FTX’s sudden and drastic collapse has resulted in shivers of horror spreading throughout the crypto ecosystem. The Crypto exchange filed for Chapter 11 bankruptcy protection in the US on November 11.
Multiple FTX Group companies are involved in the US bankruptcy proceedings, with probably over 1 million creditors, all of which are struggling now in their own ways.
Lawyers Provide Advice
Amidst any bankruptcy proceeding, the major concern that arises is from the investors, who are keen to know when they will be able to retrieve their money. The FTX case is no exception.
Insolvency lawyer Stephen Earel, a partner at Co Cordis in Australia, said it will be an “enormous exercise” in the liquidation process to “realize” the crypto assets and then figure out how to divide the funds, with the process potentially taking years, if not decades. This is because cross-border insolvency issues are complicated and there are several competing jurisdictions.
Further, Simon Dixon, founder of global investing platform BnkToTheFuture, stated that everybody holding funds on FTX will become creditors, and a creditors committee will be formed to represent their interests. Depending on what is left over after bankruptcy fees, creditors will eventually have access to the remaining assets.
Irina Heaver, a partner at Keystone Law in the UAE and a lawyer for digital assets, claimed that since the Middle East had the third-largest FTX user base, users there are also suffering from the company’s collapse.
The recently established Dubai Virtual Assets Authority regulator (VARA) has already granted FTX a license and regulatory oversight; this raises significant challenges for the regulators because they are already dealing with a “huge regulatory failure.”
People who have suffered financially have been advised by Heaver’s to seek legal advice and collaborate with “other affected parties.”
FTX’s Plea For Help
The now-bankrupt organization, headed by new ftx exchange ftx exchange Centralised Exchange Group CEO John J. Ray III, called upon its associates to “take all measures” needed to acquire the funds so that they could be handed back to the estate supervising FTX’s bankruptcy.
Crypto exchange Kraken to start layoffs as crypto winter persists
- Kraken plans to lay off nearly 30 percent of its overall headcount because of crypto winter
- The company is providing a number of support for those losing their jobs
The second largest crypto exchange in the United States – Kraken – announced it would start laying off its employees. The crypto platform is planning on reducing its overall headcount by 30%. This means that approximately 1,100 employees would lose their jobs.
Notably, the company has cited market conditions as the reason behind the move. The firm also stated that its first call of action was to slow down the hiring process. However, the firm had to opt for this action due to “negative influences on the financial markets.”
The reduction in the staff would put the company’s overall headcount the same as it was a year ago. The firm said,
“Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets. This resulted in significantly lower trading volumes and fewer client sign-ups.”
In addition, Kraken has listed a number of support that would be provided to those losing their jobs. This includes separation pay, healthcare, performance bonus, and outplacement support. The crypto exchange will also be giving immigration support to those working on a company-sponsored visa.
Jesse Powell, the CEO and co-founder of Kraken, said,
“I’m confident the steps we are taking today will ensure we can continue to deliver on our mission which the world needs now more than ever before. I remain extremely bullish on crypto and Kraken.”
Kraken is the latest to join the layoff trend, while Binance moves the opposite direction
Notably, Kraken is the latest crypto exchange to join the layoff trend in the crypto market. Many other exchanges including Coinbase have been actively laying off their employees since the beginning of this year. Just last month, Crypto.com, another prominent crypto exchange, reportedly laid off as much as 30%-40% of the overall workforce.
However, the only prominent crypto exchange that has not yet laid off any employees is Binance. The largest crypto exchange in the world is, in fact, hiring more employees actively. In June, when most of the companies were engaging in a firing saga, Binance announced it was going add 2000 more to its global team.
Moreover, Binance’s CEO – Changpeng Zhao – recently said that the team has doubled from what it was a year ago. CZ also said,
At the time of this tweet, @Binance had 5900 people. Today we have 7400+ people. Targeting 8000 or so by end of year. Hiring continues.
BlockFi Files For Chapter 11 Bankruptcy Protection
Another crypto company has recently fallen victim to the FTX contagion. As reported by Reuters, BlockFi, a cryptocurrency lender and financial services firm filed for bankruptcy protection on Monday. On November 11, the same day FTX filed for bankruptcy, BlockFi first stopped allowing withdrawals.
“We, like the rest of the world, found out about this situation through Twitter. We are shocked and dismayed by the news regarding FTX and Alameda,” BlockFi wrote in a letter at that time. A few weeks ago, the company had stated it had $256.9m in cash on hand, which should be enough to fund continued operations. Additionally, it stated that platform operations are currently suspended.
BlockFi stated on its website a few days after FTX filed for bankruptcy that it was unable to conduct normal business, acknowledged that it had “significant exposure” to FTX, and would evaluate efforts to recover “all obligations owed to BlockFi.”
“We do have significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US. While we will continue to work on recovering all obligations owed to BlockFi, we expect that the recovery of the obligations owed to us by FTX will be delayed as FTX works through the bankruptcy process,” BlockFi said in the November update.
BlockFi will begin the restructuring process in order to protect its clients. “With the collapse of FTX, the BlockFi management team and board of directors immediately took action to protect clients and the Company,” said Mark Renzi of Berkeley Research Group, the Company’s financial advisor, as reported by Business Wire.
The company apologized to its clients and investors and said, “We look forward to transparency through our reorganization, and will work to keep clients and stakeholders informed as we make progress.”
However, they assured that they will continue to work on the obligations. But due to the ongoing FTX debacle, the company said that recoveries from FTX will be delayed.
At the time of the FTX collapse, BlockFi wrote in a letter, “We, like the rest of the world, found out about this situation through Twitter. We are shocked and dismayed by the news regarding FTX and Alameda.”
Stay Tuned For the complete story…
Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
Bitboy Crypto Camps Outside SBF’s Penthouse in the Bahamas
Crypto Twitter influencers are swarming to the Bahamas in search of Sam Bankman-Fried, the former CEO of the troubled cryptocurrency exchange FTX. Ben Armstrong aka BitBoy Crypto, a popular crypto influencer, has gone to the Bahamas in an effort to have a conversation with Sam Bankman-Fried, the founder and former CEO of FTX.
BitBoy has been tweeting and sharing images of himself camped out in front of Bankman-house Fried’s in the Bahamas for the past few days. The influencer criticized Bankman-Fried after FTX, once the third-largest cryptocurrency exchange in the world, just went under, causing a crypto crash. In the wake of FTX’s bankruptcy, he also blasted the celebrities who pushed the company on social media.
More influencers are en route to see what details they could possibly discover. YouTuber Gabriel Haines raised $10,000 through a successful crowdsourcing campaign to send him and his family to the Bahamas after tweeting several viral rants about the disaster surrounding SBF and FTX.
Since September of last year, the now-bankrupt exchange has had its headquarters in the Bahamas, where it has operated out of a penthouse at the Albany Resort, a gated community on the island of New Providence. The area is currently the focus of impromptu investigations purportedly conducted on behalf of the crypto community.
Bitboy Shifts his Focus to Solana
BitBoy has moved his attention to the Solana project now. This came after he said that Alameda Research was in charge of the Solana blockchain halts and was using them to launder money.
“Every time the Solana blockchain paused… it was actually Alameda Research laundering money and brute forcing transactions. There are other out there receipts. And if you think about it… knowing what we know now, does this surprise, anyone? If you are in $SOL, run for hills,” he had tweeted.
Elena is an expert in technical analysis and risk management in cryptocurrency market. She has 10+year experience in writing – accordingly she is avid journalists with a passion towards researching new insights coming into crypto erena.
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