US Court Orders FTX and Alameda to Pay Fraud Victims $12.7 Billion in Historic CFTC Recovery

August 8, 2024 Bitcoin.com

UK’s Travel Rule comes into effect, could halt certain crypto transfers

September 1, 2023 Coin Telegraph

The crypto Travel Rule, which came into effect on Sept. 1, aims to stop anti-money laundering and counter-terrorist financing activities carried out on-chain.

Cryptoasset businesses in the United Kingdom could now begin withholding certain crypto transfers to comply with the new Travel Rule for crypto that came into effect on Sept. 1.

The rules targeting virtual asset service providers were first introduced by the Financial Conduct Authority on Aug. 17, and see to it that VASPs based in the U.K. will “collect, verify and share information” relating to crypto-asset transfers.

If an inbound payment is received from a person or entity from an overseas jurisdiction that hasn’t implemented the Travel Rule, the VASP must make a “risk-based assessment” as to “whether to make the cryptoassets available to the beneficiary.”

The Travel Rule is designed to bring greater transparency to cryptoasset transfers, making it harder for criminals to use #crypto for illegal activity.https://t.co/kmB6rgMn5e
— Financial Conduct Authority (@TheFCA) August 17, 2023

The same rule would also apply to Brits looking to send payments outside of the U.K.

The Travel Rule was created by the UN agency Financial Action Task Force in June 2019. The U.K. passed legislation to begin enforcing the Travel Rule in July 2022.

It attempts to prevent anti-money laundering (AML) and counter-terrorist financing (CTF) activities carried out on-chain.

Other countries that have adopted the Travel Rule include the US, Germany, Japan, Singapore, Switzerland, Canada, South Africa, the Netherlands and Estonia, according to Sygna.io.

On June 23, the FATF called out member states for failing to sufficiently implement the rule after a survey revealed more than half of them have failed to take any action towards implementing the rule.

A March 2022 survey by FATF found only 29 of 98 jurisdictions at the time passed the requirements needed as part of the travel rules and a small subset of these jurisdictions had started enforcement.

Ian Andrews, the chief marketing officer of blockchain forensics platform Chanalysis explained in April 2022 that coordinating the exchange of information between VASPs cross-borders will be a “pretty hard problem” to solve — at least at the onset.

Magazine: Deposit risk: What do crypto exchanges really do with your money?

Crypto custodian Prime Trust files for Chapter 11 bankruptcy

August 15, 2023 Coin Telegraph

Bankruptcy

The crypto custodian's bankruptcy comes as it's been unable to honor customer withdrawals for months.

Crypto custodian Prime Trust has filed for Chapter 11 Bankruptcy in Delaware after it faced a shortfall in customer funds.

The company said in an Aug.15 filing that it has between 25,000 to 50,000 creditors and estimated liabilities between $100 million to $500 million compared to $50 million to $100 million worth of estimated assets.

"The Company believes that the commencement of the Chapter 11 Cases will provide a transparent and value-maximizing process for the benefit of the Company’s clients and stakeholders," it said in an accompanying press release.

The firm's top five unsecured creditors have claims of roughly $105 million — $55 million of which is the largest unsecured claim reported by Prime Trust.

*Prime Trust's largest unsecured creditor has a claim for over $55 million. Source: Stretto*

Prime Core Technologies Inc., Prime Trust, LLC, Prime IRA LLC and Prime Digital, LLC were the entities listed as the entities filing for Chapter 11 relief.

Prime Trust's bankruptcy follows Nevada’s business regulator issuing the firm a cease and desist order on June 21 saying its financial condition was “critically deficient” and was unable to honor customer withdrawals.

Days later on June 26, Nevada's regulator petitioned a court to place the firm into receivership which the court approved on July 18.

Prime Trust agreed to the petition due to what it said was a “substantial deficit between its assets and liabilities.”

Magazine: Tornado Cash 2.0 — The race to build safe and legal coin mixers

FTX Boss Ryan Salame’s Maryland Home Searched by FBI in Unexplained Raid

April 28, 2023 Bitcoin.com

FTX Finds $7.3 Billion in Liquid Assets; Lawyers Consider Rebooting Shuttered Crypto Exchange

April 13, 2023 Bitcoin.com

Circle Partners With Cross River Bank, Handful of US ‘Crypto-Friendly’ Banks Remain; Okcoin Suspends USD Deposits

March 13, 2023 Bitcoin.com

Former FTX Director Pleads Guilty to Charges of Fraud, Money Laundering, and US Campaign Finance Violations

February 28, 2023 Bitcoin.com

Stanford Alumni Revealed as Co-Signers of FTX Co-Founder’s $250M Bond

February 16, 2023 Bitcoin.com

NYDFS Releases Guidance on Importance of Segregation and Separate Accounting for Customer Funds in Crypto Industry

January 23, 2023 Bitcoin.com

Former FTX US President lashes out at ‘insecure’ SBF in 49-part Twitter thread rant

January 15, 2023 Coin Telegraph

Bankruptcy

Harrison said Bankman-Fried threatened to fire him on the spot and would destroy his professional reputation if he continued to confront the former FTX CEO.

Former FTX US President Brett Harrison has lashed out at Sam Bankman-Fried for manipulating and threatening colleagues who proposed solutions to reorganize FTX US' management structure.

Harrison shared his experiences with Bankman-Fried and FTX US on Dec. 14, explaining how he was hired “casually over text” in Mar. 2021 after working together at New York-based trading firm Jane Street for a few years.

But six months into Harrison's tenure at FTX US, “cracks began to form” between the two, he said.

Despite recalling Bankman-Fried to be a “sensitive and intellectually curious person” at first, Harrison said he saw “total insecurity and intransigence” in Bankman-Fried when confronted with conflict, particularly when Harrison suggested FTX US establish separate branches for its executive, developer and legal teams.

16/49 I saw in that early conflict his total insecurity and intransigence when his decisions were questioned, his spitefulness, and the volatility of his temperament. I realized he wasn’t who I remembered.
— Brett Harrison (@BrettHarrison88) January 14, 2023

Harrison added that he “wasn’t sure what accounted for the dramatic change” in Bankman-Fried’s erratic behavior, though he suspected mental health issues may have been a "contributing factor."

Part of that irrational behavior Harrison describes included a series of gaslighting and manipulation tactics Bankman-Fried used against Harrison and other colleagues in their bid to clean up FTX US' corporate mess.

Harrison also recalled his last attempt to fix FTX US’ organization issues with Bankman-Fried, claiming that he threatened to “destroy my professional reputation” if a formally apology wasn’t received:

29/49 In response, I was threatened on Sam’s behalf that I would be fired and that Sam would destroy my professional reputation. I was instructed to formally retract what I’d written and to deliver an apology to Sam that had been drafted for me.
— Brett Harrison (@BrettHarrison88) January 14, 2023

Harrison said that event “solidified” his decision to leave.

As for the fraud charges now laid against Bankman-Fried and other FTX colleagues, Harrison said he was blinded by the firm’s alleged commingling and misuse of billions of dollars of customer funds:

“I never could have guessed that underlying these kinds of issues — which I’d seen at other more mature firms in my career and believed not to be fatal to business success — was multi-billion-dollar fraud.”

“If any one of us had suspected let alone learned the truth, we would have reported them immediately,” he added.

Bankman-Fried was granted bail after posting a $250 million bond guarantee and pleading not guilty to all eight criminal charges laid against him on Jan. 3.

Harrison stepped down as FTX US President on Sept. 27 — about five weeks before FTX catastrophically collapsed — where he stated that he moved into an advisory role.

customer funds

Share this video