Feeling Ghosted
The reality was that FTX ignored some of Wall Street’s routine conventions. Messages and documents shared in FTX Slack channels automatically deleted in regular intervals, according to people familiar with the matter. Outsiders sometimes roamed the workplace. People at firms that FTX struck deals with, and developers building on the Solana blockchain projects it supported, could come work and hang out in its offices.
FTX’s organization chart sometimes obscured the special status of Bankman-Fried’s inner circle, current and former employees said. They were the ones with access to vital information, while other top-tier executives grumbled about being left in the dark -- including about Alameda’s relationship to FTX.
Ellison, who knew Bankman-Fried from their time at Jane Street, was promoted to co-CEO of Alameda in 2021 when he stepped back from daily management of that business to focus on FTX. For a time, they were romantically involved as they led their respective businesses, according to the people familiar with the situation, asking not to be named discussing private information.
Considering her lack of leadership experience, her appointment was surprising, one of the people said. Compared with him, she sent fewer tweets and rarely spoke to the press.
Meanwhile, people working in some of FTX’s many side ventures struggled to reach Bankman-Fried for key decisions, according to another former executive. Over the past few months, he was especially uncommunicative. Top lieutenants felt ghosted and privately fretted about finances. In one case, part of the firm nearly missed payroll. In another, bonuses were delayed.
Diverging Fates
Crypto traders could have used a doomsday trade heading into this year’s rout. At FTX, a $60 billion mountain of collateral dwindled to $9 billion, Bankman-Fried wrote in his letter Tuesday. He pointed to a combination of a credit squeeze, a selloff in virtual coins and a “run on the bank.”
As part of the bankruptcy, the firm is being led by John J. Ray III, who oversaw the liquidation of Enron Corp. In a filing last week, he decried FTX’s corporate controls and its “complete absence of trustworthy financial information.”
FTX lacked a system for forecasting how much cash it would have available as revenue came in and bills got paid, Ray wrote. Not all of its main business silos were audited, and one that was performed was conducted by “a firm with which I am not familiar,” he said, noting that it recently announced a metaverse headquarters in Decentraland.
Ultimately, outcomes at Jane Street and FTX diverged: When the Covid-19 pandemic erupted in the US in early 2020, Jane Street’s revenue soared 54% to $10.6 billion in the 12 months that followed. When crypto prices slumped this year, and the depth of its entanglements with Alameda surfaced, FTX collapsed.
But Bankman-Fried’s unraveling still had an unwelcome impact on Jane Street, elevating its profile. Google Trends, a tool for tracking the public’s interest, shows searches for its name started climbing early this month.
--With assistance from Olga Kharif and Yueqi Yang.
This article was provided by Bloomberg News.