New FTX CEO Ray announces steps taken to staunch bleeding cashflow Josh O’Sullivan · 5 hours ago · 1 min read
Chief Restructuring Officer and new CEO of FTX, John Ray begins securing digital assets and halting of FTX trading and withdrawal functions.
1 min read
Updated: November 12, 2022 at 10:13 pm
Cover art/illustration via CryptoSlate
The general counsel of FTX US, Ryne Miller, has released a statement from John J. Ray III, Chief Restructuring Officer and now-appointed CEO of FTX related to “unauthorized” access to FTX funds.
1/ Statement from John Ray, Chief Restructuring Officer and CEO of @FTX_Official — Consistent with their obligations as Chapter 11 Debtors-in-Possession, FTX US and FTX [dot] com continue to make every effort to secure all assets, wherever located.
— Ryne Miller (@_Ryne_Miller) November 12, 2022
Ray’s statement highlights the continued efforts to ensure all assets are secured “wherever located” and explains that the team is now “in the process of removing trading and withdrawal functionality.”
Digital assets identified are to be found and moved to a “new cold wallet custodian.” Ray also confirms the reports on “unauthorized access to certain assets,” stating that this has indeed occurred.
2/ Among other things, we are in the process of removing trading and withdrawal functionality and moving as many digital assets as can be identified to a new cold wallet custodian. As widely reported, unauthorized access to certain assets has occurred.
— Ryne Miller (@_Ryne_Miller) November 12, 2022
The next steps described in Ray’s statement detail that “an active fact review and mitigation exercise was initiated immediately in response.”
“We have been in contact with, and are coordinating with law enforcement and relevant regulators.”
Having previously handled the liquidation of Enron Corp — a historical and world-renowned bankruptcy event – Ray was called in to take over FTX on Friday evening.
Insights on Sam Bankman-Fried’s ‘dark’ Republican political donations
Insights on Sam Bankman-Fried’s ‘dark’ Republican political donations Samuel Wan · 40 mins ago · 2 min read
YouTuber Coffeezilla gives his take on a Tiffany Fong interview with Sam Bankman-Fried, in which he claimed to be a secret Republican donor.
2 min read
Updated: November 30, 2022 at 2:09 pm
Cover art/illustration via CryptoSlate
Former FTX CEO Sam Bankman-Fried (SBF) gave his first interview with “citizen journalist” Tiffany Fong post-collapse.
The pair discussed multiple aspects of the FTX saga, including the “backdoor,” FTT as collateral, and his regrets. But of particular interest were SBF’s comments on dark money donations made to Republican politicians.
It is widely known SBF was a significant supporter of the Democrat administration. His $37 million donations made him the party’s second-biggest donor, after investor George Soros.
Some speculate this link is a factor in the lack of criminal proceedings against him. For example, lawyer John E. Deaton questioned why authorities have failed to respond, calling the criminal justice system “compromised.”
Let me make this clear if SBF isn’t arrested and charged with fraud, wire-fraud, theft, and possibly money laundering before and instead gets to spew out his bullshit narrative, our system of justice has been compromised. @ewarren you claim to be for the little guy, where are you https://t.co/cdmOa7U0an
— John E Deaton (@JohnEDeaton1) November 23, 2022
However, based on Fong’s interview, it seems SBF has more political clout than first thought.
Sam Bankman-Fried played both sides
In recent months, Fong’s investigations into Celsius, and now FTX, have earned her a reputation for sound investigative journalism.
During the 20-minute interview, the issue of political donations cropped up, with SBF saying he donated “about the same amount” of money to both parties. Further, donations to the Republican party were “dark.”
“I donated to both parties, I donated about the same amount to both parties… All my Republican donations were dark.”
Explaining why he chose this route, SBF said it was not for regulatory reasons. Rather, it was to quell the potential backlash from left-biased news outlets.
“It’s because reporters freak the f*ck out if you donate to Republican. They’re all secretly liberal and [I] didn’t want to have that fight, so I made all the Republican ones dark.”
Chiming in on the disclosure, YouTuber Coffeezilla aka Stephen Findeisen, said there was a lot to unpack with SBF’s comments.
Firstly, referring to SBF’s now infamous tweet in which he said “FTX is fine,” Coffezilla said he is skeptical about whether the former CEO is telling the truth. Nonetheless, whether he is lying or not, it is a lose-lose situation for SBF.
Sharing his insights, Coffeezilla said it goes to show that SBF has no political agenda, only that he wanted to be powerful and to be seen to care, “that’s why he played both sides.”
“If he’s lying, this looks bad for him. But if he’s telling the truth it looks worse. It shows you how cynical Sam was. He never cared about politics. He cared about power and perception”
Coffeezilla continued by saying this mindset is about “trying to craft an image.” With the generous billionaire image in tatters, SBF is now trying to deflect the criminal narrative into one of “the smart guy who made an embarrassing mistake.”
Crypto Exchange Bitfront Shuts Down Amid Industry Challenges
Cryptocurrency exchange Bitfront has announced its intention to cease operations in the coming months, citing challenges facing the industry. The U.S. trading platform, backed by Japan’s social media giant Line, indicated the decision is unrelated to the collapse of FTX.
Line-Supported Digital Asset Exchange Bitfront Suspends New Sign-ups
Bitfront, a crypto exchange operating in the United States, has suspended new sign-ups and credit card payments while planning to cease operations in a few months’ time. The move comes despite efforts to overcome the current challenges in the “rapidly evolving” crypto industry, the company announced, quoted by Reuters and Bloomberg.
In the statement published on its website, the exchange explained it has “regretfully determined that we need to shut down Bitfront in order to continue growing the Line blockchain ecosystem and Link token economy.” The U.S.-based platform, which launched in 2020, is backed by the Japanese social media firm Line Corp.
Bitfront also pointed out that the decision to close down is not related to the problems of “certain exchanges that have been accused of misconduct,” an indirect reference to FTX, one of the largest global players in the market before it collapsed and filed for bankruptcy protection on Nov. 11 amid liquidity issues.
Other companies in the space, like Blockfi for example, have been hurt by exposure to FTX. The crypto lender announced on Monday it has petitioned for Chapter 11 bankruptcy protection along with eight of its affiliates. When Blockfi paused withdrawals earlier this month, it specifically cited the “lack of clarity” regarding the state of FTX at the time.
With a 24-hour volume of less than $94 million, only a dozen trading pairs and six coins, according to Coingecko, Bitfront has a small share of a market with a total trading volume of almost $57 billion over the same period, the Bloomberg report noted.
The exchange informed users that new sign-ups and card payments have been suspended on Nov. 28 while deposits in cryptocurrency and U.S. dollars will be halted on Dec. 30. It also urged customers to withdraw all their assets by March 31, 2023, when all withdrawals will be suspended as well.
Tags in this story
Bankruptcy, Bitfront, Challenges, collapse, Crypto, crypto exchange, Cryptocurrencies, Cryptocurrency, Exchange, ftx, Issues, Japan, Line, operations, Services, shutdown, Social Media, suspension, U.S.
Do you expect other crypto trading platforms to go out of business? Let us know in the comments section below.
Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Ripple general counsel calls BlockFi bankruptcy another success for SEC’s ‘regulation by enforcement’ approach
Ripple general counsel calls BlockFi bankruptcy another success for SEC’s ‘regulation by enforcement’ approach Oluwapelumi Adejumo · 2 hours ago · 2 min read
Ripple CTO David Schwartz said BlockFi might have gotten a loan from FTX to pay off the SEC’s settlement.
2 min read
Updated: November 29, 2022 at 12:07 pm
Cover art/illustration via CryptoSlate
Ripple general counsel Stuart Alderoty described BlockFi’s bankruptcy as another success for the U.S. SEC and its regulation-by-enforcement approach.
Another SEC “regulation by enforcement” success story.
Months after $100M BlockFi/SEC deal BlockFi in b/cy. $275M loan outstanding to FTX from BlockFi. Unknown amounts owed to BlockFi from FTX. Nothing ever registered. Fines paid? With whose money? Consumers decimated. https://t.co/XWflfRDIMk
— Stuart Alderoty (@s_alderoty) November 28, 2022
Alderoty referenced the SEC’s $100 million settlement with BlockFi, asking whose money was used to pay the settlement. The Ripple lawyer noted that nothing was ever “registered” in the deal, wondering if BlockFi made the first two payments to the regulator.
Nothing was ever “registered” per the BlockFi/SEC deal. What about the first two payments on the $100M fine? If they were made, did the SEC confirm BlockFi’s ability to pay and/or the source of funds? FTX b/cy shows a $250M loan to BlockFi and now customer funds are blocked.
— Stuart Alderoty (@s_alderoty) November 27, 2022
Alderoty also questioned whether the SEC confirmed the crypto lender’s “ability to pay and/or the source of funds” if BlockFi made the payments.
In February, BlockFI agreed to pay the US SEC a $100 million fine for its failure to register its lending product with the regulator. The SEC’s top officials repeatedly highlighted how this enforcement action was a major win for the commission.
In July, BlockFi received a $400 million line of credit from FTX. The Sam Bankman-Fried-led exchange would later file for bankruptcy, forcing the crypto lender to halt withdrawals for its customers.
Ripple CTO alleges SEC fine made BlockFi financially weak
Ripple CTO David Schwartz said BlockFi might have gotten a loan from FTX to pay off the SEC’s settlement. He added that this might have forced the lender to store its assets on FTX in order to continue operating.
“In other words, the SEC may have made BlockFi so weak financially that it had no choice but to store crypto at FTX to continue operating, possibly the cause of their collapse.”
SEC among BlockFi’s largest creditors
Meanwhile, Nov. 28 court filings have shown the SEC listed among BlockFi’s creditors. According to the court document, the firm owes the financial regulator $30 million.
The bankruptcy filing showed that the lender has over 100,000 creditors, owing over $1 billion to its top 3 creditors.
Its largest creditor is Ankura Trust Company, which is owed more than $729 million. Its second-largest creditor is FTX-related West Realm Shires Inc. which is owed $275 million. An unnamed customer is owed $48 million.
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