.
deeblering4 4y ago
> For example, employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis. So... the payment system was a discord bot?
- kneebonian 4y ago
  Honestly having had to deal with the hell that is a purchasing request in large corporations I think I'd rather go with a discord bot than have to spend 6 months justifying why I need to purchase a $50 piece of software to do my job.
  - ceejayoz 4y ago
    Yeah, but the next paragraph indicates disbursements included entire houses.
    - klyrs 4y ago
      I mean, who wouldn't want that? Aside from that whole "embezzlement" issue.
  - prepend 4y ago
    Similar. The best reimbursement system I’ve worked with was for a company that just automatically approved everything under a few thousand dollars (never states a hard threshold) based on individual professional judgement to spend funds to advance company goals. And they audited every purchase ever made when you went for partner. It was both liberating and terrifying to have that much freedom. The audits weren’t widely available so it’s hard to know how effective this was, but it was pretty rare to hear about people not making partner because of it and they were super thorough about every charge, frequently asking for detail.
    - deleted 4y ago
      [deleted]
  - 4y ago
edf13 4y ago
One of the biggest mistakes in this whole fiasco is from the people who enabled this - how (why?) on Earth were they given such ridiculous sums of money… with 0 oversight!
- lupire 4y ago
  Only true if the investors weren't sharing in the embezzlement.

pjc50 4y ago

It's a fun read, in a sort of True Crime sense. They had no financial controls whatsoever and just got people to wire them billions of dollars.

Alex3917 4y ago
> It's a fun read, in a sort of True Crime sense. It sounds like it was purposely written to be the cold open of the inevitable Netflix miniseries.

retube 4y ago

Matt Levine's piece yesterday also mentions a $1bn loan ("loan") from FTX to SBF

foostepsndpics 4y ago

It's interesting that, under every silo's balance sheet shown in that document, there is a footnote saying that customer crypto deposits are not represented in the balance. Is that his way of saying that they haven't been able to figure out where the customer crypto deposits were represented in the ledgers?

pcl 4y ago

> employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis This seems like a totally legit approach to me -- ChatOps for expenses, essentially. The usability of "an on-line 'chat' platform" (presumably Teams / Slack / Discord / equivalent) is much better for the employees than most finance tools, and most chat apps these days should have pretty great auditability capabilities. (Of course, the rest of this FTX fiasco is a total disaster.)

exo762 4y ago
AFAIK they were using Signal with auto-delete turned on. If true, this is a great way to avoid auditability.
- ninjin 4y ago
  Well, they are learning from the “best”: politicians [1]. [1]: https://www.theguardian.com/politics/2019/dec/17/tories-switch-to-messaging-app-signal-to-curb-whatsapp-leaks https://www.theguardian.com/politics/2019/dec/17/tories-swit...
- gruez 4y ago
  This is actually standard within financial institutions and big corps. It's not implemented as "signal with auto-delete turned on", but rather as retention policies on emails or whatever.
  - hermitdev 4y ago
    Except the retention on emails, for instance, is usually 7 years. Not exactly the same as auto delete after read... It's an apples to oranges comparison.
    - compiler-guy 4y ago
      And the relevant transactions and approvals get recorded in other media for even longer periods in auditable forms. A slack exchange saying, "Hey, would you approve this expense?" "Sure" isn't a problem. It's the lack of formal follow ups in an auditable medium that is.

deeblering4 4y ago

> For example, employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis. So... the payment system was a discord bot?

kneebonian 4y ago
Honestly having had to deal with the hell that is a purchasing request in large corporations I think I'd rather go with a discord bot than have to spend 6 months justifying why I need to purchase a $50 piece of software to do my job.
- ceejayoz 4y ago
  Yeah, but the next paragraph indicates disbursements included entire houses.
  - klyrs 4y ago
    I mean, who wouldn't want that? Aside from that whole "embezzlement" issue.
- prepend 4y ago
  Similar. The best reimbursement system I’ve worked with was for a company that just automatically approved everything under a few thousand dollars (never states a hard threshold) based on individual professional judgement to spend funds to advance company goals. And they audited every purchase ever made when you went for partner. It was both liberating and terrifying to have that much freedom. The audits weren’t widely available so it’s hard to know how effective this was, but it was pretty rare to hear about people not making partner because of it and they were super thorough about every charge, frequently asking for detail.
  - deleted 4y ago
    [deleted]
- 4y ago

edf13 4y ago

One of the biggest mistakes in this whole fiasco is from the people who enabled this - how (why?) on Earth were they given such ridiculous sums of money… with 0 oversight!

lupire 4y ago
Only true if the investors weren't sharing in the embezzlement.