US financial committee to hold hearing on FTX collapse in December Oluwapelumi Adejumo · 2 hours ago · 1 min read
The Committee wants to hear from Sam Bankman-Fried, Binance and other related entities in the FTX’s collapse.
1 min read
Updated: November 16, 2022 at 4:16 pm
Cover art/illustration via CryptoSlate
The United States House Committee on Financial Services plans to hold a hearing into FTX collapse in December.
According to the press statement, the committee would “hear from the companies and individuals involved, including Sam Bankman-Fried, Alameda Research, Binance, FTX, and related entities.”
The press release also noted that the hearing would focus on “the broader consequences for the digital asset ecosystem.”
Speaking on the development, Chairwoman Maxine Waters (D-CA) said:
“The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds. Unfortunately, this event is just one out of many examples of cryptocurrency platforms that have collapsed just this past year. “
Rep. Patrick McHenry (R-N.C.) said Congress “must get to the bottom of this for FTX’s customers and the American people.” He added that it was essential to “hold bad actors accountable so responsible players can harness technology to build a more inclusive financial system.”
Lawmakers in the U.K. already quizzed Binance for its role in the eventual collapse of FTX.
Meanwhile, Reuters reported that Sam Bankman-Fried was sued in a U.S. court by investors who alleged the company’s yield-bearing crypto accounts violated Florida’s law.
Drones, Fertility, And Defi — A Look At Alameda Research’s Massive $5.4 Billion Portfolio Of Investments
Over the last few weeks, there’s been a lot of information revealed surrounding the recent FTX and Alameda Research disaster. On Dec. 6, the Financial Times (FT) published documentation that shows Alameda’s investment portfolio, which alleges the company spent more than $5 billion on hundreds of investments. Some of the funds went to odd investments like a fertility company called Ivy Natal and a drone manufacturer called Brinc Drones.
Alameda Invested in Close to 500 Firms and Projects
During the last two years, FTX and Alameda Research spent billions on deals, sponsorships, and investments. At the end of January 2022, FTX looked colossal after it raised $400 million from investors like Softbank Vision Fund 2, Tiger Global, Temasek, Paradigm, and the Ontario Teachers’ Pension Plan Board.
After the Series C raise, FTX was valued at $32 billion and the former FTX CEO Sam Bankman-Fried (SBF) said FTX aimed to expand the firm’s “global reach.” After the revelations concerning Alameda’s balance sheet during the first week of November, FTX and SBF’s quantitative trading firm imploded.
Since then, FTX’s parent firm West Realm Shires Services, Alameda Research, and approximately 130 additional affiliated companies filed for Chapter 11 bankruptcy protection. This week on Dec. 6, 2022, FT released documentation tied to Alameda Research’s investments, which were close to 500 investments that added up to roughly $5.4 billion.
In addition to FT, The Block’s VP of research, Larry Cermak, exported the entire list of Alameda-based investments into an excel sheet. Cermak further noted that Alameda’s largest investments include Genesis Digital Assets, Anthropic, Digital Assets DA AG, K5, and IEX.
If the data is accurate, the documentation shows that Alameda invested a lot of money into blockchain projects and foundations, tokens, and non-fungible token (NFT) projects as well. This includes Hole Tokens, Polygon, Near, 1inch, Lido, Xterio, Aptos, and Yuga Labs. Polygon for instance received $50,000,000 from Maclaurin Investments Ltd., otherwise known as Alameda Ventures.
Near gathered $50 million from FTX Ventures Ltd., and Maclaurin gave Near $30,000,000. FTX Ventures gave Yuga Labs roughly $50 million and Aptos scored $74.9 million from Clifton Bay Investments, also known as Alameda Research Ventures. Alameda invested in well known funds like the Multicoin Venture Fund II and the Skybridge Capital II fund.
Money went to Chinese news companies such as Blockbeats, and O’daily News. The company invested in Paxos, Messari, Starkware, Circle, Fanatics, Magic Eden, and Sky Mavis (Axie Infinity). An Ohio-based produce and vertical farming firm called 80 Acres got $25 million and $11.5 million was funneled to a firm called Geniome.
A whopping $500 million went to the artificial intelligence (AI) research firm Anthropic and $1.5 million went to a fertility venture called Ivy Natal. FT described Alameda’s portfolio as a “disparate bundle of nearly 500 illiquid investments split across 10 holding companies.” The FT author further notes that “FT makes no claim as to the data’s accuracy or completeness” as far as the documentation of Alameda’s investments are concerned.
Tags in this story
500 illiquid investments, Alameda Research, Alameda Research CEO, aptos, Caroline Ellison, Circle, Fanatics, ftx, FTX companies, Geniome, Holding Companies, Lead up, Magic Eden, messari, Multicoin Venture, NEAR, O’daily News, Paxos, Polygon, Sam Bankman-Fried, sbf, Skybridge Capital, starkware, Yuga Labs
What do you think about all the alleged investments Alameda made? Let us know what you think about this subject in the comments section below.
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
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.
Up Or Down? What To Expect From Solana (SOL) In The Homestretch Of 2022
Solana is among the hardest hit by the demise of FTX, as the two companies have collaborated to establish Serum, a decentralized derivatives market.
This led to Solana being closely associated with the Sam Bankman-Fried crypto exchange, with more than $900 million worth of SOL being held by FTX.
Let’s have a quick overview:
- The company’s fundamentals are strong, therefore it should be able to start making money again soon.
- Constant pressure from technicals and bearish market circumstances keeps the price low.
Metrics, though, suggest SOL is making progress in its recovery from the catastrophe. Founder and CEO of the IBC Group Mario Nawfal has stated that the token’s fundamentals are “strong,” noting the token’s development growth, a healthy NFT marketspace, and a relatively high daily transaction volume compared to other L1 chains as evidence.
With SOL registering an increase in the weekly and bi-weekly timescales, is the token really recovering?
SOL’s Fortunes Have Yet To Improve
Despite Nawfal’s assertions, the data shows that token and ecosystem indicators are not looking well.
Messari data indicates that the asset’s volatility is at an all-time high of 2.00, suggesting that the asset is more likely to move during this period, whether bullish or bearish.
Sharpe’s ratio, which currently stands at -3.73, indicates a pessimistic near-term outlook. This indicates that SOL’s returns in relation to its volatility are close to or equal to zero.
With a rising triangle, SOL technicals continue to support the bearish trend.
The RSI is overbought on the 4-hour time frame, which drives the signal towards a bearish crossover. The MFI confirms the bearishness of SOL as it declines in tandem with the price. At the time of writing, SOL is trading at $13.836 with a red candle.
At of time of publication, the top and lower halves of the Bollinger band was $14.3602 and $13.3052. It also places SOL in a risky position, as a crunch zone appears to be building.
Too much FUD around Solana. The fundamentals look solid:
Dev growth second to ETH
NFT volume surprisingly healthy
FTX collapse makes SOL MORE decentralized
SOL daily transactions higher than all other L1s
Am I missing something?
— Mario Nawfal (@MarioNawfal) November 27, 2022
SOL And FUD
Even with excellent fundamentals, the EMA ribbon is in the midst of a bearish crossover, making recovery tough for SOL bulls.
Solana struggles to deal with the fear, uncertainty, and doubt around its ecosystem and SOL coin. For a recovery to even be a chance, maintaining support at $13,0769 is beneficial.
With a CMF of -0.07 and a bearish cross on the MACD, the price of SOL should decline to $13.0769 or below.
Crypto total market cap at $796 billion on the daily chart | Featured image: TheNewsCrypto, Chart: TradingView.com
FTX saga continues as this Committee Chair insists on getting SBF’s testimony
- Committee Chair Maxine Waters stated that she expects SBF to testify before the House committee
- Australian Regulatory body accused FTX Australia of exploiting loopholes to get licensed
As more corporations publicly state their exposure to FTX, the bankrupt exchange’s story continues snowballing. Sam Bankman-Fried, the man at the center of it all, has given multiple interviews in an effort to justify his part in it all.
However, the most recent exchange SBF had with a House Committee member increased the likelihood of an outcome against SBF. The chances that the company would be subject to greater examination alongside SBF have increased significantly.
Will SBF testify?
The House Financial Services Committee Chair Maxine Waters publicly criticized former FTX CEO Sam Bankman-Fried. SBF stated that he wished to testify only after “learning and examining what transpired at the exchange.”
Furthermore, on 6 December, Waters tweeted that Bankman-Fried had adequate information for the testimony. This could be stated on the basis of his many media interviews following the firm’s bankruptcy.
Based on your role as CEO and your media interviews over the past few weeks, it’s clear to us that the information you have thus far is sufficient for testimony. (1/3) https://t.co/YUVVjOkC40
— Maxine Waters (@RepMaxineWaters) December 5, 2022
On 13 December, Waters will preside over a hearing to investigate the fall of FTX. The committee has explicitly stated that it expects Bankman-Fried and others involved in the events surrounding the collapse of the exchange to testify.
Whether SBF responds to the summons remains to be seen, but it is becoming clear that the US legal system will investigate the incident.
FTX Exploit ASIC’s Loopholes
On 5 December, the head of Australia’s securities and investments watchdog, Joseph Longo, said that the defunct exchange was able to get a license in Australia by exploiting legal gaps. The statement was given before a joint parliament committee looking into companies and financial services.
When asked how and why ASIC allowed FTX to obtain an AFSL under its watch, Longo defended the regulator. He stated that a regulatory flaw precluded ASIC from acting and undertaking the appropriate checks.
Due to its December 2021 acquisition of IFS Markets, FTX purportedly avoided the normal procedures for acquiring an AFSL. The chairman also asked for this gap to be closed so that nothing like this can happen again, according to reports from the Australian Financial Review.
More on the FTX plate
During his most recent interview, SBF provided some extra details about FTX’s crash. When asked about whether FTX had a Chief Financial Officer (CFO), he made an oblique reference to the absence of such a position. However, he added that investors may still have optimism because FTX US was still highly solvent.
SBF further claimed that most remarks of John Ray – already entered into the court record – were false. He said no one on the current FTX team had contacted him for more information. Further, he did not elaborate on whether investors knew about Alameda‘s access to FTX.
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