FTX Creditors Warned of Possible Online Scammers
Hundreds of institutional investors and millions of individuals FTX and Alameda creditors are desperate to get their capital back three months after the firms filed for chapter 11 bankruptcy protection in the United States. However, the acting FTX CEO John Ray III has warned that the company may never repay all creditors wholly as over $8 billion is missing from the company’s balance sheet.
As a result, Ray has previously indicated that the bankrupt company may need to reopen to raise more capital to repay creditors wholly. Furthermore, FTX has several independent companies in several countries on different continents.
Nonetheless, billions of assets remain resting with FTX and Alameda awaiting the court’s approval to liquidate.
FTX and Alameda Scams
With few detailed communications on FTX repayment progress, scammers have been spotted trying to fill the gap. Reports of FTX creditors getting promises to double repayment if they click provided links have increased lately. As such, FTX and Alameda’s creditors have been cautioned to remain vigilant of such scammers with ill intentions.
“We are aware of active third-party scams and frauds seeking to take advantage of FTX customers. Please note that neither the FTX debtors nor any of their agents will ask you for money, fees, payments, or any passwords for your accounts in connection with the return or prospective return of customers’ assets,” FTX noted.
The prevention of such phishing scams may be challenging as all is needed to compromise FTX customers is the goodwill on asset return. With crypto prices showing recovery signs, the FTX investors would be satisfied to have their assets return on time to also take profits after a year long bear market.
Silvergate Investigated by US DoJ Over FTX and Alameda
Silvergate Capital Corp. (NYSE: SI) is reportedly under investigation by the United States Department of Justice (DoJ) fraud unit for its dealings with the bankrupt FTX and Alameda firms. According to a report by Bloomberg, the United States prosecutors are examining Silvergate’s hosting of accounts tied to former FTX boss SBF’s businesses. However, the crypto-friendly bank has not been accused of any wrongdoing as the inquiries are in the early stages of investigations.
Reportedly, people familiar with the matter confirmed that the investigation on Silvergate began weeks ago as the prosecutors try to understand the year-long FTX fraud scheme. Furthermore, over $8 billion is reportedly missing from the FTX balance sheet, which is reportedly misappropriated by Alameda.
Bigger Picture of Silvergate Investigations
Following the report by Bloomberg, Silvergate shares experienced heightened volatility on Thursday. According to market data provided by MarketWatch, Silvergate shares closed Thursday trading at $20.97, up 29.13 percent.
However, the SI shares dropped as much as 18.26 percent during the after-hours. The $514.14 valued company has previously indicated that it is well equipped to deal with crypto volatility despite the prolonged bear market.
In a prior announcement, the bank announced that it had minimal exposure to the FTX through Genesis. Notably, DCG’s Genesis Trading recently filed for chapter 11 bankruptcy protection following huge exposure to FTX and Three Arrows Capital (3AC).
“Silvergate’s deposit relationship with Genesis was less than $2.5 million as of both December 31, 2022, and January 19, 2023. Genesis is not a custodian for Silvergate’s bitcoin-collateralized SEN Leverage loans and Silvergate has no outstanding loans to nor investments in Genesis,” the company noted.
Meanwhile, the company continues to operate normally despite the crypto drawbacks.
The Drama Continues: FTX And Alameda Demand Loan Repayment From Voyager
According to a lawsuit filed by the FTX lawyers on Monday in the US Bankruptcy Court for the District of Delaware, the bankrupt crypto trading firms want to recover $445.8 million debt that was paid to Voyager Digital before the maturity date. However, Voyager’s creditors claim that Alameda’s “inequitable and fraudulent conduct” cost Voyager and the creditors between $114 million to $122 million.
The inter-web of connections between bankrupt crypto companies has further complicated the situation and called for further liquidation. Furthermore, Voyager Digital has claimed Three Arrow Capital has not repaid its loan of over $660 million.
Notably, Binance.Us won the bid to acquire Voyager assets late last year worth approximately $1.022 billion. As such, FTX and Alameda could be looking to CZ once again for a bailout, which has been rejected unanimously by the creditors.
According to the lawsuit filings, Alameda wants Voyager to repay the debt paid before filing for bankruptcy in November. The FTX lawyers argued that the loan money paid to Voyager had not matured as agreed.
The Aftermath Of Crypto Crashes
The shock waves from the FTX and Alameda’s collapse are still evident in the crypto market today. With over $8 billion missing from the FTX balance sheet, according to CEO John Ray III in previous hearings, more pain is expected in the crypto market in the near future. Moreover, the recent crypto relief rally has seen most short-term holders and miners offload their digital assets bag.
Crypto regulations are expected to get tougher worldwide following the collapse of major firms in 2022. Nonetheless, global regulators are torn between harsh policies and softer ones due to competition among nations to attract international crypto investors.
Australian Regulator Raised Red Flags Months Before Collapse FTX Collapse
According to a recent publication by the Australian Securities and Investments Commission (ASIC), the country’s market regulator has had internal discussions about FTX’s planned debut in Australia in March 2022.
Some have expressed concern over the return on investment promises, as reported by The Guardian. The regulator also issued FTX a Section 912C notice in the same month, requiring the crypto exchange to disclose information on its activities and determine if it meets the requirements for an AFSL license.
Request for documentation
Through this notice, ASIC may request the licensee to provide documentation indicating the financial services offered and the nature of their financial services business to determine if they meet the “fit and suitable person” test.
The ASIC briefing document reveals that between the regulator’s initial concerns and FTX’s collapse on November 11, the exchange was placed under monitoring and received three notifications from ASIC.
FTX obtained its AFSL in December 2021 by acquiring IFS Markets, ahead of its planned launch in March 2022. Chairman of ASIC, Joe Longo, noted that this allowed FTX Australia to bypass typical scrutiny for new AFSL licensees.
The now-defunct firm committed to informing customers of fraudulent crypto transactions and cooperating with the Australian Federal Police in investigating crypto-related crimes.
Delaware Court Releases A Long List of Institutional Investors that Credited FTX
The FTX and Alameda implosion, which has been described as the fastest big corporate failure in American history, affected international government agencies, media corporations, airlines, and manufacturing companies, among many others. Judge John Dorsey, who is overseeing the bankruptcy proceedings, allowed the FTX lawyers to publish a list of institutional investors that credited money to the failed crypto exchange.
Some of the notable names include Mercedes Benz, American Airlines, Bloomberg Finance, Binance, Coinbase Global, and Microsoft among others. However, the Judge allowed the names of the FTX individual creditors to remain sealed for another three months, as more hearings take place.
Notably, the long list of FTX institutional creditors does not include the amount of capital invested. However, it can be assumed to cumulatively be in billions of dollars, with the top 50 creditors claiming about $3.1 billion. With the list containing 116 pages, hundreds of institutional investors are looking at John J Ray III and SBF to produce much-needed answers.
FTX Messed Up Big Time
The FTX collapse has instilled a lot of fear in centralized crypto exchanges and also reduced cash inflows in the blockchain industry. The FTX case has been complicated by the fact that SBF donated millions of dollars to U.S. politicians on both sides of the aisle. Nonetheless, millions of FTX individuals-creditors and institutional investors are wailing for Justice.
However, the investigators have a challenging time recovering all the FTX assets. Moreover, John Ray has indicated in previous hearings that there is a possibility that some FTX crypto wallets are still missing and may never be recovered.
As such, the crypto market is expected to receive clamouring regulations as lawmakers around the world try to contain greed.
FTX Lawyers to Depose SBF’s Family – SBF’s Nother Not Co-operating
If the catastrophe in cryptocurrency prices in the first half of 2022, combined with the Terra Luna crash, weren’t enough to jolt the market, the FTX debacle in the latter stages of last year undoubtedly brought more anguish for the sector.
The FTX saga, however, continues and in the latest development, according to court documents cited by Bloomberg, FTX wants to ask Sam Bankman-Fried’s family whether they got any financial advances from the insolvent cryptocurrency exchange.
FTX’s attorneys asked Judge John Dorsey in the District of Delaware to grant their request of questioning Joseph Bankman, Barbara Fried, and Gabriel Bankman-Fried — SBF’s parents, mother, and brother, respectively — under oath about any financial aid they may have received from the exchange.
They should provide financial records about their individual wealth, according to FTX lawyers, as part of the company’s mission to recover funds that could be used to pay back creditors, they claimed in the filing.
SBF’s mother, Barbara Fried, “has ignored the requests altogether,” Coindesk reported. “The debtors have not received meaningful engagement or any response from [former chief engineer Nishad] Singh or Mr. Gabriel Bankman-Fried,” the report added.
“The Debtors and their advisors have been working tirelessly and nonstop over the last 70 plus days to implement controls, recover and protect estate assets. Key questions remain, however, concerning numerous aspects of the Debtors’ finances and transactions,” the filing continued.
In 2020, SBF’s brother Gabriel contributed to the establishment of Guarding Against Pandemics, a lobbying organization dedicated to promoting legislation to stop pandemics like COVID-19 in the future. The organization that sponsored federal lawmakers received some of SBF’s money directly, and he and his brother also gave money to specific campaigns personally.
U.S. regulators in New York have accused Bankman-Fried of fraud; he has entered a not-guilty plea. The collapse of FTX has harmed the cryptocurrency markets and the credibility of the sector.
FTX Lawyers Object to the Formation of an Independent Examiner Citing Unwarranted Cost
The FTX bankruptcy case has attracted the attention of U.S. lawmakers, several states, and regulatory agencies. In the latest update, FTX debtors, the creditors committee, and the Bahamas Team (JPL) filed three objections to the US Trustee’s motion for an Independent Examiner.
Calling the FTX implosion the fastest big corporate failure in American history, the Department of Justice’s U.S. Trustee overseeing FTX’s bankruptcy case requested the court to initiate an independent probe in early December.
However, FTX lawyers have vehemently objected to the formation of an independent examiner citing cost inefficiency. According to the lawyers, an independent examiner could cost the bankrupt company up to $100 million and provide no unique content than the newly appointed CEO John J. Ray III.
As a result, the lawyers implied in a recent hearing that the cost would not provide the much-needed answer to creditors who have lost billions in the FTX scuffle.
“The appointment of an examiner, with a mandate to be determined, can be expected to cost these estates in the tens of millions of dollars. Indeed, if history is a guide, the cost could near or exceed $100 million,” the lawyers argued.
FTX Implosion Implores More Pain In Crypto Market Ahead
The FTX and Alameda bankruptcy case is in the third month and the creditors may have to wait much longer to get needed answers. FTX mastermind SBF is expected to return for a hearing in October. Meanwhile, FTX acting CEO Ray recently said in a hearing that crypto wallet keys are missing, which may take a lot of time and effort to unravel.
As such, companies like Genesis Trading which owes Gemini Earn customers over $900 million could wait much longer for a reimbursement.
BlockFi Exposed: Leaked Financials Reveal Shocking $1.2 Billion FTX Exposure
BlockFi, a fallen cryptocurrency lending, and borrowing platform have reportedly posted uncensored financials revealing a $1.2 billion exposure to the FTX exchange and Alameda Research. BlockFi has $415.9 million in assets linked to the FTX exchange and $831.3 million in loans to Alameda.
The M3 Partners, advisor to the creditor committee admitted that they accidentally posted the uncensored version. A filing from November 24th showed that the creditor committee objects to BlocFI paying key employees $12.3 million in retention payments despite their limited operations and assets. The filing also contained ‘trade secrets, confidential research, development, and commercial information.
What happened to BlockFi?
BlockFi filed for Chapter 11 Bankruptcy on November 28th following the FTX’s collapse due to financial troubles. On the same day, BlockFi filed a lawsuit against Emergent Fidelity Technologies, a holding company owned by Sam Bankman Fried. The lawsuit aimed at getting back collateral that the company had pledged to pay on November 9th, including shares in Online brokerage Robinhood.
During the first hearing of bankruptcy proceedings on 29th November 2022, the company’s lawyer stated that they had $355 million in assets tied to the FTX exchange and $680 million in loans to Alameda. But as the value of bitcoin has increased now, the value of these assets has increased.
The impact on the crypto industry
The new revelation of BlockFi’s exposure to FTX and Alameda has raised concerns among experts and investors. The crypto industry is so volatile and unpredictable. Regulators are of the opinion that the crypto industry is not mature enough to deal with the problems at this scale. They are now making the laws and regulations stricter so that innocent investors may not become prey to fraudulent activities in the system.
The public still has got belief in the judiciary system of the U.S. and is hoping that they will always work in the best interest of the public. The value of Bitcoin is still gaining as people see value in cryptocurrency. But we advise you to do your own research before any major investment in the crypto industry.
Former President of FTX US Raises $5 Million for New Cryptocurrency Firm
Former FTX US President Brett Harrison has raised $5 million for a new cryptocurrency firm from Coinbase Ventures and Circle Ventures. In light of his close relationship with Sam Bankman-Fried and his troubled cryptocurrency exchange, the former CEO is striving to carve his next steps with his new firm–Architect.
“It’s a software company aiming to build institutional-grade infrastructure to connect various crypto venues across decentralized and centralized exchanges. We’re trying to make it easy to interface with either qualified custodians or self-custody. We’re building this single interoperability platform across crypto services with a focus on trading,” Harrison told TechCrunch.
Coinbase Ventures, Circle Ventures, SV Angel, SALT Fund, P2P, Third King Venture Capital, and Motivate Venture Capital have all contributed money to the startup’s pre-product fundraising round. It also has angel investors Kalos Labs CEO Shari Glazer and Skybridge founder and former White House communications director Anthony Scaramucci.
Harrison’s new project and fresh cash round come after the former president of FTX US announced his departure from the company and his relationship with co-founder SBF. He had earlier said that his relationship with SBF “had reached a point of total deterioration.”
He continued that it was challenging for Architect to raise funding because of the collapse of FTX. Harrison, though, thinks that his long-standing relationships with his investors helped the initiative get its initial finance.
Harrison said in a tweet, “I’m grateful to our partners, who’ve shown me that they believe above all in the resiliency of this industry. Architect is fortunate to draw upon their wide-ranging expertise, which spans all areas of the digital asset landscape as well as traditional finance and trading.”
Even then, several people on Twitter quickly expressed worries about Harrison’s past, recalling his previous position at FTX US, even if Architect may be looking toward the future of Web3.
Will Gemini Follow in the Footsteps of FTX and Genesis? Here’s What You Need to Know!
Gemini, world one of the largest crypto exchanges and the brainchild of the Winklevoss twins is now in deep liquidity trouble. The founders are fighting to get back the customer’s funds held on Genesis, but the recent filing of bankruptcy may make bitter things worse.
However, the founders of Gemini are pretty confident in recovering their stuck-up funds. But, the 2022 history says, the platforms which received more than 60% exposure also filed for bankruptcy in the next few days.
After Terra’s collapse, Celsius Network & 3 Arrow Capital filed for bankruptcy, while BlockFi filed after the collapse of the FTX exchange. So will Gemini move ahead and also file for bankruptcy Or do they have any backup plan?- Let’s have a glance at their reserve!
- Gemini Bitcoin, Ethereum, and stablecoin reserves have declined considerably during 2022. Bitcoin reserves have depleted from 312.6K to 135.9K while Ethereum dropped from 4.12 million to 917.9K and stablecoin reserves slashed from 626.2 million to 64.06 million.
- The ETH reserves dried up mostly due to one of Gemini’s biggest clients moving their ETH into a custody service and stablecoins dropped as Gemini moved most of its GUSD reserves into MakerDAO.
- The on-chain data of Bitcoin flows between exchanges indicated that the Gemini exchange has stopped receiving BTC from other exchanges. This suggests that traders and investors consider Gemini as a less desirable platform to hold their assets
- Besides, the Gemini spot trading volume has been falling since mid of 2021 which peaked at 3.5K just before the market collapsed in May 2021 and reached 0.6K in December 2022.
- Moreover, the BTC/USD pair was also down by more than 58% in December 2022 in annual terms.
Liquidity issues have become pretty common in the crypto space but Gemini users can still withdraw their money from the same Earn program, while it has to be noted that some large users have sued Gemini demanding their money back.
The founder, Cameron Winklevoss in a recent tweet revealed the next course of action to take legal action against DCG (parent company of Genesis) and its CEO Barry Sibert. He also assures his 320K+ Earn users to recover their stuck-up funds and the bankruptcy may make the process a little simpler.
Rebooting FTX Saga: Can It Overcome Its Troubled Past? Experts Weigh In.
The current CEO of FTX, John Ray, recently gave an interview in which he discussed his plans to reboot the platform, citing positive feedback from consumers regarding the quality of FTX’s technology. The former CEO of FTX, Samuel Bankman-Fried, who has faced backlash in the past, has praised Ray’s decision, stating that it is the best option for FTX’s clientele.
However, it remains to be seen whether the reboot is even feasible at this point and if it is, whether it will be successful in restoring the platform to its former glory.
Experts Pitch In
As such, a number of experts in the field are pessimistic about the prospects of FTX making a comeback. Liam Hennessy, a partner at Australian law firm Gadens and an expert in digital assets, believes that it would be extremely challenging for FTX to attract new customers or investors due to the company’s damaged reputation and lack of confidence.
Binance Australia CEO Leigh Travers told the media outlet Cointelegraph that she expects it to be challenging for FTX to obtain a license again in the new year due to heightened regulation and scrutiny from regulators.
Senior law lecturer at RMIT University’s Blockchain Innovation Hub, Aaron Lane, said that while it makes sense for FTX to contemplate resurrecting the exchange business through the Chapter 11 process, which allows the company to present a plan to continue the business and pay back creditors over time if approved by the court, it is uncertain whether a comeback would be successful given the significant damage done to the company’s reputation.
It is clear that a significant amount of effort and time would be required to regain trust and rebuild the brand.
SOL Price Explodes: Solana’s Comeback From FTX Crash Lows, Is This the Start of a Massive Rally?
The Solana (SOL) cryptocurrency has seen its value more than double since reaching its lowest point following the FTX and Alameda incident. It has moved from trading below $9 in the last three weeks to as high as $24.75.
Market analysts are optimistic about the long-term potential of the Solana ecosystem, citing its vibrant global community and dedicated DeFi developers as reasons for this optimism.
As of today, the total value locked (TVL) in the Solana ecosystem stands at approximately $258 million, down from over $11 billion a year ago.
Despite the decline in TVL, the Solana ecosystem has seen an increase of approximately $50 million since the collapse of FTX and Alameda. Ethereum co-founder, Vitalik Buterin, believes that the Solana network has a promising future without the presence of bad actors. Riyad Carey, a research analyst at cryptocurrency data firm Kaiko, commented, “with Alameda gone, the protocol is in some sense free of that baggage and can become more community-centric.”
However, the Solana market is showing signs of bearish behavior following a strong two-week rally. One notable factor is the daily traded volume, which dropped by over 48% to $736,053,464 on Friday. Additionally, the Solana price in the 4-hour time frame is on the verge of breaking a three-week bullish trend line, which could potentially push the price to the next consolidation level of around $16.
The Solana ecosystem is supported by a dedicated team of DeFi developers and over 2,000 validators, which has led market analysts to remain optimistic about the network’s potential for growth. With the exit of FTX, the future of Solana looks promising as the network continues to gain traction.
As Messari Senior Research Analyst, Tom Dunleavy, notes “It is certainly an open question as to how sticky this new level of volume is; however, at the very least, a consistent level of volume with FTX exiting the ecosystem is a positive sign.”
FTX Exchange To Make a ComeBack – CEO John J Ray III Makes Bold New Plans
The fallen cryptocurrency exchange – FTX is on its journey to restart itself under the new leadership of CEO John J Ray III. John stated that he is investigating the plans to restart the exchange which was down since November 2022.
Many high officials have been accused of fraudulent activities at FTX. However, the client base still applauds the company’s technology and suggested that the company still has a potential reboot system that may benefit its clients. John has now established a team to investigate the probability of relaunching FTX.com which is the primary international exchange operated by the company.
John also plans to improve security, and customer experience and expand its asset range available on FTX. He also plans to invest heavily in state-of-the-art security measures and hire risk management to continuously monitor and upgrade the system. In addition to that, new features and tools will be introduced to make the platform more user-friendly and easily access information.
Previously John and SBF had disagreements on whether or not FTX should have filed for Chapter 11 bankruptcy in 2022. SBF has criticized John’s approach while dealing with the situation. John stated that SBF’s remarks were “unhelpful and self-serving”
In a recent development, the team has located $5 billion in cash and liquid cryptocurrencies. John termed this as a “Herculean effort” to sort the business’s finances. The price of FTX’s native cryptocurrency, FTT, is currently being traded at $2.41, representing an increase of 34% in the past 24 hours and a 68% jump during the last seven days.
It remains to be seen whether or not Ray’s plans for FTX will come to fruition, but many in the crypto industry are optimistic about the exchange’s future under his leadership.
Sam Bankman Fried Responds to John’s Statement
Sam Bankman Fried – Ex-founder of FTX – has shared his thoughts on the new CEO John J. Ray III’s recent statement about the potential restart of the exchange. He said that he is happy that John is encouraging the idea of restarting FTX even though he was previously not in terms with it. Sam also stated that he is waiting for John to acknowledge the fact that the FTX US branch is financially stable and can return the money to the customers.
Ripple CEO Reveals $10Mn Exposure To Bankrupt FTX Exchange
While Ripple’s conflict with the SEC persists, it appears that it has also encountered other issues. Let’s see what’s new with Ripple.
Ripple CEO reveals exposure to FTX!
In a recent fireside discussion on CNBC’s Tech Transformers at Davos, Ripple CEO Brad Garlinghouse revealed that the blockchain payments company had exposure to FTX. He disclosed that Ripple leased around $10 million in XRP to the now-defunct crypto exchange.
He said, “… we did have some exposure to FTX,” the Ripple chief said. “I think … we’ve publicly shared before there’s around just over $10 million of XRP we had leased to FTX that they use for various things on FTX… I’m hopeful that through the bankruptcy process, we get some or all of it back but uh it’s not too consequential to the business.”
Last November, FTX and over 130 companies filed for bankruptcy protection after a bank run exposed an estimated $8 billion hole in its balance sheet. In just 24 hours, the company’s value fell from nearly $32 billion to $1.
Ripple frequently gives short-term XRP leases to market makers and XRP participants for sales. These leases are typically returned to Ripple. Given Sam Bankman-alleged Fried’s fraud, the Ripple CEO stated that it is unclear what the company will receive from the lease. Only 1% of Ripple’s liquid assets were represented by the XRP lease.
The crypto community reacts
This statement that Ripple has had some contact with FTX has drawn attention from the community. While some of them point out lies and remind of earlier statements by Ripple where they have claimed that they have never had any exposure, others offer explanations by stating that they do to market makers to ensure orderly trade and liquidity.
Back in November 2022, it was reported that former FTX CEO Sam Bankman-Fried called him two days before the company filed for bankruptcy, the CEO of Ripple claimed that they discussed whether there were any FTX-owned companies that Ripple “would want to own” during the call.
All these interactions between the two companies have raised eyebrows, especially after Garlinghouse claimed that Ripple’s exposure to FTX has been limited.
The FTX Crisis: Bankman-Fried Under Fire For Fund Mismanagement
A report has surfaced that details communications between the United States and Bahamian officials regarding investigations into FTX. The report indicates that officials from the Bahamas Financial Services Board (SBF) were warned by several officials about the significant amount of bad loans accumulated by Alameda Research against FTX.
According to the report, one of the FTX executives, designated as CC-2, was reportedly alarmed upon learning from another executive (CC-1) that the hedge fund Alameda Research owed $13 billion to FTX.
However, the SBF disregarded these warnings and argued that the firm would raise more capital before crypto prices increased, thereby solving the problem.
Was SBF Exploiting Customer Funds?
The Bahamas Financial Services Board (SBF) has been accused of using stablecoin issuer Tether (USDT) to print money out of thin air. Tether, however, has denied these claims, despite losing its largest customer, FTX. At its peak, FTX had minted over $36 billion in USDT, which represented nearly half of Tether’s entire circulating supply.
According to court filings, some of the biggest investors in FTX include football star Tom Brady, New England Patriots owner Robert Kraft, and fashion model Gisele Bündchen. Additionally, well-known funds run by Tiger Global, Thoma Bravo, Sequoia Capital, SkyBridge, and Third Point, among others, were also investors in FTX.
Despite having high-profile investors, FTX was unable to recover due to the heavy losses incurred over the years from Alameda Research. Reports indicate that FTX customers’ funds were used for political donations, to sponsor Formula One races, and for hosting high-end parties around the world.
As a result, the $5 billion in assets recovered by the new FTX officials, including acting CEO John Ray III, cannot make up for the losses incurred by Alameda.
It remains to be seen whether FTX creditors will have the patience to wait until the end of the next crypto bull market, in order to recoup their investments. Notably, this is a significant uncertainty, especially considering that many of the tokens on FTX’s balance sheet are illiquid, including the FTT token.
Monex Group CEO Says They are Interested in FTX Japan
Oki Matsumoto, CEO of financial services company Monex Group, reportedly expressed interest in the Japanese division of troubled cryptocurrency exchange FTX according to a Bloomberg article. “Generally speaking, we naturally are interested,” said the CEO.
According to the report, FTX Japan is being put up for auction as part of the US bankruptcy proceedings. As per a court document, there are about 41 parties interested in the company, 25 of whom have signed nondisclosure agreements with the creditors.
Matsumoto sees potential in the Japanese crypto sector, predicting that the companies may begin investing in digital coins and using non-fungible tokens (NFTs) for advertising. When that time comes, he wants Monex to seize those chances and turn into one of the “few alternatives” for Japanese consumers. To entice more cryptocurrency firms, Japanese officials announced last year that they will relax the listing requirements for virtual coins.
FTX Japan is a Japanese cryptocurrency exchange that provides services for both spot and futures trading. As of Nov. 21, the division had approximately 17.8 billion yen ($139 million) in cash and deposits, and at the end of September, it had approximately 10 billion in net assets. Next month, the business is anticipated to enable consumer withdrawals.
On January 10, a lawsuit made public the 115 organizations that had previously indicated interest in buying the exchange’s assets And last, it’s still uncertain who will submit the highest bid for FTX Japan.
On December 15, 2022, attorneys for FTX started seeking approval to sell the four companies, citing worries about possible value erosion. The licenses of FTX Europe are currently revoked, and business revocation orders have also been issued for FTX Japan. According to FTX attorney Andy Dietderich, the company has reportedly recovered almost $5 billion in cash, digital currency, and liquid securities assets thus far.
Did Solana Use Meme Token BONK To Escape From FTX Debacle?
When allegations of possible fraud at Sam Bankman Fried’s FTX cryptocurrency exchange, which was the world’s second-largest at the time, first came to light, Solana’s popularity took a nosedive. However, Solana discovered a technique to swiftly change the ecosystem’s PR. And that technique is the infant meme token Bonk (BONK).
Immediately after FTX’s fall from grace, the Solana community created BONK to refocus the spotlight on their decentralized network.
The Launch of BONK
BONK is a meme token that runs on the Solana blockchain. It was released in December 2022 under the slogan “for the people and by the people,” and it was created by a community of users. Since its inception, the value of a single Bonk has increased by 3,200%, although at press time BONK has since decreased by quite a significant amount.
There are countless tweets from different projects and influencers advertising Bonk giveaways in exchange for retweets and likes. NFT projects are integrating Bonk into their systems.
It is possible that the Bonk airdrop, which consisted of fifty percent of the total supply of its tokens, prompted huge community interest and rapid buzz. Twenty percent of the overall airdrop supply is being distributed to Solana NFT collections, which amount to 297,000 unique NFTs; the remaining ten percent is being distributed to Solana-focused artists and collectors.
As for the developers of the token, nobody knows who they are as they’ve opted to remain anonymous. We do know that there are twenty-two people and they do not have a core team.
In addition, it is said that they have all been a part of the Solana ecosystem for a considerable amount of time and have developed relationships over the course of the past two years.
However, the developers of Bonk Inu have stated that they have no current intentions to build a dedicated blockchain network around Bonk. Their focus is entirely on boosting Solana’s transaction volume and demonstrating the value of the low-cost network.
The creators of Bonk have stated unequivocally that neither Solana Labs nor the Solana Foundation played any role in its development.
Is The Technique Working?
Clearly. According to research that was published on Jan. 11 by crypto in-depth research platform Delphi Digital, the number of total active wallets that are communicating with Solana-based exchanges has climbed by 83%, going from around 45,000 daily to over 83,000 daily.
Delphi analysts said in the report that the increase in activity occurred despite there being no structural shift or catalyst for the network. They noted the release of BONK in late December as the cause of the change.
At the time of this writing, the value of BONK has dropped by 12% over the previous twenty-four hours and by 67% over the previous week.
Crypto Industry Braces For Massive Selling As FTX To Dump $4.6 Bn Worth Of Altcoins
The crypto industry is bracing for increased selling pressure as FTX, a digital asset exchange, announced its plans to liquidate billions of dollars worth of assets to repay customers. During a House Committee hearing yesterday, FTX CEO John J. Ray III stated that his team had obtained wallet keys containing liquid digital assets.
However, it is estimated that over $8 billion worth of FTX customers’ assets are missing. This news comes as a surprise, as FTX was valued at over $32 billion just a year ago before filing for bankruptcy protection.
Additionally, the FTX crisis is reportedly becoming more complex as investigators are concerned about potential identity theft in order to obtain cash refunds.
“We have located over $5 billion in cash, liquid cryptocurrency, and liquid investment securities,” stated Andy Dietderich, an attorney for FTX, during a hearing in Delaware on Wednesday.
The hearing also revealed that FTX may be able to raise additional funds in the coming months to benefit customers, as the exchange has independent holdings in various countries that could be sold to recover customer funds.
Solana At Risk
According to FTX attorney Andy Dietderich, the exchange plans to liquidate non-strategic holdings with a book value of $4.6 billion. However, it should be noted that this amount does not include the assets that were seized by the Bahamas Securities and Exchange Commission (BSEC), which are estimated to be worth $170 million.
Dietderich stated that the decision to sell these assets is due to their high volatility, which could see the estimated value evaporate in a short period of time.
Among the assets seized by the BSEC are Solana, FTT, MAPS, OXY, WBTC, BONA, and several SPL tokens. Notably, Solana represents the largest portion of the seized assets, with a value of over $700 million, which is mostly locked.
The seized SPL tokens are estimated to be worth approximately $500 million, while the FTT and MAPS tokens are valued at around $575 million and $371 million, respectively. The OXY, WBTC, and BONA tokens are estimated to be worth $127 million, $90 million, and $82 million, respectively.
Coinbase Global director Conor warns that creditors should have low expectations for the $5 billion in recovered assets, as some of the assets are considered illiquid.
The recent revelations have had a minimal impact on the prices of the seized assets. Solana’s price, for example, has gained approximately 65% and 20% in the past 14 days and 7 days, respectively. Additionally, FTT is currently trading at around $1.39, up 16% on Thursday, while MAPS is trading at around $0.04860298, up 2.1% today. Oxygen (OXY) is trading at around $0.01318185, up 0.8% and WBTC is trading at around $18,174.57, up 4.4% today.
Crypto investors should be aware of the potential short-term volatility that may be caused by FTX’s selling pressure. Furthermore, large-scale dumping to the secondary market could cause fear in the bear-trapped market.
FTX Bankruptcy Filing Reveals SBF’s Connection With VC Firms
FTX exchange, a popular cryptocurrency exchange which was widely used by traders to buy and sell coins and tokens filed for bankruptcy on 11 November. Since then the investigation team has been on their toes to dig out all the confidential information related to FTX and its founder Sam Bankman-Fried. While the team is trying to know in depth information everyday there is new information that is popping out.
In the early hours today, the bankruptcy filing revealed the names of FTX shareholders including football star Tom Brandy and other well-known celebrities along with a few popular firms like Coinbase. Now the latest updates claim that FTX founder and former CEO, Sam Bankman-Fried had invested nearly 20 million USD in Paradigm, a venture capital firm. Furthermore, it’s also been reported that Paradigm later bought FTX shares.
It was in 2021 that SBF invested in a fund that was managed by Paradigm and later the same $2.5bn Paradigm One fund invested in FTX and FTX US exchanges. Earlier, Paradigm One was one of the largest crypto venture capital. Paradigm, which was created in 2018 by ex-Sequoia Capital partner Matt Huang and Coinbase co-founder Fred Ehrsam, claimed that SBF was given the same respect as others in its fund.
Paradigm Regrets Its FTX Investments
On the other hand, as per the reports, SBF had also invested $5mn in a fund that was introduced by UVM, a Singaporean bank and Signum Capital. These firms are the first of few investments that Sam Bankman-Fried had invested.
Paradigm was one of the main investors in FTX where the firm aided FTX’s internal venture team to run its Series B funding in July 2021. Huang had earlier claimed that SBF was among the special founders whose vision was ambitiously focused towards Crypto future.
However, after FTX filed for bankruptcy, Huang tweeted that he was deeply feeling regret for his investments in a company and a founder whose values were not in vision of crypto values.
Tom Brady, & Coinbase Among The Major FTX Shareholders
The FTX collapse in 2022 has brought down many companies and individuals who were in relation with the company. The firm filed for Chapter 11 bankruptcy in November 2022 after which its founder and CEO Sam Bankman-Fried stepped down from CEO position. Currently, John J. Ray III is positioned as CEO of FTX to assist the investigation.
The bankruptcy filing of FTX has revealed many information and individuals who were in connection with the firm. One such revelation is Football star Tom Brady and New England Patriots owner, Robert Kraft who happens to be FTX stock holder. The others include crypto firms Blackrock, Coinbase, Lightspeed Venture Partners, Pantera Ventures and Tezos Foundation.
The document claims that Tom Brady, who promoted FTX earlier, owns more than 1.1 million common shares of FTX. Along with Brady, his ex-wife and supermodel, Gisele Bundchen has more than 680,000 shares of FTX.
FTX Bankruptcy Filing Reveals List Of Shareholders
On the other hand, the filing also portrays that Kraft Group’s KPC Venture Capital LLC holds more than 110,000 Series B shares in FTX. It’s just not that, as per the reports, KPC Venture also has 479,000 Class A common shares and 43,545 Series A preferred shares in West Realm Shrines, the firm which owns FTX US. Tom Brady is one of the Wall Street and Silicon Valley groups who have faced trouble with their FTX shares.
However, the value of investments are difficult to know and also the estimate of dollar value of shares are not easy to understand as FTX collapsed before going public.
It’s been reported that FTX used its FTT token to purchase businesses which also includes the crypto portfolio company Blockfolio which the FTX purchased in 2020. In fact, the deal was 94% funded by FTT token.
During the same time this year, FTX had raised $400 million and valued the company at $32 billion which had quoted Sam Bankman-Fried as one of the world’s richest persons. Unfortunately, the fame couldn’t last long and FTX collapsed.
Voyager Labels FTX a Hypocrite for Opposing to Binance Acquisition Deal
BinanceUS was all prepared to acquire Voyager’s asset for $1 billion during one of the worst periods in the history of cryptocurrencies, which was the collapse of FTX. The resistance of the United States Securities and Exchange Commission (SEC), the Department of Justice (DoJ), and FTX’s Alameda Research made the deal much more challenging. Voyager is now making it clear in a public way that it found this criticism unappealing.
Voyager Calls FTX Hypocritic
The failed cryptocurrency lending company has justified its $1 billion proposal to sell assets to the cryptocurrency exchange Binance. Two court files that were released late on January 8 demonstrate that the United States has responded to criticism by labeling it “hypocrisy and chutzpah,” despite the criticism being based on unconfirmed supposition.
Voyager believes that raising objections to the Disclosure Statement based on spurious and unconfirmed media stories while disregarding the significant material that has already been made available to the objectors constitutes a transparent effort to undermine the BinanceUS transaction and damage BinanceUS.
An effort by Alameda to protest the arrangement on the grounds that it violates the hierarchy of creditors laid forth in United States bankruptcy law is met with a welcome that is even colder than before.
According to the submission made by Voyager, Alameda’s complaints are examples of hypocrisy and audacity at their best, and they are pointless. Prior to Voyager’s bankruptcy filing on November 11, FTX and Alameda made an effort to save the company by providing financial assistance.
The cryptocurrency lender went on to assert that Voyager had only agreed to the AlamedaFTX Loan Facility because of FTX’s fraudulent and deceptive promises and that FTX’s move to acquire Voyager was a desperate attempt to cover up the gaps in its own balance sheet caused by the alleged fraud.
“The fallout caused by FTX US’s egregious conduct before and during these chapter 11 cases and FTX US’s subsequent collapse has left Voyager with tight liquidity and mounting administrative costs,” the filing says.
Voyager said the Binance transaction is the greatest choice for people owed money in such a turbulent crypto market, but there are escape methods if a better alternative is found later. In any case, a hearing is scheduled for tomorrow, January 10, in the New York bankruptcy court, so we’ll have to wait and see what happens then.
FTX Fraud Victims to Get a Website for Court Proceeding Communication & Federal Rights
US Government is planning to launch a website for FTX U.S victims to notify them regarding their court proceedings and federal rights. Lewis A Kaplan has been appointed as the District Judge for this case. Even though the judge did not make a direct comment on the launch of the website, it is still under consideration by the Federal Court.
Federal prosecutors have 7 charges against Sam Bankman-Fried (SBF). It includes wire fraud, conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the United States and violate campaign finance laws. SBF has pleaded not guilty to these charges even though he admitted to mismanagement of the funds of his company.
Ever since FTX collapse, more than one million FTX users have been affected. There are mainly 3 categories of victims – customers of FTX.com, investors of FTX.com, and lenders of Alameda Research. The U.S. prosecutors notified the District Judge that it is impractical to contact one million users by email or phone. Hence, they have requested the Judge to launch a website for court proceeding notifications and further announcements related to the case.
Meanwhile, the victims can send emails to Victim/ Witness Coordinator – Wendy Olsen Clancy on the email [email protected] regarding the loses and claims for justice. These emails will be monitored individually and replied to if the coordinator finds that he/ she is a genuine victim. The verification of 1 million victims is going to be a time-consuming task but the necessary measures have been taken to make the process smooth.
Federal crime victims have the following rights :
- The right to be reasonably protected from the accused.
- The right to reasonable, accurate, and timely notice of any public court proceeding, or any parole proceeding, involving the crime or of any release or escape of the accused.
- The right not to be excluded from any such public court proceeding, unless the court, after receiving clear and convincing evidence, determines that testimony by the victim would be materially altered if the victim heard other testimony at that proceeding.
- The right to be reasonably heard at any public proceeding in the district court involving release, plea, sentencing, or any parole proceeding.
- The reasonable right to confer with the attorney for the Government in the case.
- The right to full and timely restitution as provided in law.
- The right to proceedings free from unreasonable delay.
- The right to be treated with fairness and with respect for the victim’s dignity and privacy.
- The right to be informed in a timely manner of any plea bargain or deferred prosecution agreement.
- The right to be informed of the rights under this section and the services and provided contact information for the Office of the Victims’ Rights Ombudsman of the Department of Justice.
Top Layer-1 Protocol’s Avalanche And Polygon Survive FTX Tidal Wave, Orbeon Protocol See Price Surge 805%
The downfall of FTX, one of the leading cryptocurrency exchanges in the world, created a domino effect that left almost every cryptocurrency in the red zone.
The FTX tidal wave also came at a time when the entire market was struggling against a year-long bearish trend.
While the effects of the FTX downfall were more severe for most coins, a few tokens like Avalanche (AVAX), Polygon (MATIC), and Orbeon Protocol (ORBN) weathered the storm better than most.
Orbeon Protocol, for example, continues to attract great attention in the ongoing phase 3 of its presale which has seen massive price hikes of 805% so far. Experts predict a 6000% gain by the time the Orbeon Protocol (ORBN) presale concludes.
Avalanche (AVAX)
It is fair to say that Top Layer-1 Protocol Avalanche (AVAX) was also not spared the FTX effects that decimated the prices of major coins like Bitcoin.
Fortunately, Avalanche (AVAX) fared better than most tokens thanks to its development team that recently assured investors of further efforts to improve the project.
Avalanche’s (AVAX) community is also optimistic that the new developments will likely create a price rally in 2023.
Avalanche (AVAX) is a major competitor of Ethereum. Avalanche (AVAX) is an open-source decentralized proof-of-stake blockchain platform with a smart contract that is unique from other blockchains. Avalanche’s (AVAX) native token is AVAX. The Avalanche coin is still way below its all-time-highest but is expected to rally in 2023.
Polygon (MATIC)
Popularly known as the “Ethereum Killer” in crypto circles, Polygon (MATIC) is a fast-growing project that recently reported a milestone of reaching 200 million unique addresses. It is probably due to Polygon’s (MATIC) loyal community that it survived the FTX tidal wave fairly better than most.
Polygon (MATIC) has continued to grow thanks to the many dApps and NFTs built on the chain. Polygon’s (MATIC) native token, MATIC, may be trading in the $0.77 range but analysts are confident that the price will rise to as high as $2.92 in 2023.
The expected price surge is because Polygon (MATIC) has lately been partnering with companies and major brands looking for reliable inter-chain operability such as the one Polygon (MATIC) provides.
Polygon (MATIC) also offers some of the best Level 2 scaling solutions on the blockchain today. It is a promising project bound to grow in 2023 despite the effects of FTX collapse.
Orbeon Protocol (ORBN)
Orbeon Protocol (ORBN) was developed to address challenges often faced in the venture capital and fundraising sectors. It does this using fractionalized NFTs.
Orbeon Protocol (ORBN) mints the fractionalized equity-based NFTs representing the worth of a company and then makes them accessible to investors for a low price. This means that all users of the Orbeon Protocol (ORBN) have equal opportunity to invest in early-stage ventures.
Orbeon Protocol’s NFTs-as-a-service also helps new businesses to raise capital from a wider pool of retail investors. Holders of ORBN tokens enjoy lower transaction fees, voting rights, staking rewards, and early access to investment opportunities among other benefits.
The crypto market has not been quite favourable, especially after the FTX saga but Orbeon Protocol’s presale does not show signs of slowing down any time soon. Industry experts forecast a price increase of 6000% by the beginning of 2023.
Find Out More About the Orbeon Protocol Presale:
Website: https://orbeonprotocol.com/
Presale: https://presale.orbeonprotocol.com/register
Telegram: https://t.me/OrbeonProtocol
Disclaimer: This is a press release post. Coinpedia does not endorse or is responsible for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to the company.
U.S Prosecutors Probe Former FTX Engineer Nishad Singh; a Huge Blow To SBF?
United States federal prosecutors in Manhattan are closing in on SBF’s inner circle with the latest being Nishad Singh, a high-profile FTX director of engineering. If found guilty, Singh could be charged as soon as February, according to media outlet Bloomberg. While Singh has not appeared in any court proceedings, bankruptcy court documents reveal that he borrowed $543 million from Alameda.
The white-collar crime court in New York will have a hectic time deconstructing the FTX and Alameda scandal, which involves complex multi-chain transactions in a period of several years. Moreover, U.S authorities claim the FTX crisis began more than twelve months ago and the company was silently struggling.
Damian Williams, the US Attorney for the Southern District of New York, signaled last month that authorities planned to probe further into SBF’s inner circle as part of their investigation.
“If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it. We are moving quickly and our patience is not eternal,” he said
Reportedly, Singh was involved in the 2022 United States midterm elections as a prolific donor. According to Federal Election Commission records, Singh donated more than $9.3 million since 2020 to Democratic aspirants.
His donations are, however, a drop in the ocean compared to SBF’s $1 billion in loan from Alameda, which authorities believe he laundered through political donations, charitable giving and other investments.
Notably, the Department of Justice recently announced plans to seize SBF’s half a-billion assets in Robinhood shares. Reportedly, the DoJ anticipates distributing the cash to creditors like BlockFi, which is currently under bankruptcy protection.
What Next for FTX Investors and Customers
Two months after FTX and Alameda filed for bankruptcy protection, stakeholders have been left in the dark about possible refunds. Commotions have erupted in lending companies, including DCG-backed Genesis Trading and Gemini’s Earn customers, following huge exposure on FTX.
Evidently, regulators and authorities will have challenging time-solving problems that are emanating from FTX and Alameda’s implosion. As such, FTT and FTX investors are likely to go unrefined for the next few years. Moreover, the next SBF hearing is slated for October, while he remains under his parent’s custody in California.
While FTX customers from the United States may get back their money soon, it is much more complicated for international investors who may never be refunded. As such, the cryptocurrency market is at the stake of further collapse as investors fear exchanges’ rug pulls.
Former FTX Lawyer To Assist In Investigations, Shall Divulge Firm’s Confidential Information
The former lawyer of bankrupt FTX, Daniel Friedberg, has agreed to disclose details of the company to US prosecutors as they investigate the collapse of FTX. This comes after the Manhattan US Attorney’s Office announced plans to form the FTX Task Force on January 3. This task force will focus on investigating and seeking recovery of assets for victims in the FTX case.
Sam Bankman-Fried Under Pressure
Attorney Daniel Friedberg’s cooperation with the US attorney has increased pressure on FTX founder Sam Bankman-Fried, who is currently under house arrest at his parents’ home.
According to Reuters, Daniel provided details of FTX during a meeting on November 22 with the US Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), and the Securities and Exchange Commission (SEC).
At the meeting, Daniel Friedberg gave all the details he knew about FTX and Bankman-Fried’s use of customer funds, including confirmation that Bankman-Fried used the funds to finance his businesses.
Furthermore, Daniel also provided a detailed account of conversations between him and other top executives of the company, and also disclosed Bankman-Fried’s Alameda Research operations. According to sources, Daniel Friedberg has not been charged with any crimes as he has agreed to be a government witness for Bankman-Fried’s October trial. However, Friedberg’s lawyer, the FBI, FTX, SEC, and a spokesperson for Bankman-Fried all declined to comment or provide any details on the matter.
Sam Bankman-Fried has been accused of transferring billions of dollars of FTX customer funds to Alameda Research for venture investments, luxury real estate purchases, and political donations. On January 3, Bankman-Fried pleaded not guilty to charges of deceiving investors in a statement given before a Manhattan federal court. He has denied all charges, which accuse him of defrauding FTX customers and using the funds for personal use. The next tentative trial date has been scheduled for October 2, 2023.
FTX Task Force Launched, Will FTX Customers Get Their Lost Funds?
While the entire crypto space is awaiting justice in the FTX case, the company’s founder and former CEO Sam Bankman-Fried have pleaded not guilty to the charges of deceiving his investors. This statement was given before Manhattan federal court on January 3, 2023.
Banman-Fried has denied all the charges which accuse him of defrauding his FTX customers and using it for his real estate purchases, political donation, and much more. Following this, Judge Lewis A. Kaplan has now set a tentative trial date of October 2 which might be preponed or postponed a day or two. It’s also reported that due to the accusation of fraud and multiple financial offenses, SBF might face 115 yrs of imprisonment.
FTX Task Force To Recover FTX Customer Funds
Meanwhile, on the same day, January 3 the Manhattan US Attorney’s Office revealed a plan to form FTX Task Force. This Task Force will mainly focus on investigations and the charges that are currently faced by FTX. Here the Task Force will try to recover the victim’s assets from FTX.
At present, Sam Bankman-Fried is out on $250 million bail, but he is currently under house arrest at his parent’s place. It’s just not SBF, even FTX co-founder Gary Wang and Alameda Research’s former CEO Caroline Ellison is also facing charges.
On the other hand, as per the sources, the FTX Task Force will have lawyers from Money Laundering, Securities and Commodities Fraud, Public Corruption, and Transnational Criminal Enterprises departments. The Securities and Exchange Commission has reported that the customers have stated a loss of $8 billion after FTX and Alameda Research collapsed.
As mentioned earlier, Alameda Research which is SBF’s hedge fund had huge stakes in FTT tokens which is a native token of FTX. These staked FTT tokens were used to lend billions of loans.
Were SBF and FTX Involved In The Collapse Of The Terra Ecosystem? Discover The Truth Here.
Ever since the Terra ecosystem collapsed, the entire crypto space fell into a bear market, resulting in numerous fallouts and bankruptcies. Initially, it was believed that the selling pressure was orchestrated by a group of traders who had doubts about the stability of algorithmic stablecoin. Su Zhu, the CEO of 3 Arrow Capital, claims Sam Bankman-Fried and FTX conspired in the attack on LUNA and stETH.
Lookonchain, a popular on-chain analytical platform, has attempted to connect the dots with on-chain evidence, including the de-pegging of stETH in June.
Starting from the beginning, the platform recorded the addresses which withdrew 110,286 stETH from Anchor Protocol. Address ‘0xd5c6a038950b977969e66f4823fd813c67048ba0’ withdrew $216 million worth stETH which crashed the UST & LUNA prices. Interestingly, these tokens were transferred to FTX exchange on June 08, 2022 post to which stETH began to de-peg. However, it cannot be firmly stated that the address belonged to SBF but cannot be ruled out either
Moving ahead, Celsius Network withdrew 224,949 stETH from Anchor Protocol on May 11, 2022, and transferred 50,000 stETH worth $73.8 million to FTX on June 09, 2022. Amber Group withdrew 83,380 stETH from Curve and transferred 74,941 stETH worth $110M to FTX on June 10 & 11, 2022.
https://twitter.com/lookonchain/status/1610178091913195520
During the time of the Terra collapse, FTX’s liquidity was not the highest, but it is still suspicious as to why these addresses transferred stETH to FTX at the same time. With these three addresses, FTX had nearly 235,227 stETH worth more than $347 million at that time.
It is worth noting that these events occurred at identical times, suggesting the involvement of FTX or SBF in the collapse of the Terra ecosystem. While hard evidence is scarce, the possibility remains.
Court Document Reveals New Startling Details About Alameda and FTX
Recent revelations have shed light on how the problems that Sam Bankman-Fried “SBF”’s crypto trading firm Alameda has been having began a long time before the difficult year that we all experienced in 2021; in part due to its sister company FTX’s meltdown.
Looking more closely, we see that Alameda was never great at investing and that SBF’s involvement in the company remained substantial even after his departure as CEO in October 2021.
The trading company risked a lot of money and won part of it back, but it also lost a lot. And SBF sought over and over to borrow money and cryptocurrency to fuel those wagers, even offering double-digit interest rates to its lenders.
Uncovering It All
Alameda, as it expanded, invested billions of dollars into bets on the future success of the cryptocurrency industry, billions that federal prosecutors have just said were stolen from FTX clients. It placed wagers on obscure cryptocurrency exchanges and a slew of blockchain technology companies, and it also made political contributions and real estate purchases.
When it finally collapsed in 2022, it was a massive event. Both firms filed for bankruptcy protection in November, leaving their consumers owed billions of dollars and weakening trust in the cryptocurrency sector as a whole.
SBF claims that poor record keeping and a banking problem led to the theft of client monies and enabled Alameda to cover huge losses with funds intended for FTX. It was reported last week by The Wall Street Journal that during a hearing on January 3 he would most likely enter a not guilty plea to fraud charges.
The disgraced crypto figure seems to have established Alameda with the intention of donating a portion of its income to effective altruism, a movement whose stated goal is to channel charitable contributions to causes that will have the greatest impact.
He borrowed money from affluent people who were already involved in the trade sector in order to expand his business. The co-founder of Skype, Jaan Tallinn, lent him a substantial amount of Ethereum, over $100 million, and he returned with a stash of cryptocurrency.
Binance Blockchain Week kicked up in January 2019 with around 1,500 attendees in Singapore. The symposium, which Alameda sponsored for $150,000, was meant to be a forum for planning the development of the emerging crypto sector. Attendees stated SBF’s goal during the meeting was to network with potential new lenders for Alameda.
The firm handed out pamphlets to potential lenders claiming it had $55 million in assets under management; nevertheless, the vast majority of those funds were borrowed in order to finance the company’s operations.
For SBF, Alameda was a means to expand FTX. The company was the principal market maker at the exchange, meaning it was always willing to buy and sell at any time. People familiar with the hedge fund’s tactics say it sometimes took the losing side of a transaction in order to draw clients to the exchange.
Recent complaints filed by the Securities and Exchange Commission and the Commodity Futures Trading Commission, the nation’s leading market regulators, allege that SBF hatched a scheme for Alameda to borrow cash from the exchange.
He instructed his co-CEO, Gary Wang, to create programming that would enable the firm to maintain a negative balance on FTX regardless of the amount of collateral it posted with the exchange.
In addition, SBF prevented the sale of Alameda’s FTX collateral in the event that its value dropped below a certain threshold. That amounted to a line of credit extended by FTX to the hedge fund.
The criminal also directed his former flame Caroline Ellison to inflate the value of a cryptocurrency used by Alameda as collateral by increasing its purchases of that asset.
Note that SBF has said in an interview that,
“FTX was a full-time job. I didn’t have enough brain cycles left to understand everything going on at Alameda if I wanted to.”
Judge Withdraws From FTX Case; Solana Drops, And Snowfall Protocol Rises Sharply!
2022 has not been kind to the crypto market. Among the biggest blows of the year was the collapse of the FTX exchange. When FTX declared bankruptcy, it sparked a chain of events that pulled the entire crypto market down with it. Even now, the ripples of the FTX collapse continue to haunt the crypto-verse. News of the judge withdrawing from the FTX case, the drop in the price of Solana (SOL), and the sharp rise in the value of Snowfall Protocol (SNW) – they all seem to be closely related.
Judge Withdraws from the FTX Case
The FTX bankruptcy case has been anything but dull. The legal proceedings took yet another exciting turn when the District Judge, Ronnie Abrams, recused herself from participating in the case. She brought to the court’s notice a possible conflict of interest.
Greg Andres, husband of the judge, Ronnie Abrams, works as a partner at a law firm that advised FTX in 2021. She clarified, “My husband has had no involvement in any of these representations…Nonetheless, to avoid any possible conflict, or the appearance of one, the court hereby recuses itself from this action.”
It is worth noting that Greg Andres had previously been working for the Eastern District of New York in the capacity of Assistant United States Attorney. Andres was responsible for prosecuting criminal fraud and investigations involving foreign bribery.
Solana On a Downtrend
Solana (SOL) has been one of the fastest-growing cryptocurrencies before the collapse of FTX. In fact, FTX was among the biggest supporters of Solana (SOL). On examining the balance sheet of FTX, it was found that FTX held around $100 million in Solana tokens. When FTX went down, naturally, the value of Solana (SOL) also fell dramatically.
The fall of FTX only exacerbated the existing problems with the Solana (SOL) blockchain. Solana (SOL) pegged itself as a reliable and efficient network for crypto transactions. However, Solana has suffered through multiple outages lasting multiple hours many times. So, Solana (SOL) is not able to deliver on its primary use case, a crisis that has only exacerbated in the aftermath of the FTX collapse.
The Rise of Snowfall Protocol (SNW)
Snowfall Protocol (SNW) was launched in a year when every cryptocurrency was facing selling pressures. However, this did not affect the presale of the Snowfall Protocol (SNW). The main reasons for the success of Snowfall Protocol (SNW) have been its primary use case of interoperability and the developers’ vision.
When the stage 3 sale started, Snowfall Protocol (SNW) had already appreciated 250% in value compared to its price in the stage 2 sale. Snowfall Protocol (SNW) is already helping its users to earn passive income with its rapidly multiplying price.
In addition, Snowfall Protocol (SNW) has also successfully presented its first dApp prototype. All these developments have taken place before the launch of the crypto, which is scheduled for January 3, 2023. Experts are predicting the price of Snowfall Protocol (SNW) to increase by 1,000% after its launch.
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Bahamas Securities Commission Holding FTX deposits Worth Over $3.5 billion.
In the protracted and gloomy drama involving FTX and SBF, it would seem that we have finally heard some positive news about the assets of users that the criminal mastermind was spending frivolously.
The Financial and Regulatory Authority of the Bahamas (Securities Commission of the Bahamas) announced on December 29 that it is temporarily holding FTX assets with a value of $3.5 billion based on market pricing at the time of transfer in order to deliver them to customers and creditors who own them.
According to the statement released by the regulator, this was done out of concern that there was a danger of immediate dissipation of the assets owing to concerns raised by Bankman-Fried, which included cyberattacks on the exchange.
According to an affidavit submitted to the Supreme Court of the Bahamas by the commission’s executive director, Christina Rolle, Sam Bankman-Fried and Gary Wang no longer had access to the tokens that had been transferred or frozen once the transfer was completed.
The web of links between the now-defunct FTX.com, which is registered locally as FTX Digital Markets Ltd., and its trading subsidiary, Alameda Research, is presently being investigated by the authorities in the Bahamas.
Soon after the firm announced that it would be filing for bankruptcy, the authorities in the Bahamas, where the company’s headquarters were located, appointed liquidators to wind down FTX’s worldwide trading activity.
At the beginning of this month, attorneys for the cryptocurrency exchange FTX fought against a demand for internal papers from its Bahamian firm. Their argument was that they did not trust the Bahamian authorities with information that could be used to steal assets from the insolvent company.
CFTC’s Latest Findings on FTX-Alameda
In a complaint filed on December 13 by the Commodity Futures Trading Commission, it is alleged that Bankman-Fried instructed FTX officials to transfer about $8 billion in liabilities from Alameda to an unidentified client account on FTX’s computers.
According to the complaint, this enabled Alameda to conceal its FTX deficit. But the account was excluded from liquidation features and enjoyed the same other benefits as Alameda accounts.
Caroline Ellison pled guilty to seven counts of federal fraud on December 18. The allegations against her included conspiracy to conduct wire fraud on FTX clients and money laundering.
Additionally, Gary Wang pled guilty to four counts of the same offenses. Each of them faces decades behind bars, and their arrest and incarceration will hopefully lead to SBF’s own detention and eventual incarceration as well.