The Troubling Past of Matt Damon’s CEO Resurfaces

The unexpected bankruptcy of FTX, one of the largest cryptocurrency exchanges in the world, caused an earthquake in business and political circles. 

The magnitude of the shock reflects the central role played by FTX and its founder, Sam Bankman-Fried, in building the young industry, which aims to disrupt traditional financial services.

This overnight implosion of a company that was valued at $32 billion in February, with a founder considered one of the richest men in the world, put pressure on the entire crypto sphere.

Investors seem to have lost confidence and are now looking at every crypto firm with suspicion. They wonder if they can trust the accounting presented to them and the statements made by crypto executives. 

“If you are running a background check on someone like Sam [Bankman-Fried] you are not going to find anything, he was unblemished, if you will, prior to this incident,” Anthony Scaramucci, the founder of alternative investment company SkyBridge Capital said at the Bloomberg New Economy Forum in Singapore on Nov. 15.

The day before FTX went bankrupt, Bankman-Fried, who was still the platform’s CEO, said his empire was “fine”. 

But 24 hours later, he called his rival Changpeng Zhao for help. After initially agreeing to acquire FTX, Zhao backtracked a day later, saying he discovered that the situation was even worse than he thought once his teams began due diligence.


Worried Retail InvestorsTroubling PastNo Back Door

Worried Retail Investors

“They lied. FTX lied. I think Sam lied to his employees, his users, his shareholders, regulators all around the world and all the users,” Zhao said during a Twitter event on Nov. 14. “So yes, he should take most of the blame.”

The insolvency of FTX, which filed for Chapter 11 bankruptcy on Nov. 11, was due to a liquidity shortfall when clients attempted to withdraw funds from the platform a few days ago. The liquidity shortfall appears to have been the result of its founder reportedly transferring $10 billion of customer funds from FTX to his cryptocurrency trading platform Alameda Research, according to Reuters, citing two sources that “held senior FTX positions until this week”.

In the past few days, all eyes are on, one of FTX’s big rivals. Uncertainties and questions surround the platform, which acquired the naming rights for the Staples Center, the arena of the National Basketball Association’s Los Angeles Lakers.

Fearing that could be the next FTX, customers rushed over the weekend to withdraw their cryptocurrencies and their money.

“Yeah, i’ve had my doubts since the beginning because of the CEO but if they make it through this, i’ll keep using their service for sure,” posted a crypto investor on social media Reddit.

Social media was full of posts from worried retail investors.

Troubling Past

Cronos (CRO) which is the cryptocurrency issued by, is down 33% in the last seven days according to CoinGecko. The total decline is 93% since its all-time high on Nov. 24, 2021. While the cryptocurrency market has lost more than $2 trillion over the past year, CRO is much more down than bitcoin (BTC), the most popular of the digital currencies, which has lost 76% compared to its peak of November 2021.

“During the weekend there was an increase in all transactions but the platform is stabilized,” spokesperson Matt David told TheStreet. He acknowledged that there had been unusual withdrawals but now things are back to normal.

But the troubling past of CEO and cofounder Kris Marszalek is now the subject of interest. It appears that before cofounding, he ran an Australian company that shut down abruptly angering customers and business partners who claimed they were defrauded, according to the Daily Beast.

The company in question was called Ensogo and was a kind of Groupon, in other words it offered online coupons. But in June 2016, Ensogo abruptly closed, almost simultaneously with the departure of Marszalek, who joined Sellers and buyers had not been notified of the closure of the platform.

“The Board of Ensogo Limited (E88) wishes to advise that it has accepted the resignation of CEO, Mr Kris Marszalek, effective 20 June 2016,” the company announced in a statement on June 21, 2016. “Mr Marszalek is a co-founder of E88 and has been the CEO since August 2014. The Board is yet to announce the appointment of a new CEO.”

The same day, Ensogo asked the stock market authorities to delist the company. It also told them that it planned to shut down the platform for financial reasons.

“E88 no longer intends to provide financial support to any of its subsidiaries which conduct the Company’s flash sales and marketplace businesses,” the company wrote in a regulatory filing. “The voluntary suspension is requested as the withdrawal of financial support is likely to result in the shutting down of those subsidiaries (which may include a form of voluntary administration for those subsidiaries).”

Hong Kong newspaper The Standard wrote that buyers and sellers on Ensogo’s platform were blindsided by the closure and were left with losses. Some sellers reportedly told police they had been defrauded.

Marszalek had co-founded the company, but according to spokesperson Matt David, he no longer had control, nor was he a member of the board that made the decision to shut down the platform, the spokesperson told TheStreet.

“Kris started Beecrazy in 2010. He built it into a profitable e-commerce business. In December 2013, the business was acquired as part of a rollup and IPO by iBuy Group, controlled by Malaysia-based Catcha Group,” David explained.

“In 2014, Kris was asked by Catcha Group to lead the turn-around of iBuy Group. The rolled-up companies took on the name Ensogo. In mid 2016, the Catcha-controlled board decided to shut down Ensogo against Kris’s wishes and advice,” David said.

He continued: “Kris did not hold a board seat and held a low single digit percentage stake in the business at the time. He resigned in response to the proposed shutdown. The shutdown angered many customers and consumers – one of the reasons Kris was opposed to the decision. There was never a finding of wrongdoing under Kris’s leadership.”

No Back Door

As a crypto exchange, FTX executed orders for their clients, taking their cash and buying cryptocurrencies on their behalf. FTX acted as a custodian, holding the clients’ crypto currencies. operates in the same capacity.

FTX then used its clients’ crypto assets, through its sister company’s Alameda Research trading arm, to generate cash through borrowing or market making. The cash FTX borrowed was used to bail out other crypto institutions in the summer of 2022.

At the same time, FTX was using the cryptocurrency it was issuing, FTT, as collateral on its balance sheet. This represented a significant exposure, due to the concentration risk and the volatility of FTT.

“We don’t leverage our customers’ crypto,” David said. “Our system doesn’t allow us to send money to outside accounts or to random addresses.” He added that they “back customers 1:1,’ meaning that they have not borrowed money against their customers’ assets.

The spokesperson also claimed that does not have a back door that would allow its executives to alter the books without the knowledge of third parties like auditors and investors.

“We don’t have a back door,” David said.

FTX’s financials showed that there was a “back door” in the books, created with “bespoke software,” according to Reuters. It was described as a way that Bankman-Fried could alter the firm’s financial records without raising any alerts.

But Bankman-Fried denied the existence of a “back door.”

Crypto promises to release an audit about its balance sheet “within 30 days.”

The company, which is based in Singapore, is privately held. As a result it doesn’t have to publish his financial records. 

Marszalek lives in Hong Kong.

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