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Ray, a Chicago-based attorney who oversaw the liquidation of Enron Corp.'s collapse in 2001, said he had never witnessed "such an utter failure in corporate controls".
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Ray stated that he was disturbed by "unacceptable" practices at FTX. These included senior staff members accessing customer assets and comingling of assets between Alameda Research and the exchange.
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Allowing Alameda to trade with FTX customer funds and poor management of private keys allows access to assets worth hundreds of millions of dollars.
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Ray stated that FTX US was not run independently of FTX as Bankman-Fried claimed.
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Ray stated that Chapter 11 bankruptcy protection was needed to prevent a run on FTX US, and to allow his team to identify and protect assets.
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Ray's prepared testimony was made amid the arrest of Sam Bankman-Fried (FTX's former chief operating officer), who was taken into custody by Royal Bahamas Police on Monday at the request of the U.S. government.
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According to CNBC, the U.S. will likely ask for his extradition.
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Bankman-Fried was due to appear via remote access before his arrest on Tuesday.
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