FTX Lawyer Calls the Case 'Different Sort of Animal' in First Bankruptcy Hearing

Lawyers for collapsed crypto exchange FTX said on Tuesday, in the company's first bankruptcy hearing, that regulators from the Bahamas, where FTX was headquartered, have agreed to consolidate proceedings in Delaware. From a report: FTX's lawyers, who were brought in by new leadership to handle restructuring, filed an emergency motion last week to secure the move to the U.S. The hearing on Tuesday was the initial step in the resolution of the largest cryptocurrency bankruptcy on record. "What we are dealing with is a different sort of animal," said FTX counsel James Bromley. "Unfortunately, the FTX debtors were not particularly well run, and that is an understatement." Regarding FTX's founder, this was an organization that was "effectively run as a personal fiefdom of Sam Bankman-Fried," an FTX attorney told the court. [...] Bankman-Fried exercised a level of control over the business that "none of us have ever seen," Bromley said, referring to the bankruptcy experts and attorneys the company has employed as part of the restucturing process. "The FTX situation is the latest and the largest failure in this space," Bromley said. "There was effectively a run on the bank, both with respect to the international exchange [...] as well as the U.S. exchange. At the same time that the run on the bank was occurring, there was a leadership crisis [...] The FTX companies were controlled by a very small group of people, led by Mr. Sam-Bankman-Fried. During the run on the bank, Mr. Fried's leadership frayed, and that led to resignations."

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