If you owe the bank a grand and can’t repay it, you’re in trouble. If you owe the bank a billion and can’t repay it, the bank’s in trouble. If the bank owes you a billion and can’t repay it, the system’s in trouble.
When the cryptocurrency exchange FTX filed for bankruptcy last week, it didn’t actually know how much it owed customers, the company’s new chief executive, John Ray III, said in a filing. “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” Ray wrote. That’s a weighty statement, given he worked on the Enron bankruptcy, the most notorious example of corporate fraud in recent American history.
