On January 1st of 2022, one Bitcoin would cost you about $46,000. By November 8th, that same coin went for about $18,500. And that’s when the year’s most dramatic crypto story was just starting: the ongoing collapse of the FTX exchange, which brought yet another round of existential threats to the crypto industry as a whole.
This year has looked like death by a thousand scandals for crypto. There was the Luna / Terra crash, which wiped out billions in value practically overnight. There was Axie Infinity, the once-hot NFT game that lost $625 million in a hack and has struggled to recover. Celsius collapsed. Three Arrows Capital collapsed. Remember when NFTs were cool and people thought their JPGs were worth millions?
All this happened, of course, as the overall economy began to crash back down to earth after a pandemic-created spike in stock prices — which also dampened society’s overall tolerance for chaotic, nonsensical gambling on internet money. As the economy began to even out and our collective risk tolerance went down, crypto went for many investors from a fun plaything to a dangerous bet.
Crypto has crashed before, and as ever, the HODLers are saying there’s upside left to come. But right now, the future for cryptocurrencies of all kinds looks pretty bleak.
Here’s all our coverage from the ongoing crypto winter:
But he hasn’t promised to attend the House Financial Services Committee hearing planned for next week.
- E“I flew past the bright red flags at his company.”
I loved this chewy piece by Zeke Faux at Bloomberg about Sam Bankman-Fried, crime, and media manipulation. Faux goes into detail about what he missed, what he noticed, and what he thinks happened at FTX. Here’s a taste:
Two people with knowledge of the matter told me that Ellison, by then the sole head of Alameda, had told her side of the story to her staff amid the crisis. Ellison said that she, Bankman-Fried and his two top lieutenants—Gary Wang and Nishad Singh—had discussed the shortfall. Instead of admitting Alameda’s failure, they decided to use FTX customer funds to cover it, according to the people. If that’s true, all four executives would’ve knowingly committed fraud.
FTX’s unexpected collapse left the cryptocurrency market and its investors reeling. Here’s a timeline of how this all happened.
- RFTX-backed decentralized crypto exchange Serum declares itself “defunct.”
Update authority for its code was held by insiders at FTX, which has left developers unable to address known security risks.
Now the project is promoting a community fork called OpenBook, and says the future of its SRM token — which once had a market cap of over $1 billion but is now down to around $60 million — is “uncertain.”
The ‘contagion’ of failed crypto firms has claimed another casualty as BlockFi cites its financial entanglements with FTX.
- EMore like “valar morghulis,” right, Pete?
Peter Thiel’s Valar Ventures had a 19 percent stake in the now-bankrupt BlockFi, The Wall Street Journal reports. Another crypto bet from the venture capital firm also went bankrupt: Vauld Group. The last time I saw Thiel IRL, he was shilling Bitcoin at a Bitcoin conference.
- JSam Bankman-Fried scored $300 million during a big FTX funding push.
The now-collapsed cryptocurrency exchange FTX raised $420 million in a big funding round in October 2021, but $300 million of it went to founder Sam Bankman-Fried, according to The Wall Street Journal.
He apparently sold some of his stake in FTX to get that much, but it still meant he got a lot of money that investors probably wanted to go directly into the company.
In which the Enron guy says FTX is worse than Enron and other legal matters
- RSBF is just going to tweet through it.
Where is Sam Bankman-Fried? We know the 30-year-old former crypto boss “fucked up,” but where did FTX’s billions actually go?
We don’t know the answers to those questions, but wherever he is, he’s still tweeting, letting us know that he thought unsolicited DMs sent to a Vox reporter would remain confidential under the legal principle of the frieNDA.
- RFTX would like to make sure you know Sam Bankman-Fried doesn’t work there anymore.
With FTX’s founder and former CEO steadily tweeting away and apparently DMing with Vox reporters (despite a precarious legal status as his former firm attempts to declare bankruptcy), John Ray, the new CEO of FTX, has an important message to share.
- ESam Bankman-Fried on the FTX failure: his “single biggest fuckup” was filing for Chapter 11 bankruptcy.
Apparently Alameda took huge losses when Luna went down, and sloppy accounting prevented Bankman-Fried from realizing how bad it was. Also, his meetings with regulators were “PR.”
Genesis says an influx of withdrawal requests ‘exceeded’ the brokerage’s ‘current liquidity’ following FTX’s collapse last week.
The esports organization TSM no longer wants to be affiliated with the collapsed cryptocurrency exchange.
- EThe House Financial Services Committee is going to look into Binance’s role in FTX’s collapse.
Hey, remember yesterday, when I said Changpeng “CZ” Zhao had painted a target on his exchange, Binance, by helping topple FTX?
Well, the Republican who’s most likely to lead the House Financial Services Committee told The Block that Binance’s role in the debacle will be part of a hearing in December.
- EFTX’s “company therapist” says he really provided dating advice.
New job perk just dropped: a “career coach” who also serves as the personal therapist for a large swath of the company. From Vice:
In his telling, Lerner worked for FTX not exactly as a therapist and certainly not as a doctor, but as a coach, even as he maintained independent doctor-patient relationships with about 20 employees and prescribed medication to at least some of them.
In this capacity, Lerner said, he was focused on the well-being of the company’s employees, not only concerning himself with their careers, but their personal (and even dating) lives, at times searching out potential “dating options” for company employees in the Bahamas in order to keep them at the company without relying on in-office romance.
- EBlockFi is preparing for bankruptcy after FTX implodes.
I feel like I’ve been saying “yikes” a lot, but it is my general sentiment about this whole thing. If you’re affected by BlockFi or FTX and want to talk, I’m firstname.lastname@example.org, and I want to hear from you.
- RWho looks at FTX and sees an investment opportunity?
Sure, it might sound like a bad idea to invest in a bankrupt exchange with more accusations of fraud than anything else we’ve seen on this side of Enron, but the Wall Street Journal reports Sam Bankman-Fried is asking around anyway.
Mr. Bankman-Fried, alongside a few remaining employees, spent the past weekend calling around in search of commitments from investors to plug a shortfall of up to $8 billion in the hopes of repaying FTX’s customers, the people said.
In Mr. Bankman-Fried’s case, the funds aren’t meant to sustain a bare-bones staff, but to repay individual traders and institutional clients who have been unable to get funds out, the people said.
The CEOs for Binance and Crypto.com are suddenly emphasizing transparency, starting with some open online chats.
- ETeam SoloMid responds to FTX’s collapse.
Team SoloMid (TSM) is another organization that’s reevaluating its relationship with FTX following the exchange’s sudden collapse, stating on Twitter that it’s “consulting legal counsel to determine the best next steps.”
The esports team became officially known as TSM FTX after it struck a $210 million sponsorship deal with the company last year. The Miami Heat and the Mercedes Formula 1 team have already ended deals with the fallen firm.
Crypto.com CEO Kris Marszalek says the company mistakenly sent 320,000 in Ethereum to another cryptocurrency exchange about three weeks ago.
- ENo, FTX was not required to release Bahamian funds first.
On Friday, the bankrupt FTX said it started facilitating withdrawals for its clients in the Bahamas (where the company’s based) at the request of “Bahamian HQ’s regulation and regulators.”
But the Securities Commission of The Bahamas says that’s not the case, stating it never “directed, authorized or suggested... the prioritization of withdrawals for Bahamian clients.” Meanwhile, hundreds of millions of dollars are still missing from the exchange.
- EBlockFi cuts off credit card customers.
After pausing client withdrawals just a couple of days ago, now BlockFi is shutting off its credit card. In an email sent to customers, it says it’s suspending “purchasing privileges” on the BlockFi Rewards Visa card “in light of recent developments at BlockFi,” but didn’t elaborate any further.
The bankrupt cryptocurrency exchange moved users’ funds to cold storage after at least $473 million went missing from the platform.
- EFTX feels the heat.
The stadium will still be known as the FTX Arena when the Heat faces off against the Charlotte Hornets on Saturday (and probably for the foreseeable future) while the team looks to secure a new sponsorship deal.