Former executives of the bankrupt cryptocurrency exchange FTX are being blamed for the company’s failure to install appropriate financial controls, which is complicating the asset recovery process.

According to a court filing dated on Sunday, representatives of FTX Trading Ltd. claim that the previous management team, which included its founder Sam Bankman-Fried, failed to implement control measures and “placed its crypto assets and funds at risk from the outset.”

The restructuring team said in the report that FTX did not have personnel knowledgeable enough to account accurately for assets and liabilities, nor did it run dedicated financial risk, audit, or treasury departments.

The report was based on interviews with 19 former FTX employees and reviewed over one million documents and financial records.

FTX and its affiliates filed for Chapter 11 bankruptcy in the US in November, and have so far recovered and secured over US$1.4 billion in digital assets in cold storage, with an additional US$1.7 billion in digital assets in the process of recovery, according to the report.

However, FTX users and creditors who lost an estimated US$8 billion worth of digital assets are still waiting to be repaid.

John J. Ray III, CEO, and chief restructuring officer of the FTX Debtors said in a statement following the release of the report that FTX Group was tightly controlled by a small group of individuals who falsely claimed to manage FTX Group responsibly, but in fact, showed little interest in instituting oversight or implementing an appropriate control framework.

In January, liquidators said that they had recovered at least US$5 billion of liquid assets, including cryptocurrencies and securities, in an attempt to repay over nine million FTX users and creditors.

Bankman-Fried, who pleaded not guilty to eight charges related to the failure of FTX in January, is currently out on a US$250 million bail while he awaits a court trial scheduled in October.

In December, Caroline Ellison, former chief of Alameda Research, the trading arm of FTX, and former FTX CTO Gary Wang pleaded guilty to several charges related to operations at the company.

Nishad Singh, former engineering chief of FTX, pleaded guilty to fraud and several other criminal charges in late February.

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