NEW YORK \u2014 Sam Bankman-Fried\u2019s lawyers and federal prosecutors clashed on Wednesday in opening statements over whether the former billionaire\u2019s FTX cryptocurrency exchange collapsed due to \u201cmassive\u201d fraud by its founder or errors in business judgment.
\nMr. Bankman-Fried, 31, has pleaded not guilty to charges he used FTX customer money from the exchange\u2019s 2019 launch until its November 2022 bankruptcy in order to prop up his hedge fund, Alameda Research, buy luxury real estate, and donate to US political campaigns and candidates.
\nThe trial kicked off with jury selection on Tuesday, nearly a year after the collapse of FTX shocked financial markets and tarnished the budding entrepreneur and philanthropist\u2019s reputation as an honest actor in a crypto sector prone to scams and purported get-rich-quick schemes.
\nIn his opening statement on Wednesday, defense lawyer Mark Cohen portrayed the Massachusetts Institute of Technology physics graduate as a \u201cmath nerd\u201d who overlooked risk management in building FTX, but did not steal customer money.
\nMr. Cohen acknowledged that FTX lent money to Alameda, but said Mr. Bankman-Fried \u201creasonably believed\u201d that those loans were permitted and backed up by collateral. He said some key aspects of FTX\u2019s business, such as risk management, were \u201coverlooked\u201d as the startup grew rapidly.
\n\u201cSam and his colleagues were building the plane as they were flying it,\u201d Mr. Cohen said. \u201cNo one person \u2014 no one CEO, certainly not Sam, could be everywhere and do everything.\u201d
\nBut prosecutor Thane Rehn said Mr. Bankman-Fried took more than $10 billion from unsuspecting FTX customers, and that he \u201cdoubled down\u201d when Alameda\u2019s risky investments in cryptocurrency began to lose money in May and June of last year.
\n\u201cAll of it was built on lies,\u201d Mr. Rehn said. \u201cHe was using his company, FTX, to commit fraud on a massive scale, and the money he was spending to build his empire \u2014 it was money he was stealing from FTX customers.\u201d
\nProsecutors are expected to call three former members of Mr. Bankman-Fried\u2019s inner circle \u2014 former Alameda chief executive Caroline Ellison and former FTX executives Nishad Singh and Gary Wang \u2014 to testify against him. All three have pleaded guilty and agreed to cooperate with prosecutors.
\n\u201cThey will give you an insider\u2019s view of how the crimes occurred,\u201d Mr. Rehn said in his opening statement, without naming the witnesses.
\nMr. Cohen suggested they may \u201cspin\u201d Mr. Bankman-Fried\u2019s good-faith decisions that they agreed with at the time as deceitful in hindsight. He also said Mr. Bankman-Fried urged Ms. Ellison to hedge Alameda\u2019s crypto bets, but that she did not.
\n\u201cHere in the real world, cooperation means testifying against Sam in a way that will help the government\u2019s case,\u201d Mr. Cohen said.
\nJurors are expected to hear from Mr. Wang by the end of the week, another prosecutor, Danielle Sassoon, said in court.
\nEarlier on Wednesday, a jury of 12 primary members and six alternates was selected from a pool of residents of Manhattan, the Bronx, and New York City\u2019s northern suburbs. The group includes a retired investment banker, a school librarian and a train conductor.
\nMr. Bankman-Fried\u2019s parents, Stanford Law School professors Joseph Bankman and Barbara Fried, were seen arriving at the federal courthouse in Lower Manhattan on Wednesday morning. They had not attended the trial\u2019s first day.
\nOnce known for his casual attire and mop of unkempt curls, Mr. Bankman-Fried sported a trim haircut and wore a suit and tie in court on both Tuesday and Wednesday.
\nHe has been detained at the Metropolitan Detention Center in Brooklyn since Aug. 11, when US District Judge Lewis Kaplan jailed him for likely tampering with witnesses, including by sharing Ms. Ellison\u2019s private writings with a reporter. Mr. Bankman-Fried and Ms. Ellison were at times romantic partners. \u2014 Reuters
\n", "content_text": "NEW YORK \u2014 Sam Bankman-Fried\u2019s lawyers and federal prosecutors clashed on Wednesday in opening statements over whether the former billionaire\u2019s FTX cryptocurrency exchange collapsed due to \u201cmassive\u201d fraud by its founder or errors in business judgment.\nMr. Bankman-Fried, 31, has pleaded not guilty to charges he used FTX customer money from the exchange\u2019s 2019 launch until its November 2022 bankruptcy in order to prop up his hedge fund, Alameda Research, buy luxury real estate, and donate to US political campaigns and candidates.\nThe trial kicked off with jury selection on Tuesday, nearly a year after the collapse of FTX shocked financial markets and tarnished the budding entrepreneur and philanthropist\u2019s reputation as an honest actor in a crypto sector prone to scams and purported get-rich-quick schemes.\nIn his opening statement on Wednesday, defense lawyer Mark Cohen portrayed the Massachusetts Institute of Technology physics graduate as a \u201cmath nerd\u201d who overlooked risk management in building FTX, but did not steal customer money.\nMr. Cohen acknowledged that FTX lent money to Alameda, but said Mr. Bankman-Fried \u201creasonably believed\u201d that those loans were permitted and backed up by collateral. He said some key aspects of FTX\u2019s business, such as risk management, were \u201coverlooked\u201d as the startup grew rapidly.\n\u201cSam and his colleagues were building the plane as they were flying it,\u201d Mr. Cohen said. \u201cNo one person \u2014 no one CEO, certainly not Sam, could be everywhere and do everything.\u201d\nBut prosecutor Thane Rehn said Mr. Bankman-Fried took more than $10 billion from unsuspecting FTX customers, and that he \u201cdoubled down\u201d when Alameda\u2019s risky investments in cryptocurrency began to lose money in May and June of last year.\n\u201cAll of it was built on lies,\u201d Mr. Rehn said. \u201cHe was using his company, FTX, to commit fraud on a massive scale, and the money he was spending to build his empire \u2014 it was money he was stealing from FTX customers.\u201d\nProsecutors are expected to call three former members of Mr. Bankman-Fried\u2019s inner circle \u2014 former Alameda chief executive Caroline Ellison and former FTX executives Nishad Singh and Gary Wang \u2014 to testify against him. All three have pleaded guilty and agreed to cooperate with prosecutors.\n\u201cThey will give you an insider\u2019s view of how the crimes occurred,\u201d Mr. Rehn said in his opening statement, without naming the witnesses.\nMr. Cohen suggested they may \u201cspin\u201d Mr. Bankman-Fried\u2019s good-faith decisions that they agreed with at the time as deceitful in hindsight. He also said Mr. Bankman-Fried urged Ms. Ellison to hedge Alameda\u2019s crypto bets, but that she did not.\n\u201cHere in the real world, cooperation means testifying against Sam in a way that will help the government\u2019s case,\u201d Mr. Cohen said.\nJurors are expected to hear from Mr. Wang by the end of the week, another prosecutor, Danielle Sassoon, said in court.\nEarlier on Wednesday, a jury of 12 primary members and six alternates was selected from a pool of residents of Manhattan, the Bronx, and New York City\u2019s northern suburbs. The group includes a retired investment banker, a school librarian and a train conductor.\nMr. Bankman-Fried\u2019s parents, Stanford Law School professors Joseph Bankman and Barbara Fried, were seen arriving at the federal courthouse in Lower Manhattan on Wednesday morning. They had not attended the trial\u2019s first day.\nOnce known for his casual attire and mop of unkempt curls, Mr. Bankman-Fried sported a trim haircut and wore a suit and tie in court on both Tuesday and Wednesday.\nHe has been detained at the Metropolitan Detention Center in Brooklyn since Aug. 11, when US District Judge Lewis Kaplan jailed him for likely tampering with witnesses, including by sharing Ms. Ellison\u2019s private writings with a reporter. Mr. Bankman-Fried and Ms. Ellison were at times romantic partners. \u2014 Reuters", "date_published": "2023-10-05T17:33:37+08:00", "date_modified": "2023-10-05T17:30:43+08:00", "authors": [ { "name": "大象传媒", "url": "/author/zievelivminerth/", "avatar": "https://secure.gravatar.com/avatar/8c6621749f5c11b2227b3eaf717ce98695677abb3578c9bc29a69874709f78da?s=512&d=mm&r=g" } ], "author": { "name": "大象传媒", "url": "/author/zievelivminerth/", "avatar": "https://secure.gravatar.com/avatar/8c6621749f5c11b2227b3eaf717ce98695677abb3578c9bc29a69874709f78da?s=512&d=mm&r=g" }, "image": "/wp-content/uploads/2023/10/Sam-Bankman-Fried.jpg", "tags": [ "cryptocurrency", "Featured2", "FTX", "Sam Bankman-Fried", "Editors' Picks", "World" ] }, { "id": "/?p=517623", "url": "/world/2023/04/18/517623/ftx-celebrity-promoters-say-crypto-investors-cannot-sue-over-accounts/", "title": "FTX celebrity promoters say crypto investors cannot sue over accounts", "content_html": "CELEBRITIES who promoted FTX, including NFL quarterback Tom Brady and comedian Larry David, said an investor lawsuit seeking damages in the wake of the cryptocurrency exchange\u2019s collapse should be dismissed.
\nThe proposed class action in Miami alleges that FTX yield-bearing accounts were unregistered securities that were unlawfully sold in the United States, which required the promoters to disclose the compensation they received.
\nThe lawsuit seeks damages from FTX founder Sam Bankman-Fried alongside several celebrities who promoted FTX including Mr. David, the creator of TV shows Seinfeld and Curb Your Enthusiasm. It also seeks damages from a National Basketball Association team that promoted FTX, the Golden State Warriors.
\nThe celebrities and the Warriors said in court papers filed on Friday that they had never pitched the accounts at issue in the case and did not cause the investors\u2019 losses.
\nThey said that under the investors\u2019 theory, \u201cactors in any brokerage ad would be liable for selling any security that an individual user later purchased using the brokerage\u2019s services.\u201d
\n\u201cThat\u2019s nonsense,\u201d the celebrities said.
\nA lawyer for the investors did not immediately reply to a request for comment.
\nMr. David starred in a commercial for FTX that aired during the 2022 Super Bowl in which he portrayed fictional characters dismissing important innovations throughout history and ended with the message \u201cDon\u2019t Miss Out on Crypto.\u201d
\nMr. Bankman-Fried argued in court papers that the case against him should be paused while he fights criminal charges in New York. The investors did not oppose the request, he said.
\nProsecutors have charged Mr. Bankman-Fried, 31, with stealing billions of dollars in FTX customer funds to plug losses at Alameda Research, and making tens of millions of dollars in illegal political donations to buy influence in Washington, D.C. He has pleaded not guilty.
\nThe case is Garrison v. Bankman-Fried et al., No. 22-23753, US District Court, Southern District Of Florida. \u2014 Reuters
\n", "content_text": "CELEBRITIES who promoted FTX, including NFL quarterback Tom Brady and comedian Larry David, said an investor lawsuit seeking damages in the wake of the cryptocurrency exchange\u2019s collapse should be dismissed.\nThe proposed class action in Miami alleges that FTX yield-bearing accounts were unregistered securities that were unlawfully sold in the United States, which required the promoters to disclose the compensation they received.\nThe lawsuit seeks damages from FTX founder Sam Bankman-Fried alongside several celebrities who promoted FTX including Mr. David, the creator of TV shows Seinfeld and Curb Your Enthusiasm. It also seeks damages from a National Basketball Association team that promoted FTX, the Golden State Warriors.\nThe celebrities and the Warriors said in court papers filed on Friday that they had never pitched the accounts at issue in the case and did not cause the investors\u2019 losses.\nThey said that under the investors\u2019 theory, \u201cactors in any brokerage ad would be liable for selling any security that an individual user later purchased using the brokerage\u2019s services.\u201d\n\u201cThat\u2019s nonsense,\u201d the celebrities said.\nA lawyer for the investors did not immediately reply to a request for comment.\nMr. David starred in a commercial for FTX that aired during the 2022 Super Bowl in which he portrayed fictional characters dismissing important innovations throughout history and ended with the message \u201cDon\u2019t Miss Out on Crypto.\u201d\nMr. Bankman-Fried argued in court papers that the case against him should be paused while he fights criminal charges in New York. The investors did not oppose the request, he said.\nProsecutors have charged Mr. Bankman-Fried, 31, with stealing billions of dollars in FTX customer funds to plug losses at Alameda Research, and making tens of millions of dollars in illegal political donations to buy influence in Washington, D.C. He has pleaded not guilty.\nThe case is Garrison v. Bankman-Fried et al., No. 22-23753, US District Court, Southern District Of Florida. \u2014 Reuters", "date_published": "2023-04-18T18:30:56+08:00", "date_modified": "2023-04-18T18:30:56+08:00", "authors": [ { "name": "大象传媒", "url": "/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/fc38d2668fdee8f1e2b22df5e72ae6f4ad265ab7814de4aa60060edd377a70ce?s=512&d=mm&r=g" } ], "author": { "name": "大象传媒", "url": "/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/fc38d2668fdee8f1e2b22df5e72ae6f4ad265ab7814de4aa60060edd377a70ce?s=512&d=mm&r=g" }, "image": "/wp-content/uploads/2022/11/FTX.jpg", "tags": [ "cryptocurrency", "FTX", "World" ] }, { "id": "/?p=487775", "url": "/world/2022/11/17/487775/ftx-fallout-hits-crypto-lender-genesis-bankman-fried-celebs-sued/", "title": "FTX fallout hits crypto lender Genesis; Bankman-Fried, celebs sued", "content_html": "Major crypto player Genesis Global Capital suspended customer redemptions in its lending business on Wednesday, citing the sudden failure of crypto exchange FTX, while court papers showed FTX founder Sam Bankman-Fried faces legal action.
\nFTX filed for bankruptcy protection in the United States on Friday in the highest-profile crypto blowup to date, after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal. After a flurry of tweets and interviews by Bankman-Fried, FTX said he \u201chas no ongoing role\u201d at the company and does not speak on its behalf.
\nThe implosion of FTX has rippled across the industry, hobbling liquidity at firms with exposure to what was once one of the world\u2019s biggest crypto exchanges, and prompting investigations by regulators in several countries.
\nLawmakers from the US Congress said on Wednesday they were planning hearings on FTX before yearend, while the New York Department of Financial Services said it is monitoring the situation at Genesis.
\nWhile not naming FTX directly, Treasury Secretary Janet Yellen said on Wednesday that more effective oversight is needed over the crypto markets to address risks previously identified that were \u201cat the center of the crypto market stresses observed over the past week,\u201d and urged Congress to act quickly.
\nVenture capital firm Digital Currency Group, the ultimate parent of Genesis, as well as of crypto asset manager Grayscale, said on Twitter that Genesis\u2019 decision to suspend redemptions \u201cwas made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion.\u201d
\nGenesis, which also offers crypto trading and custody services through an affiliate that are not affected, had $2.8 billion in total active loans at the end of the third quarter, according to the company\u2019s website. Last year, it extended $130.6 billion in crypto loans and traded $116.5 billion in assets, it said.
\nThe suspension at Genesis \u201chas no impact on the business operations of DCG and our other wholly owned subsidiaries,\u201d the company said.
\nStill, Grayscale Bitcoin Trust GBTC.PK, the world\u2019s largest bitcoin fund, plunged almost 7% on Wednesday, while the price of bitcoin fell 2.6% to $16,400 and is down around 20% this month.
\nCrypto exchange Gemini, which was founded by the Winklevoss twins, said its yield-generating \u201cEarn\u201d program, which uses Genesis as its lending partner, will not be able to meet customer redemptions.
\nSeveral other crypto firms, including Crypto.com and stablecoin Tether, said on Wednesday they had no exposure to Genesis.
\nGenesis is not alone in facing fallout from FTX\u2019s collapse.
\nCrypto lender BlockFi, which previously acknowledged it has significant exposure to FTX, plans to lay off workers while preparing to file for bankruptcy, the Wall Street Journal reported on Tuesday.
\nWithin the industry, some executives considered possible further ripple effects.
\n\u201cI do think there\u2019s going to be another washout of crypto, but it\u2019s going to be the less well-capitalized crypto players who got burned by not having diversification of their assets,\u201d said Jeff Howard, head of institutional sales at Hong Kong-based digital exchange OSL.
\n\u201cThe crypto ecosystem is intertwined in a way that will drive further contagion in the near term. Crypto contagion risk remains on the rise,\u201d added Joe Urban, managing director of electronic trading at prime brokerage firm Clear Street.
\nLEGAL ACTION
\nMeanwhile, US court filings showed Bankman-Fried is facing legal action in the United States from investors alleging the company\u2019s yield-bearing crypto accounts violated Florida law.
The proposed class action filed late on Tuesday in Miami alleges that FTX yield-bearing accounts were unregistered securities that were unlawfully sold in the United States.
\nThe lawsuit also seeks damages from several celebrities who helped promote FTX, including National Football League quarterback Tom Brady and tennis star Naomi Osaka.
\nRepresentatives for Bankman-Fried, Brady and Osaka did not immediately respond to requests for comment.
\nUS and Bahamian authorities were discussing the possibility of bringing Bankman-Fried to the United States for questioning, Bloomberg reported on Tuesday.
\nBut Clayton Fernander, the Commissioner of Police in the Bahamas, said on Wednesday on the sidelines of a police conclave in Nassau that police have not interviewed or met with Bankman-Fried and that Fernander has not been in communication with US authorities in relation to the matter.
\nLIQUIDATOR SPAT
\nFTX group\u2019s liquidation is proving a subject of dispute, as the exchange\u2019s Bahamas-based liquidators filed a Chapter 15 petition in a US bankruptcy court in New York late on Tuesday questioning the validity of the US bankruptcy proceedings.
The liquidators, appointed by a Bahamas judge on Nov. 10, said that because their filing came before FTX\u2019s bankruptcy filing in the United States, they were the only ones authorized to begin bankruptcy proceedings for FTX and its affiliates.
\nThe US bankruptcy proceedings involve multiple FTX group companies with more than 100,000, and possibly over 1 million, creditors. \u2014 Reuters
\n", "content_text": "Major crypto player Genesis Global Capital suspended customer redemptions in its lending business on Wednesday, citing the sudden failure of crypto exchange FTX, while court papers showed FTX founder Sam Bankman-Fried faces legal action.\nFTX filed for bankruptcy protection in the United States on Friday in the highest-profile crypto blowup to date, after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal. After a flurry of tweets and interviews by Bankman-Fried, FTX said he \u201chas no ongoing role\u201d at the company and does not speak on its behalf.\nThe implosion of FTX has rippled across the industry, hobbling liquidity at firms with exposure to what was once one of the world\u2019s biggest crypto exchanges, and prompting investigations by regulators in several countries.\nLawmakers from the US Congress said on Wednesday they were planning hearings on FTX before yearend, while the New York Department of Financial Services said it is monitoring the situation at Genesis.\nWhile not naming FTX directly, Treasury Secretary Janet Yellen said on Wednesday that more effective oversight is needed over the crypto markets to address risks previously identified that were \u201cat the center of the crypto market stresses observed over the past week,\u201d and urged Congress to act quickly.\nVenture capital firm Digital Currency Group, the ultimate parent of Genesis, as well as of crypto asset manager Grayscale, said on Twitter that Genesis\u2019 decision to suspend redemptions \u201cwas made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion.\u201d\nGenesis, which also offers crypto trading and custody services through an affiliate that are not affected, had $2.8 billion in total active loans at the end of the third quarter, according to the company\u2019s website. Last year, it extended $130.6 billion in crypto loans and traded $116.5 billion in assets, it said.\nThe suspension at Genesis \u201chas no impact on the business operations of DCG and our other wholly owned subsidiaries,\u201d the company said.\nStill, Grayscale Bitcoin Trust GBTC.PK, the world\u2019s largest bitcoin fund, plunged almost 7% on Wednesday, while the price of bitcoin fell 2.6% to $16,400 and is down around 20% this month.\nCrypto exchange Gemini, which was founded by the Winklevoss twins, said its yield-generating \u201cEarn\u201d program, which uses Genesis as its lending partner, will not be able to meet customer redemptions.\nSeveral other crypto firms, including Crypto.com and stablecoin Tether, said on Wednesday they had no exposure to Genesis.\nGenesis is not alone in facing fallout from FTX\u2019s collapse.\nCrypto lender BlockFi, which previously acknowledged it has significant exposure to FTX, plans to lay off workers while preparing to file for bankruptcy, the Wall Street Journal reported on Tuesday.\nWithin the industry, some executives considered possible further ripple effects.\n\u201cI do think there\u2019s going to be another washout of crypto, but it\u2019s going to be the less well-capitalized crypto players who got burned by not having diversification of their assets,\u201d said Jeff Howard, head of institutional sales at Hong Kong-based digital exchange OSL.\n\u201cThe crypto ecosystem is intertwined in a way that will drive further contagion in the near term. Crypto contagion risk remains on the rise,\u201d added Joe Urban, managing director of electronic trading at prime brokerage firm Clear Street.\nLEGAL ACTION\nMeanwhile, US court filings showed Bankman-Fried is facing legal action in the United States from investors alleging the company\u2019s yield-bearing crypto accounts violated Florida law.\nThe proposed class action filed late on Tuesday in Miami alleges that FTX yield-bearing accounts were unregistered securities that were unlawfully sold in the United States.\nThe lawsuit also seeks damages from several celebrities who helped promote FTX, including National Football League quarterback Tom Brady and tennis star Naomi Osaka.\nRepresentatives for Bankman-Fried, Brady and Osaka did not immediately respond to requests for comment.\nUS and Bahamian authorities were discussing the possibility of bringing Bankman-Fried to the United States for questioning, Bloomberg reported on Tuesday.\nBut Clayton Fernander, the Commissioner of Police in the Bahamas, said on Wednesday on the sidelines of a police conclave in Nassau that police have not interviewed or met with Bankman-Fried and that Fernander has not been in communication with US authorities in relation to the matter.\nLIQUIDATOR SPAT\nFTX group\u2019s liquidation is proving a subject of dispute, as the exchange\u2019s Bahamas-based liquidators filed a Chapter 15 petition in a US bankruptcy court in New York late on Tuesday questioning the validity of the US bankruptcy proceedings.\nThe liquidators, appointed by a Bahamas judge on Nov. 10, said that because their filing came before FTX\u2019s bankruptcy filing in the United States, they were the only ones authorized to begin bankruptcy proceedings for FTX and its affiliates.\nThe US bankruptcy proceedings involve multiple FTX group companies with more than 100,000, and possibly over 1 million, creditors. \u2014 Reuters", "date_published": "2022-11-17T13:34:39+08:00", "date_modified": "2022-11-17T13:34:39+08:00", "authors": [ { "name": "大象传媒", "url": "/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/fc38d2668fdee8f1e2b22df5e72ae6f4ad265ab7814de4aa60060edd377a70ce?s=512&d=mm&r=g" } ], "author": { "name": "大象传媒", "url": "/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/fc38d2668fdee8f1e2b22df5e72ae6f4ad265ab7814de4aa60060edd377a70ce?s=512&d=mm&r=g" }, "image": "/wp-content/uploads/2022/11/FTX_logo.jpg", "tags": [ "bangkrupt", "criminal investigation", "cryptocurrency", "exchange", "FTX", "World" ], "summary": "Major crypto player Genesis Global Capital suspended customer redemptions in its lending business on Wednesday, citing the sudden failure of crypto exchange FTX, while court papers showed FTX founder Sam Bankman-Fried faces legal action." }, { "id": "/?p=487611", "url": "/world/2022/11/16/487611/ftx-creditors-may-number-over-1-million-as-regulators-seek-answers/", "title": "FTX creditors may number over 1 million as regulators seek answers", "content_html": "COLLAPSED crypto exchange FTX outlined a \u201csevere liquidity crisis\u201d in US bankruptcy filings, which said the group could have more than 1 million creditors, as regulators opened probes and the crypto pain spread with the Wall Street Journal reporting BlockFi was planning layoffs and a possible bankruptcy filing.
\nFTX\u2019s late Monday filing to a US bankruptcy court said it was in contact with dozens of global regulators and had appointed five new independent directors at each of its main companies, including its sibling trading firm Alameda Research.
\nThe exchange, which had been among the world\u2019s largest, filed for bankruptcy protection on Friday in one of the highest-profile crypto blowups after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal.
\n\u201cFTX faced a severe liquidity crisis that necessitated the filing of these cases on an emergency basis last Friday,\u201d the court filing stated.
\nFTX\u2019s bankruptcy case includes more than 100,000 creditors, and this number could surpass 1 million, the filings said. The numbers were disclosed as FTX requested that multiple FTX group companies file one consolidated list of major creditors, rather than separate ones.
\nThe documents also confirmed that FTX had responded to a cyber-attack on Nov. 11, after saying on Saturday it had seen \u201cunauthorized transactions\u201d on its platform.
\nFTX engaged Alvarez & Marsal as financial adviser, and said it has been in contact with the U.S. Attorney\u2019s Office, the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and dozens of federal, state and international regulatory agencies over the past 72 hours.
\nThe fallout has so far been limited to crypto exchanges and traders, but is featuring in mainstream policy discussions too.
\nMichael Barr, the Federal Reserve\u2019s top Wall Street cop, on Tuesday said he is concerned about risks from the nonbank sector for which the US central bank and other regulators have poor visibility.
\n\u201cThat includes obviously crypto activity, but more broadly risks in parts of the financial system where we don\u2019t have good visibility, we don\u2019t have good transparency, we don\u2019t have good data. That can create risks that blow back to the financial system that we do regulate,\u201d he told the Senate Banking Committee.
\nCrypto industry peers and partners have been quick to distance themselves from FTX and tout their sound financials, though some, including US cryptocurrency broker Genesis Trading, have disclosed they are exposed to FTX, either having held tokens on the exchange or by owning FTX\u2019s native token, FTT.
\nFTT plunged around 94% last week, while bitcoin BTC=BTSP lost 22%.
\nCrypto lender BlockFi, which previously acknowledged it has significant exposure to FTX, plans to lay off workers while preparing to file for bankruptcy, the Wall Street Journal reported. The newspaper reported that BlockFi was recently working with Kenric Kattner, a bankruptcy partner at Haynes & Boone, citing people familiar with the situation. BlockFi and Kattner did not immediately respond to a request for comment.
\nSeparately, bankrupt crypto lender Voyager Digital no longer plans to sell itself to FTX, Bloomberg reported, while Canadian crypto exchange Bitvo said it terminated its deal to be bought by FTX.
\nFTX founder and former chief executive Sam Bankman-Fried said his main goal is \u201cto do right by customers,\u201d in a tweet on Tuesday.
\n\u201cI\u2019m contributing what I can to doing so. I\u2019m meeting in-person with regulators and working with the teams to do what we can for customers,\u201d he said on Twitter.
\nBloomberg reported that American and Bahamian authorities had been talking about bringing Mr. Bankman-Fried to the United States for questioning.
\nMr. Bankman-Fried tried to raise cash from investors over the weekend to repay FTX clients even after the company had sought bankruptcy protection and he had resigned as CEO, the Wall Street Journal reported.
\nMr. Bankman-Fried said he expanded his business too fast and failed to notice red flags at the exchange, in an interview with the New York Times published late on Monday.
\nREGULATORY SCRUTINY
\nThe sudden collapse of FTX, once a seen as a mainstay of the crypto industry with a $32 billion valuation as of January, has sparked investigations by financial regulators and other supervisory bodies around the world.
The Securities Commission of the Bahamas, in a statement dated Monday, said two PwC partners had been approved by the Supreme Court as joint provisional liquidators for FTX.
\nSeveral global regulators have removed licenses from local FTX units, and are looking into the company, and investigations by the U.S. Justice Department, the SEC and CFTC are also under way, a source with knowledge of the investigations told Reuters.
\nSome argued regulators should have taken action earlier.
\nKen Griffin, founder and CEO of hedge fund Citadel, told the Bloomberg New Economy Forum in Singapore: \u201cFTX is one of these absolute travesties in the history of financial markets. People will lose billions of dollars collectively and that undermines trust in all financial markets.\u201d \u2014 Reuters
\n", "content_text": "COLLAPSED crypto exchange FTX outlined a \u201csevere liquidity crisis\u201d in US bankruptcy filings, which said the group could have more than 1 million creditors, as regulators opened probes and the crypto pain spread with the Wall Street Journal reporting BlockFi was planning layoffs and a possible bankruptcy filing.\nFTX\u2019s late Monday filing to a US bankruptcy court said it was in contact with dozens of global regulators and had appointed five new independent directors at each of its main companies, including its sibling trading firm Alameda Research.\nThe exchange, which had been among the world\u2019s largest, filed for bankruptcy protection on Friday in one of the highest-profile crypto blowups after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal.\n\u201cFTX faced a severe liquidity crisis that necessitated the filing of these cases on an emergency basis last Friday,\u201d the court filing stated.\nFTX\u2019s bankruptcy case includes more than 100,000 creditors, and this number could surpass 1 million, the filings said. The numbers were disclosed as FTX requested that multiple FTX group companies file one consolidated list of major creditors, rather than separate ones.\nThe documents also confirmed that FTX had responded to a cyber-attack on Nov. 11, after saying on Saturday it had seen \u201cunauthorized transactions\u201d on its platform.\nFTX engaged Alvarez & Marsal as financial adviser, and said it has been in contact with the U.S. Attorney\u2019s Office, the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and dozens of federal, state and international regulatory agencies over the past 72 hours.\nThe fallout has so far been limited to crypto exchanges and traders, but is featuring in mainstream policy discussions too.\nMichael Barr, the Federal Reserve\u2019s top Wall Street cop, on Tuesday said he is concerned about risks from the nonbank sector for which the US central bank and other regulators have poor visibility.\n\u201cThat includes obviously crypto activity, but more broadly risks in parts of the financial system where we don\u2019t have good visibility, we don\u2019t have good transparency, we don\u2019t have good data. That can create risks that blow back to the financial system that we do regulate,\u201d he told the Senate Banking Committee.\nCrypto industry peers and partners have been quick to distance themselves from FTX and tout their sound financials, though some, including US cryptocurrency broker Genesis Trading, have disclosed they are exposed to FTX, either having held tokens on the exchange or by owning FTX\u2019s native token, FTT.\nFTT plunged around 94% last week, while bitcoin BTC=BTSP lost 22%.\nCrypto lender BlockFi, which previously acknowledged it has significant exposure to FTX, plans to lay off workers while preparing to file for bankruptcy, the Wall Street Journal reported. The newspaper reported that BlockFi was recently working with Kenric Kattner, a bankruptcy partner at Haynes & Boone, citing people familiar with the situation. BlockFi and Kattner did not immediately respond to a request for comment.\nSeparately, bankrupt crypto lender Voyager Digital no longer plans to sell itself to FTX, Bloomberg reported, while Canadian crypto exchange Bitvo said it terminated its deal to be bought by FTX.\nFTX founder and former chief executive Sam Bankman-Fried said his main goal is \u201cto do right by customers,\u201d in a tweet on Tuesday.\n\u201cI\u2019m contributing what I can to doing so. I\u2019m meeting in-person with regulators and working with the teams to do what we can for customers,\u201d he said on Twitter.\nBloomberg reported that American and Bahamian authorities had been talking about bringing Mr. Bankman-Fried to the United States for questioning.\nMr. Bankman-Fried tried to raise cash from investors over the weekend to repay FTX clients even after the company had sought bankruptcy protection and he had resigned as CEO, the Wall Street Journal reported.\nMr. Bankman-Fried said he expanded his business too fast and failed to notice red flags at the exchange, in an interview with the New York Times published late on Monday.\nREGULATORY SCRUTINY\nThe sudden collapse of FTX, once a seen as a mainstay of the crypto industry with a $32 billion valuation as of January, has sparked investigations by financial regulators and other supervisory bodies around the world.\nThe Securities Commission of the Bahamas, in a statement dated Monday, said two PwC partners had been approved by the Supreme Court as joint provisional liquidators for FTX.\nSeveral global regulators have removed licenses from local FTX units, and are looking into the company, and investigations by the U.S. Justice Department, the SEC and CFTC are also under way, a source with knowledge of the investigations told Reuters.\nSome argued regulators should have taken action earlier.\nKen Griffin, founder and CEO of hedge fund Citadel, told the Bloomberg New Economy Forum in Singapore: \u201cFTX is one of these absolute travesties in the history of financial markets. People will lose billions of dollars collectively and that undermines trust in all financial markets.\u201d \u2014 Reuters", "date_published": "2022-11-16T18:07:46+08:00", "date_modified": "2022-11-16T18:07:46+08:00", "authors": [ { "name": "大象传媒", "url": "/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/fc38d2668fdee8f1e2b22df5e72ae6f4ad265ab7814de4aa60060edd377a70ce?s=512&d=mm&r=g" } ], "author": { "name": "大象传媒", "url": "/author/cedadiantityclea/", "avatar": "https://secure.gravatar.com/avatar/fc38d2668fdee8f1e2b22df5e72ae6f4ad265ab7814de4aa60060edd377a70ce?s=512&d=mm&r=g" }, "image": "/wp-content/uploads/2022/11/FTX.jpg", "tags": [ "FTX", "World" ], "summary": "COLLAPSED crypto exchange FTX outlined a \u201csevere liquidity crisis\u201d in US bankruptcy filings, which said the group could have more than 1 million creditors, as regulators opened probes and the crypto pain spread with the Wall Street Journal reporting BlockFi was planning layoffs and a possible bankruptcy filing." } ] }