John Ray, the newly appointed CEO of FTX, said his predecessor Sam Bankman-Fried and his senior coterie had "free rein" over the troubled cryptocurrency exchange and its sister trading entity Alameda Research.
There were no distinctions between FTX, Alameda Research, and other firms which filed for bankruptcy protection last month, Ray said during a congressional hearing before the House Financial Services Committee on the fall of FTX and its effects on the cryptocurrency market.
Ray said the company's owners "could really run free rein across all four silos."
Bankman-Fried, the company’s founder, had also been scheduled as a witness after public discussions to ensure his participation, however, he was detained in the Bahamas Monday night.
Ray was the only witness left.
FTX, once valued at $32 billion, collapsed last month following a run on its native utility FTX Token (CRYPTO: FTX).
After Bankman-Fried left his position as CEO of FTX, Ray took over.
Worst Mess Of Career, Says New CEO
The newly appointed executive referred to FTX's financial situation as the worst mess he had ever seen in his career, noting that the multibillion-dollar company, if it kept any records of financial transactions at all, conducted its accounting using the small business bookkeeping program Quickbooks.
Ray described it as a "paperless bankruptcy," saying that the lack of documentation was "really unprecedented."
Bankman-Fried is charged with cheating investors and providing Alameda with unique access to FTX client funds.
Bankman-Fried and other executives also provided themselves with outstanding loans through Alameda.
According to Ray, FTX's new management has been working with U.S. regulators and intends to "turn over any information that would be relevant to them."
‘Look Forward To Getting SBF’s Lies On Record’
Rep. Patrick McHenry, R-NC, a ranking Republican, called Bankman- Fried's arrest "welcome news," but cautioned that it did not explain what went wrong at FTX.
He added that he still needed to speak with the former FTX executive.
The North Carolina Republican said: "I look forward to getting his lies here on the record, under oath."
He declared that he and top House Committee Chair Maxine Waters, D-CA, still intended to advance legislation pertaining to digital assets.
An extensive regulatory framework for stablecoins is being discussed between the two parties.
At the hearing on Tuesday, Waters said: “This committee will not stop until we uncover the full truth behind the collapse of FTX.”