FTX, a multi-billion dollar cryptocurrency company, has faced control failures due to inadequate financial and accounting controls, an inadequate group management structure, and the use of software not suitable for large companies, according to CEO John Ray III. In a court filing in April 2021, Ray gave a detailed account of the deficiencies that his restructuring team had identified at FTX.
Ray noted that FTX relied on a hodgepodge of Google documents, Slack communications, shared drives, and Excel spreadsheets to manage its assets and liabilities. The company used QuickBooks for its bookkeeping, which Ray said was designed for small and mid-sized businesses and not for a company that operates across multiple continents and platforms like FTX. As a result, around 80,000 transactions were left as unprocessed accounting entries in “catch-all QuickBooks accounts titled ‘Ask My Accountant.'”
According to Ray, FTX was run by three…
