New FTX CEO John J. Ray III said there was an “absence of record keeping” at the crypto company.
He noted that FTX used the accounting tool QuickBooks, an unusual choice for a multibillion-dollar company.
The remark was reminiscent of a scene in “Breaking Bad,” in which Skylar White says she uses Quicken.
The brightest minds of the world have long debated the question: Does life imitate art or does art imitate life?
On Tuesday morning, FTX’s recently appointed CEO John J. Ray III may have provided a clue.
Ray testified before the House Committee on Financial Services with the goal of uncovering exactly what went wrong at the now-bankrupt crypto exchange.
In a November interview with The New York Times, Ray had called FTX a “complete failure” that was worse than Enron — the energy trading firm that magnificently imploded in 2001 and whose bankruptcy he oversaw. Members of Congress did not let the comparison go unquestioned.
At the hearing, Congresswoman Ann Wagner of Missouri asked Ray to elaborate on the specific ways FTX was worse than “one of the largest corporate frauds in history.”
Ray explained that FTX was “unusual” in that it had “no record keeping whatsoever.” He said that employees would exchange invoices and expenses on Slack, the ubiquitous workplace chatroom.
“They use QuickBooks,” he added, referring to the accounting software.
“QuickBooks?” Congresswoman Wagner asked for clarification.
“QuickBooks, very nice tool, not for a multibillion dollar company,” Ray confirmed.
For fans of the series “Breaking Bad,” the exchange may have seemed familiar.
In a scene from the fourth season of “Breaking Bad,” Ted Beneke’s company Beneke Fabricators is audited by the IRS. He brings in his accountant, Skyler White, to cover for him and asks her to pretend to be incompetent.
As White explains her bookkeeping strategy to the IRS officer, she reflexively asks, “When I input everything into the Quicken, nothing flashed red, so that’s gotta mean it’s ok, right?”
The IRS officer pauses, solemnly, before asking, “Quicken. You use Quicken to manage books for a business this size?”
Both Quicken and QuickBooks are accounting tools developed by Intuit, the financial software company behind TurboTax and Nerd Wallet. Intuit still owns QuickBooks, but sold Quicken in 2016.
QuickBooks typically is used for small and medium-sized businesses, but not ones that have billions of dollars in revenue or assets under management, like FTX and its affiliates did.
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