CFTC shift attention to Binance with lawsuit

Josh Barter on November 27, 2023

CFTC — The cryptocurrency sector in the United States is in disarray, with entrepreneurs clashing with regulators.

Crypto enthusiasts in the United States, for example, are not allowed to trade cryptocurrency derivatives.

To further aggravate the situation, major overseas trading platforms for crypto futures do not allow Americans to trade the products.

Only if they are registered with the Commodities Futures Trading Commission (CFTC), a formidable federal regulator, may they do so.

The CFTC has filed a lawsuit against Binance, the world’s most well-known cryptocurrency exchange, for trading without first registering with the agency.

Binance apparently contemplated bailing out rival exchange FTX in November 2022.

Yet, Binance withdrew after closely monitoring the exchange platform, preventing a big federal fraud investigation on FTX.

What happened?

Binance and its CEO, Changpeng Zhao, were accused by the CFTC with breaking US laws.

Among the alleged violations is privately advising “VIP” clients in the United States on how to dodge compliance rules.

In addition, the commission regulates derivatives trading in the United States.

According to the CFTC, Binance and Zhao urged employees and customers to avoid compliance protections in order to increase corporate profits.

The CFTC does not have the ability to pursue criminal charges.

But, the regulator has the authority to levy substantial fines, which might preclude Binance from registering in the US in the future.

The potential ban might be disastrous for the company, given the United States is home to hundreds, if not millions, of cryptocurrency enthusiasts.

The response

As the news of the lawsuit came, Binance noted that it was unexpected and disappointing.

The company stressed that it has spent a significant amount of money in the previous two years to ensure that US-based investors are not active on the platform.

Zhao tweeted the number 4 after the lawsuit was announced on Monday, referring to a previous statement he made:

“Ignore FUD, fake news, attacks, etc.”

FUD is an acronym that stands for “fear, uncertainty, and doubt” in the crypto world.

Binance has long claimed that it is not subject to American legislation since it does not have a physical presence in the country.

Despite its location in China, the crypto trading platform lacks a physical headquarters.

Changpeng Zhao believes that the headquarters of the corporation are wherever he is.

Binance’s technique, according to the CFTC’s complaint, was a willful attempt to avoid regulation.

The bigger picture

The CFTC action is a setback for Binance, but it has far-reaching repercussions for the cryptocurrency sector.

But, the case is not as important as everything else that happened in 2022.

For example, the FTX bankruptcy triggered a chain reaction throughout the crypto sector, causing firms and projects exposed to the corporation to either freeze or shut down.

Terra/Luna also had a collapse, resulting in a drop in the value of crypto assets and NFTs.

Yet, significant progress has been made on the Terra/Luna issue in 2023.

Prices for the two major cryptocurrencies, Bitcoin and Ethereum, fell by more than 3% on Monday, a regular day for cryptocurrency trading.

Worst-kept secret

The CFTC’s lawsuit is remarkable for naming one of its worst-kept Bitcoin secrets.

Consumers in the United States have incredibly simple access to potentially dangerous offshore crypto derivatives, which should be prohibited.

Because crypto derivatives are leveraged bets on very volatile assets, they are accessible to anybody with a VPN.

While this method is straightforward, it is strongly discouraged.

The endgame

The most likely outcome, according to Blockchain Intelligence Group crypto compliance and regulation specialist Timothy Cradle, is that Binance will pay hundreds of millions of dollars in fines to the CFTC.

Furthermore, the company would be prevented from registering derivatives exchanges.

The move would not only be disastrous for American customers, but it would also have a significant impact on Binance’s revenues.

According to the lawsuit, US consumers account for 16% of the revenue generated by Binance’s derivatives products.

Other regulators

The revelation on Monday only adds to the regulatory pressure on one of cryptocurrency’s most well-known characters.

According to Bloomberg, the US Tax Administration and the Securities and Exchange Commission are also investigating Binance.

This week, the SEC issued a Wells Notice to Coinbase, one of the top US-listed crypto exchanges, for possible securities law violations.

Silvergate and Signature Bank, two major connections to the traditional banking sector, were lost to the crypto industry in early March.

John Ray III slams FTX for trusting private keys with AWS

Hector Andrews on November 27, 2023

John Ray III — This week, FTX CEO John Ray III delivered an interim report on the company’s activities.

Ray stated that practically every bitcoin asset was kept in hot wallets by the firm.

Report and service

John Ray III oversaw FTX’s Chapter 11 bankruptcy restructuring.

Ray indicated that, while Amazon Web Services is a great tool, it is not fit for a multibillion-dollar corporation’s private keys. This was not mentioned in the interim report.

The FTX CEO scolded the company’s use of Amazon Web Services in the same way he chastised QuickBooks, the company’s accounting software.

“Nothing against Quickbooks. Very nice tool,” said Ray as he testified before the House Financial Services Committee in December.

“It’s not for a multibillion dollar company.”

Instead, the FTX CEO indicated in a court filing on Sunday that the company stored nearly every cryptocurrency asset in hot wallets.

John Ray III emphasized his point by citing the $432 million in illegal transactions that depleted FTX wallets on November 11, the day after the firm filed bankruptcy.

Interim report

John Ray III submitted an interim report with the Delaware bankruptcy court, keeping them up to date on the company’s efforts to recover funds and the challenges they encountered.

Ray claimed that the FTX Group’s lack of reliable record keeping complicated the endeavor.

Furthermore, the investigation included an in-depth examination of how the organization was run and its failure to maintain security.

“In this regard, while the FTX Group’s failure is novel in the unprecedented scale of harm it caused in a nascent industry, many of its roots are familiar, hubris, incompetence, and greed,” it wrote.

The company’s collapse

The disgraced creator of FTX, Sam Bankman-Fried, constructed a crypto empire.

The empire, however, crumbled in November 2022.

SBF’s trading desk, Alameda Research, was discovered to hold billions of FTX Token or FTT on its balance sheet.

Additionally, accusations have appeared accusing the firms of mixing user funds with their own.

Sam Bankman-Fried is now charged with thirteen felonies.

Meanwhile, the FTX Group has been attempting to collect customer funds for the past five months.

SBF charges

Sam Bankman-Fried is accused of a number of charges, including:

Wire fraud
Securities fraud
Conspiracy to commit bank fraud
Defrauding the Federal Election Commission

Prosecutors said that SBF and his colleagues lied to the US in their FEC-related claims.

He was also accused of hindering the Federal Election Commission’s ability to enforce federal law.

As a result, Sam Bankman-Fried was charged with further charges, including:

Conspiracy to operate an unlicensed money transmitting business
Conspiracy to commit wire fraud on lenders to Alameda Research
Conspiracy to make unlawful political contributions and defraud the FEC

AWS

Keeping the majority of the funds in hot wallets and the private keys on Amazon Web Services, according to John Ray III, was a poor risk management strategy.

Amazon Web Services and its cloud computing competitors are not impregnable.

According to data breach tracker Firewall Times, the service has seen many large-scale breaches since 2017, exposing the personal information of hundreds of millions of voters, Instagram users, bank clients, consumers, and COVID-19 testing site visitors.

“The FTX group undoubtedly recognized how a prudent crypto exchange should operate, because when asked by third parties to describe the extent to which it used cold storage, it lied,” said Ray in the report.

He also cited the company’s reaction to advisers and counterparties in 2022, as well as a tweet from Sam Bankman-Fried in 2019.

According to the two emails, FTX used both hot and cold wallets.

According to John Ray III, the firm did not protect the crypto assets with offline, air-gapped encrypted, and geographically distributed computers.

Ray also referenced correspondence from a person associated with LedgerX, an FTX Group-owned derivatives exchange.

However, it was not included in the bankruptcy procedures, forcing FTX.US to rely more on cold wallet storage.

Nonetheless, no mechanism was in place prior to the bankruptcy, according to John Ray III.

FTX struck with major debt to 50 creditors

Clara Emily on November 27, 2023

FTX, the well-known cryptocurrency, has been in trouble for the past few weeks.

FTX owes $3.1 billion to its top 50 creditors, according to documents filed Saturday in Delaware bankruptcy court.

The document clarifies the extent of potential losses suffered by clients.

The filing

According to Saturday’s filing, the crypto exchange’s top 10 creditors each have more than $100 million in unsecured claims.

The claims total more than $1.45 billion.

The filing explained that the debt does not include anything owed to company insiders.

However, this may change with additional information.

FTX owes its largest creditor more than $276 million.

The company now owes around $21 million to its 50th largest creditor.

Despite the enormous debt, the filing can only scratch the surface of what the company owes.

Last week, FTX said it could have over a million creditors.

The company owes its third-largest creditor $174 million.

Although unconfirmed, the figure matches what Genisis, a cryptocurrency lender, announced ten days ago: $175 million in funds locked in its FTX trading account.

Filing notice

A notice accompanying the filing explains that FTX based the totals on information that can be seen but was not accessible.

The notice says the company was unable to access customer data fully.

FTX, led by new chief executive John J. Ray III, said in the filing that its debt numbers might be inaccurate.

There may be payments to creditors that need to be reflected in the books or records of the company.

Creditors

A request was filed to withhold information about FTX’s creditors and their personal information.

In addition, the motion says disclosing creditors’ names could give predatory companies a lead.

It reads:

“Public dissemination of the Debtors’ customer list could give the competitors an unfair advantage to contact and poach those customers, and would interfere with the Debtors’ ability to sell their assets and maximize value for their estates at the appropriate time.”

“The Debtors historically did not keep appropriate books and records,” it continued.

“[And] the Debtors are currently working to access certain sources of data and records that are currently unavailable.”

Chapter 11 cases

The decision to create a list of FTX creditors came from overlapping creditors in its Chapter 11 cases, unorganized filing, and limited time and resources.

“Creditor information, and in particular customer information, is not clearly labeled or identifiable by [FTX],” the motion reads.

“As a result, presenting the information on a consolidated basis will ensure the most relevant and known information can be promptly disclosed.”

A date is ready for the “first day of hearing” in FTX’s bankruptcy proceedings.

As a result, it will take place in Wilmington, Delaware, on Tuesday.

Reference:

FTX says it owes over $3 billion to its 50 largest creditors

Elon Musk calls out report on SBF investment as ‘false’

Vina Grady on November 27, 2023

Elon Musk recently dismissed reports that FTX founder Sam Bankman-Fried contributed around $100 million to his acquisition of Twitter.

The revelation from Twitter’s new owner came amid a Business Insider headline that claimed SBF had a $100 million stake in the popular social media platform.

Musk dismissed the claims, tweeting, “False.”

The story

The Business Insider story was an article write-up by Semafor, a recently launched news site.

It has been alleged that Elon Musk invited SBF to “roll” his Twitter shares into the company, which would become private under Musk’s ownership.

SBF previously reportedly purchased Twitter shares in anticipation of its acquisition.

Additionally, $43 million worth of Twitter stock was listed as one of FTX’s illiquid assets in a leaked sheet earlier this month.

SBF initially expressed a willingness to contribute more than $10 billion but did not invest any new money in the deal.

Instead, his pre-existing Twitter shares were initially injected into the company under Musk, according to unpublished text messages cited by Semafor.

Following Musk’s denials, Semafor updated the report to clarify that Sam Bankman-Fried did not invest in Twitter.

Twitter’s new owner also slammed the outlet, noting that SBF is a partisan – a fact the publication reveals in its coverage of the FTX crisis.

Musk and SBF

Twitter’s lawsuit against Elon Musk revealed private text messages, prompting him to complete his takeover bid.

According to reports, SBF and Musk were introduced in March by Oxford philosophy professor Will MacAskill.

MacAskill reportedly advised the creator of FTX on his principles of “effective altruism.”

At the time, SBF said he was happy to talk to Musk about Twitter or anything else.

He reiterated his offer in April when Musk announced his outright offer to buy Twitter.

SBF then sent Tesla’s CEO a Twitter thread outlining their vision for a decentralized Twitter.

SpaceX and Boring Company backer Michael Kives sent the same thread to Musk, saying it would be “cool to do this with Sam Bankman-Fried.”

Musk tells all

Elon Musk recently revealed early interactions with the FTX founder set off alarm bells.

According to the owner of Twitter, SBF has triggered its “bs detector.”

Musk explained in a Twitter space, saying:

“I talked to him for about half an hour, and my b******* meter was red-lining. This dude is full of ****, that was my impression.”

Musk hinted at the time that he was looking for investors to contribute to the deal on Twitter.

“He does not have capital,” he added. “He will not come through, that was my prediction.”

Instead, FTX’s rival and eventual rescuer, Binance, invested $500 million in the acquisition of Musk.

Reference:

Elon Musk calls report that SBF invested $100M in Twitter ‘false’

FTX estate release interim report, provides updates

Clara Emily on April 10, 2023

FTX — Months have passed since the demise of the once-respected crypto exchange site FTX, and investigations have continuously updated the company’s situation.

After founder Sam Bankman-Fried stepped down late last year, CEO John J. Ray III has been handling the company’s bankruptcy procedures.

On April 9, 2023, he presented an interim report on the company’s activities.

The report

The report was submitted with the Delaware US bankruptcy court, offering an update on the FTX debtor’s recovery efforts and problems.

Ray stated that the debtors had to face unanticipated challenges as a result of the FTX Group’s lack of appropriate record keeping and controls in critical areas.

The most recent report also went into depth about how the firm was run, its lack of proper record-keeping, and its inability to maintain the organization’s security.

The problems, together with other control flaws, made it impossible for the debtors to collect funds required to repay their large list of creditors.

The report also reads:

“In this regard, while the FTX Group’s failure is novel in the unprecedented scale of harm it caused in a nascent industry, many of its roots are familiar, hubris, incompetence, and greed.”

Financial mirrors

The 45-page report by John J. Ray III detailed the company’s everyday operations.

According to the study, FTX is “a web of parallel corporate chains with various owners and interests, all under [Sam] Bankman-Fried’s ultimate control.”

It was also found that FTX CTO Gary Wang and engineering director Nishad Singh had significant influence on the company’s operations.

Both former executives plead guilty.

They are actively working with authorities to assist with the legal processes.

Ray also referenced examples of employees facing unjustified consequences following arguments.

Employees were reportedly subjected to lower incentives or abrupt terminations as part of the company’s efforts to suppress resistance.

According to one report, FTX.US President Brett Harrison was instructed by the company’s legal counsel to apologize to Sam Bankman-Fried and Nishad Singh.

He declined after raising concerns within the company, and he resigned shortly thereafter.

Harrison’s resignation

Brett Harrison resigned as president of the FTX United States branch in September.

He joined the firm from Citadel Securities in 2021, initially assisting the company in expanding its US footprint before establishing the US division headquarters in Chicago.

Despite leaving the firm, Harrison stated that he will remain active in the crypto sector.

“I’m remaining in the industry with the goal of removing technological barriers to full participation in and maturation of global crypto markets, both centralized and decentralized,” he wrote.

“I can’t wait to share more about what I’m doing next.”

“Until then, I’ll be assisting Sam [Bankman-Fried] and the team with this transition to ensure FTX ends the year with all its characteristic momentum.”

Jokes and activities

Sam Bankman-Fried and other top executives were said to make light of their proclivity to misplace millions of dollars in assets.

According to the report, SBF said:

“We sometimes find $50 million of assets lying around that we lost track of; such is life.”

Furthermore, according to the investigation, FTX had little to no records of daily trading activity, transactions with its sibling firms, and loans, claiming:

“Copies of key documentations – including executed loan agreements, intercompany agreements, acquisition and investment documents, bank and brokerage account statements, and contract and account information of all types – were incomplete, inaccurate, contradictory, or missing entirely.”

Structure

According to reports, the FTX organizational structure did not allow for distinct financial risk, treasury, or audit departments.

Furthermore, the firm commingled client cash and entirely disregarded user funds’ cybersecurity and safety.

FTX allegedly kept the majority of their assets in hot wallets while misrepresenting to consumers and third parties about their “cold wallets.”

What next?

As with the procedure of filing for bankruptcy, John J. Ray III’s interim report is the first of many to offer updates on the financial situation and progress achieved in the money recovery.

Ray also stated that they recovered $1.4 billion in digital assets and identified another $1.7 billion that they are seeking to recover.

On October 2, 2023, Sam Bankman-Fried will stand trial.

He will face many charges, including:

Fraud
Defrauding the Federal Election Commission
Allegedly bribing a Chinese government official

Crypto overlooked by regulators, they didn’t expect it to last

Clara Emily on April 10, 2023

Crypto — While cryptocurrencies have been on the market for more than a decade, there has only been limited regulatory activity in recent years.

Several nations and areas have already made strides, but it takes time for the United States to catch up.

Regulatory action is already sprouting up all over the world as officials are finally paying attention to the crypto sector.

A late arrival

Nicole Sandler, the head of digital policy at Barclays, recently appeared on a panel at the Citi Digital Money Conference in London.

She spoke on cryptocurrency regulations in Europe, the United Kingdom, and the United States.

Sandler stated that politicians’ plainly late arrival had been planned all along.

“I think one thing certain policymakers have said is that they left this market to do what it wanted to do because they thought it would essentially die,” she explained.

“And it hasn’t died, it’s grown, it’s grown, it’s grown.”

Experience

Nicole Sandler selected a few pages from her 2016 experience.

She met with the European Commission to explore a legal framework for digital assets.

Sandler maintained that the crypto sector was in its infancy at the moment, but he acknowledged its current expansion.

She also stressed that the emergence of cryptocurrencies was not the reason authorities disregarded it until recently.

“It wasn’t that it was nascent and they wouldn’t regulate it,” Sandler offered.

“It was a choice to see where the market went.”

“And now they know that they have to regulate it. But the problem is, regulation takes a long time from start to finish.”

The latest regulatory crackdown has sent shockwaves across the United States, where the situation is tense.

The FTX effect

Sam Bankman-Fried, the once-golden-boy of crypto, saw his crypto empire implode in November when exchange platform FTX went bankrupt.

FTX declared Chapter 11 bankruptcy, causing sister trading business Alameda Research, American subsidiary FTX.US, and other associated entities to follow suit.

SBF resigned as CEO as a result of the collapse.

The Securities and Exchange Commission acted decisively.

Following several delays, the SEC accused Sam Bankman-Fried, issuing a statement in November:

“The Securities Exchange Commission… charged Sam Bankman-Fried with orchestrating a scheme to defraud equity investors in FTX Trading LTD.”

They claimed they breached the Securities Exchange Acts of 1933 and 1934’s anti-fraud provisions.

It didn’t take long for the chips to fall, as key firm officials, including co-founder Gary Wang, Alameda CEO Caroline Ellison, and co-lead engineer Nishad Singh, were subsequently arrested.

Singh pled guilty to criminal charges early this month.

He was convicted of mismanagement at FTX as well as other offenses, including:

Wire fraud
Conspiracy to commit wire fraud
Money laundering
Conspiracy to defraud the US government through the violation of campaign finance laws

Meanwhile, Sam Bankman-Fried has pled not guilty to criminal charges stemming from his negligent administration of FTX.

Despite FTX’s dramatic demise, Nicole Sandler claimed that it had nothing to do with technology.

While rules may have been of assistance, she emphasized that the company’s demise could be attributed to a “bad actor.”

Sandler further pointed out that the firm’s terms and conditions did not state that they may take customer assets and utilize them for personal gain.

A witch-hunt

Other crypto businesses have also been prosecuted by the SEC, although for different reasons.

The SEC recently issued a Wells Notice to Coinbase, informing the California-based exchange that it will seek enforcement action against the business.

The letter also claimed that Coinbase’s staking products were unregistered securities.

According to a source, the company’s management are angry that the SEC allowed US investors to participate in cryptocurrency for years before unexpectedly yanking the rug out from under them.

As a result, the cryptocurrency community has been vociferous about the topic, slamming the SEC chair.

“People don’t like Gary Gensler, who’s the chair of the SEC, in the crypto space,” said Digital Economy Initiative director Ijeoma Okoli.

“But if people think back to about ten years ago, in the aftermath of the financial crisis, when the same man was the chair of the CFTC, the vast majority of the derivatives sector – the global derivatives sector – hated him.”

“So it’s not that he’s picking on crypto, this is just his MO.”

Alameda payments handed SBF billions while others only got millions

Vina Grady on March 17, 2023

Alameda – On Wednesday, the infamous crypto exchange business FTX’s new management made an unexpected announcement concerning its founder’s compensation.

The company’s co-founder and ex-boss, Sam Bankman-Fried, reportedly got $2.2 billion in payments and loans from Alameda Research.

The sum is enormous and sticks out in comparison to other executives.

Caroline Ellison, the former CEO of Alameda Research, received only $6 million in compensation.

According to new management documents, a total of $3.2 billion was awarded to ex-FTX workers, the vast majority of whom came from the company’s sister trading firm.

Alameda

When FTX went bankrupt in late 2022, Alameda Research was right in the middle of it.

Sam Bankman-Fried founded the quantitative trading firm as well.

According to newly appointed FTX CEO John J. Ray III, who took over leadership after SBF left, Alameda has the right to use FTX customer assets for its own objectives without oversight.

FTX, on the other hand, was previously regarded as one of the pinnacles of the Web3 period.

It was a cryptocurrency exchange where customers could purchase, sell, and speculate on the future prices of various cryptocurrencies.

Before its demise, FTX had over 134 enterprises under its umbrella and was located in the Bahamas, which was more open to bitcoin.

SBF founded Alameda in 2019, however he claims he will step down as CEO in 2021, leaving day-to-day operations in the hands of others.

Authorities suspect that the sudden collapse of FTX was caused by management putting extraordinarily risky wagers with customer cash given by Alameda Research.

The payouts

According to papers released this week by FTX’s new management, SBF received the majority of the $3.2 billion in compensation.

While he received the most money, former FTX director of engineering Nishad Singh received $587 million.

Meanwhile, co-founder Gary Wang pocketed $246 million.

Ryan Salame, former FTX Digital Markets co-CEO, earned $87 million, while Sam Trabucco, former Alameda Research co-head, received $25 million.

According to the announcement, they did not include the significant sum of more than $240 million spent on purchasing luxury property in the Bahamas.

It should also be mentioned that Trabucco stepped down as CEO of Alameda in August.

Since then, he has not been seen or heard from.

Despite the fact that the rest of SBF’s inner circle has already been prosecuted, prosecutors have refused to charge Sam Trabucco.

Ellison

Upon Trabucco’s resignation, Caroline Ellison was named Alameda Research’s sole CEO in October 2021.

They were once co-CEOs of the platform.

Ellison and Sam Bankman-Fried had an on-again, off-again relationship.

While her involvement in the company’s failure was well known, her background gained even more interest, since her now-deleted Tumblr blog gave an uncommon perspective on what transpired in the Bahamas penthouse.

The penthouse housed ten people, including Ellison and SBF, who made important decisions there.

The group was classified as a “polycule,” or a network of persons in a polyamorous relationship, so decisions were not the only thing going on.

In November, Ellison’s blog, which was active from 2014 until 2022, presented content that coincided closely with her past.

Her site shows a strong interest in racial science and polyamory.

It also provided further insight into the author’s viewpoint on the crypto industry, as expressed in one post:

“I didn’t get into this as a crypto true believer. It’s mostly scams and memes when you get down to it.”

The charges and the company today

Sam Bankman-Fried is currently facing 12 felony accusations in the United States, some of which were handed down in a superseding indictment in February.

The charges allegedly include a conspiracy to defraud FTX clients through derivatives purchases and sales.

In January, SBF pleaded not guilty to the initial charges.

Since then, he has been awaiting his trial in October.

Meanwhile, Ellison, Wang, and Singh have confessed and are cooperating with police.

FTX client cash worth billions of dollars are now missing, with a major amount allegedly taken.

Ava Labs CEO finds silver lining in crypto industry shift after FTX

Clara Emily on March 13, 2023

Ava Labs – The crypto market crashed in 2022, and it became even more chaotic when the largest crypto exchange platform FTX went bankrupt.

The fall caused a domino effect, putting financial hardship on other crypto firms who were exposed to FTX.

It also resulted in some firms declaring bankruptcy, closing down, or freezing assets.

Emin Gün Sirer, the founder and CEO of Ava Labs, accused Sam Bankman-Fried, the creator of FTX, of causing massive damage.

The news

The FTX collapse last autumn stung an already battered sector even more.

The collapse of the once-mighty crypto exchange harmed its reputation, particularly the industry’s legitimacy and confidence.

“The damage that Sam [Bankman-Fried] did is immeasurable,” said Sirer.

“All that goodwill that we built over many, many years of hard work is just usurped by some guy who comes in and puts on this boy genius act.”

The CEO of Ava Labs stated that he has witnessed the digital assets business evolve from nothing to what it is now.

He also mentioned that he worked hard as a computer science professor at Cornell University to bring additional knowledge and understanding into blockchain technology.

Sirer has also organized workshops and provided information about cryptocurrencies to legislators.

Emin Gün Sirer recounted how the prospect of Sam Bankman-Fried’s effect on the crypto realm kept him awake at night.

The CEO of Ava Labs stated that he was aware of shifting regulatory tides, warning that it may be risky for persons and organizations working in cryptocurrency.

SBF

The crypto market imploded in the summer of 2022, and digital asset values plummeted.

Sam Bankman-Fried, the now-famous FTX founder, rose to prominence during this period.

His profile soared, drawing comparisons to John Pierpont Morgan for the 30-year-old entrepreneur.

The crypto crisis was akin to the 1907 economic panic, and Morgan was important, if not godlike, in determining which enterprises would survive and whose would perish.

SBF’s reputation had been unrivaled for months, until everything changed in November.

Downward spiral

When FTX fell apart, Sam Bankman-reputation Fried’s as the crypto’s golden boy began to erode.

Following a run on the exchange triggered by a sharp decline in the FTT token, FTX’s native token, the firm declared bankruptcy.

According to the bankruptcy complaint, the crypto exchange did not maintain one-to-one reserves of customer assets.

As a result, FTX was unable to accept withdrawals.

Arrest

Sam Bankman-Fried was detained in December 2022.

He was eventually accused with a slew of offenses ranging from fraud to money laundering.

SBF is accused of stealing billions of dollars in client monies.

Sam Bankman-Fried pled not guilty despite growing evidence.

Later, the FTX founder would face further allegations, including illicit political donations.

Donations totaled tens of millions of dollars.

Scrutiny

Former partners compared SBF to Bernie Madoff as a result of his shenanigans.

Skybridge’s managing partner, Anthony Scaramucci, regarded SBF as a friend before his betrayal.

“I thought Sam was the Mark Zuckerberg of crypt,” said Scaramucci. “I did not think he was the Bernie Madoff of crypto. I got it wrong.”

Nevertheless, Ava Labs CEO claimed Sam Bankman-Fried’s lack of scrutiny was due to the image he worked hard to maintain.

Sirer discussed how he groomed his unkempt hair and spent so much money on marketing to change the world’s perception of him as a genius.

Aftermath

The aftermath of the FTX collapse, according to Emin Gün Sirer, would rely on establishing a positive discussion with regulators.

The CEO of Ava Labs emphasized the failure of numerous cryptocurrency startups and projects trapped in the company’s web of deception.

Additionally, Sirer stated that it is critical to stress that FTX’s fate was caused by a centralized body, not crypto itself.

Silver linings

After the conundrum FTX set up, Emin Gün Sirer is now looking for a silver lining.

Although he is aware of the harm and the subsequent spread to other firms, the Ava Labs CEO feels the damage would have been greater if it had gone unchecked.

“If we had given Sam a couple more years of runaway, it would have been worse,” said Sirer.

He also realized how SBF’s antics drew attention to crypto.

“I no longer have to educate people on what Bitcoin [or] Ethereum is.”

Emin Gün Sirer also expressed happiness that Ava Labs was never a “Sam coin.”

“We were never a Sam coin, and therefore we stayed out of that whole craziness,” said the Ava Labs CEO.

“And we’re just thanking our lucky stars for it.”

FTX Japan allows withdrawals again

Hector Andrews on March 13, 2023

FTX Japan – Despite the fact that FTX, a significant crypto exchange site, has been inactive for months, there has been movement in releasing the frozen monies.

Customers of FTX Japan may now withdraw their crypto deposits and fiat money, according to an announcement made on Monday by the company’s Japanese affiliate.

The withdrawal procedure will take place via the Liquid Japan cryptocurrency trading platform, which FTX purchased in the spring of 2022.

The news

Although withdrawals were suspended in November 2022 when Sam Bankman-Fried’s crypto empire failed and filed for bankruptcy, the latest news gives FTX Japan clients some cause for optimism.

The Tokyo-based business claims that customers who qualify can withdraw their money.

By email, they were informed of the procedure.

Customers must open a Liquid Japan account and validate the balance on their FTX Japan account in order to withdraw money.

The announcement

In a blog post, FTX Japan expressed regret to its clients and provided them with information on how to withdraw their money.

“We are very sorry for the concern and inconvenience caused to our customers due to the suspension of our service,” the blog post said.

“In order to proceed with withdrawals, customers who have assets in their FTX Japan account would need to confirm the balance of their assets and transfer them to their Liquid Japan account.”

“Customers who do not have a Liquid Japan account are required to open one before they can transfer assets.”

“We have sent an email to all eligible customers regarding the details of the procedures.”

“If you have not completed the procedure, please follow the instructions in the email and complete the process.”

“Please note that due to the large number of requests from customers, it may take some time for the withdrawal process to be completed.”

“We will announce the resumption of other FTX Japan services as soon as possible.”

Japanese subsidiary

FTX Japan was one of the more recent branches when compared to other subsidiaries.

It began operations in June 2022 and lasted less than six months until the cryptocurrency exchange went down.

“Japan is a highly regulated market with a potential market size of almost $1 trillion when it comes to cryptocurrency trading,” Sam Bankman-Fried said in June 2022.

SBF was chosen as the interim CEO when FTX Japan first went live.

Customers who utilized other FTX subsidiaries like FTX.US aren’t as fortunate as those who used FTX Japan, where the most recent advancement will allow customers to breathe.

While the international exchange is going through bankruptcy procedures in a Delaware court, other subsidiaries are still suspended.

The fall of an empire

The top cryptocurrency exchange in the market, if not the top one, was FTX.

However, the exchange’s bankruptcy filing in November 2022 shook the cryptocurrency community.

The exchange’s native cryptocurrency, FTT, had a sharp decline in price, which prompted the bankruptcy filing.

When assets began to leave FTX, it became clear that FTX was unable to maintain one-to-one reserves of client assets.

As a result, the exchange was unable to process withdrawals, which forced firm executives to declare bankruptcy.

As soon as Sam Bankman-Fried was taken into custody and accused with financial offenses like:

Wire fraud
Conspiracy to commit money laundering

Notwithstanding the weight of the evidence against him, SBF has entered a not guilty plea.

FTX progress

FTX submitted a motion in December 2022 seeking authorization for the sale of the four financially sound subsidiaries of the business, namely:

Embed Technologies
FTX Europe
FTX Japan
LedgerX

The goal of the initiative was to assist the corporation in raising capital and pay off creditors who are owed billions of dollars.

Recently, the Southern District of New York court presiding over SBF’s criminal case considered an addendum to his bail arrangement that forbade him from using devices.

He made the choice as a result of using the Signal app to communicate encrypted messages across a virtual private network.

The group in charge of FTX’s bankruptcy proceedings issued a warning last Friday about scam tokens posing as FTX customers’ debt.

“The FTX Debtors have not issued any debt token,” tweeted FTX. “Any such offers are unauthorized.”

Sam Bankman-Fried dismisses Argentina escape rumors

Clara Emily on March 13, 2023

Sam Bankman-Fried, founder and CEO of cryptocurrency exchange FTX, has faced a series of trials in recent weeks.

On November 11, Bankman-Fried stepped down as CEO following the opening of Chapter 11 bankruptcy proceedings in the District of Delaware.

Rumors have since circulated that he fled following the collapse of FTX.

Rumors

Recently, Crypto Twitter has been talking about a rumor that SBF (Sam Bankman-Fried) has fled to Argentina.

He was rumored to have escaped when his cryptocurrency exchange collapsed.

However, a text message to Reuters on Saturday revealed that Bankman-Fried was still in the Bahamas.

The outlet asked if the rumors were true, but he replied: “Nope.”

Tracking the rumors

Over the weekend, Twitter users speculated that Sam Bankman-Fried was on the run.

SBF has filed for Chapter 11 bankruptcy for FTX Group, which includes companies such as FTX Trading, FTX US and Alameda Research.

The rumor started when users tracked the coordinates of his private jet using ADS-B Exchange, a flight-tracking website.

The website suggested that Bankman-Fried’s Gulfstream G450 landed in Buenos Aires on early November 12 on a direct flight from Nassau, Bahamas.

Sam Bankman-Fried lives in a penthouse in Nassau with ten roommates, including Caroline Ellison, CEO of Alameda Research.

SBF

Sam Bankman-Fried was once considered the leading figure in the exponential growth of cryptocurrencies.

However, he is now at the center of the most high-profile scandal in the industry.

In less than a week, FTX fell from grace as the largest $32 billion cryptocurrency exchange to a bankrupt company with an $8 billion hole in its balance sheets.

According to Bloomberg, Bankman-Fried’s net worth fell from $16 billion to zero following the FTX crash.

Over the past few years, FTX has raised billions in venture capital from lenders such as:

Lightspeed Venture Partners
Ontario Teachers’ Pension Plan
Circle Internet Financial
Coinbase Ventures
Multicoin Capital
Paul Tudor Jones
Sequoia Capital

Reference:

Sam Bankman-Fried denies rumors that he fled to Argentina