Former Treasury Secretary Lawrence Summers called for an expansion in the number of forensic accountants — though not necessarily an increase in regulation — in the wake of the meltdown in Sam Bankman-Fried’s crypto empire.
“A lot of people have compared this to Lehman. I would compare it to Enron,” Summers told Bloomberg Television’s “Wall Street Week” with David Westin. “The smartest guys in the room. Not just financial error but — certainly from the reports — whiffs of fraud. Stadium namings very early in a company’s history. Vast explosion of wealth that nobody quite understands where it comes from.”
The FTX.com crypto exchange, along with trading firm Alameda Research Ltd., have filed for bankruptcy in the wake of a race by FTX users to withdraw their assets. The exodus came amid a plunge in the digital coins issued by the exchange, and after Bankman-Fried took to Twitter to counter the circulation of “unfounded rumors.”
As part of the bankruptcy filings, John J. Ray III was appointed as the new chief executive of FTX Group. Ray previously served senior roles in bankruptcies — including Enron Corp.