Sam Bankman-Fried Breaks Silence: ‘Haunted’ by FTX Collapse, Vows to Appeal and Criticizes Legal Process

April 1, 2024 Bitcoin.com

FTX loses $53K every hour on ‘bankruptcy fees’ — latest filings show

December 18, 2023 Coin Telegraph

SEC’s Gensler hints he’s open to a FTX reboot under proper leadership: Report

November 9, 2023 Coin Telegraph

Bullish

“If Tom or anybody else wanted to be in this field, I would say, ‘Do it within the law,’” SEC Chair Gary Gensler iterated.

The United States securities regulator chief has hinted he would be open to a rebooted crypto exchange FTX — as long as its new leadership stays within the bounds of the law.

SEC Chair Gary Gensler’s comments were made in response to reports that Tom Farley, a former president of the New York Stock Exchange, is now in the running to buy the bankrupt cryptocurrency exchange founded by now-convicted fraudster Sam Bankman-Fried.

“If Tom or anybody else wanted to be in this field, I would say, ‘Do it within the law,’” Gensler said in an interview at DC Fintech Week on Nov. 8, according to CNBC. He added:

“Build the trust of investors in what you’re doing and ensure that you’re doing the proper disclosures — and also that you’re not commingling all these functions, trading against your customers or using their crypto assets for your own purposes.”

Farley is the CEO of cryptocurrency exchange Bullish, which was founded in 2021.

Fintech startup Figure Technologies and cryptocurrency venture capital firm Proof Group are the other two bidders in the mix to buy FTX, according to a Nov. 8 report by the Wall Street Journal, who cited people familiar with the matter.

3 FTX bidders in the Auction are:

Bullish - Crypto exchange run by Tom Farley
Figure Technologies - fintech start up and
Proof Group - crypto venture-capital firm

Three bidders will be leading a consortium
— Sunil (FTX Creditor Champion) (@sunil_trades) November 8, 2023

The winner could restart the exchange after its planned exit from bankruptcy next year, according to the WSJ report.

Crypto still has its fair share of fraudsters, says Gensler

Meanwhile, in light of Bankman-Fried’s conviction, Gensler said the cryptocurrency industry is still rife with fraudsters and suggested more work needs to be done to keep them away from investors.

“Think about how many actors in this space are not complying right now with international sanctions and money laundering laws and are using crypto for nefarious or bad actions. He said, without naming individuals or companies. Gensler added:

“If it’s a non-compliant fraudster, why would we want them in our markets?”

Despite the SEC’s crackdown on the cryptocurrency industry, U.S. representative Tom Emmer has previously called out Gensler and the securities regulator in December for missing the FTX, Terra-LUNA, Celsius and Voyager failures which collectively wiped out billions of dollars from cryptocurrency investors.

JUST IN: US Congressman Tom Emmer says SEC Chair Gary Gensler is as ineffective as he is incompetent.

pic.twitter.com/6EDvRdOfCh
— Watcher.Guru (@WatcherGuru) November 8, 2023

Emmer went as far to suggest Gensler helped Bankman-Fried gain a “regulatory monopoly” on the cryptocurrency industry prior to FTX’s collapse, but the statement wasn’t backed by any evidence.

The SEC is currently battling out lawsuits against Binance, Coinbase and Ripple over alleged securities violations and Grayscale for its application to convert its Bitcoin Trust product into a spot Bitcoin exchange-traded fund.

Magazine: The truth behind Cuba’s Bitcoin revolution — An on-the-ground report

Google to invest another $2B in AI firm Anthropic: Report

October 28, 2023 Coin Telegraph

Anthropic

Google has already invested $500 million as part of the deal, while the outstanding $1.5 billion will be paid over time, according to the Wall Street Journal.

Google has doubled down on its artificial intelligence bets by investing another $2 billion into AI startup Anthropic, according to a new report.

Google has already invested $500 million upfront to Anthropic — a rival to ChatGPT creators OpenAI — and will pay off the remaining $1.5 billion over time, according to an Oct. 27 report by the Wall Street Journal (WSJ), which cited people familiar.

The mega-deal adds to Google’s $550 million investment into Anthropic earlier in the year.

Google Cloud also striked a multi-year deal with Anthropic a few months ago worth over $3 billion, WSJ revealed, citing a person familiar with the matter.

The news follows Amazon’s massive $4 billion investment into Anthropic late last month.

$GOOGL Agrees to Invest $2 Billion in AI Startup Anthropic - WSJ

- Google, Anthropic Deal Reflects Continued Tech Giant Push Into AI
- Google Investment Follows Amazon's $4 Billion Funding of Anthropic
- Google Previously Invested $550 Million in Anthropic
— Kaushik (@BigBullCap) October 27, 2023

Anthropic is using much of these investments to train its AI systems, such as AI assistant Claude, in hopes that the firm can achieve the next big breakthrough in the AI industry.

On the other side of the fence is OpenAI, who have received more than $13 billion in funding from Microsoft alone since 2019 and continue to build more advanced versions of its own AI chat bot, ChatGPT. The popular chat bot amassed over 100 million users within the first two months of launching in November, which caught the attention of many venture capital firms around the world looking to invest in the space.

The co-founders of Anthropic, siblings Dario and Daniela Amodei, previously worked at OpenAI but left in 2021 following disputes with OpenAI’s CEO Sam Altman over safety implications associated with building AI systems.

Prior to Google and Amazon, Anthropic was largely bankrolled by former FTX CEO Sam Bankman-Fried, who invested about $530 million in Anthropic's in April 2022 — about seven months before FTX collapsed.

Anthropic’s surge in valuation has been viewed as a positive sign for FTX creditors in hopes that they will be compensated fully from FTX’s bankruptcy case.

As SBF testifies, Google announces it's investing another $2 billion in AI company Anthropic

FTX invested $500M in Anthropic — before Google and before Amazon. The company has now raised $7 billion in the past year alone.

FTX's customer hole closer to being shored up pic.twitter.com/bCDAIlL3nK
— Zack Guzmán (@zGuz) October 27, 2023

Magazine: AI Eye: Real uses for AI in crypto, Google’s GPT-4 rival, AI edge for bad employees

FTX creditor claims heat up as bankruptcy proceedings drive forward

October 23, 2023 Coin Telegraph

Coin Telegraph

The market is warming to FTX claims, with one claim going for between 52 and 53 cents on the dollar at auction on Friday.

The market for FTX creditor claims has been heating up, with some claims now reportedly selling for more than 50 cents on the dollar, according to Thomas Braziel, partner at 117 Partners — a firm specializing in crypto bankruptcy claims.

Braziel told Cointelegraph that a claim worth more than $20 million recently sold for between 52 cents and 53 cents at auction on Oct. 20, though noted that only the best claims typically reach this price tag, adding:

“The market has really firmed up for smaller claims, with smaller claims being north of $500K to $800K and up."

“Those claims are now trading between the high-end of 30 cents and the lower end of 40 cents,” he added, reiterating that only the “cleanest” claims with the right buyer could sell at these prices.

The increased value of creditor claims appears to follow recent clawback efforts from the bankrupt crypto exchange, as well as capital-raising efforts from a company it had previously invested in.

In April 2022, Anthropic raised $580 million in a series B funding round led by Sam Bankman-Fried, the former CEO of the now-defunct FTX.

On Sept. 25, Amazon announced a $4 billion investment in Anthropic. Anthropic is looking to raise capital at a potential $30 billion valuation, making FTX’s investment in the company worth somewhere between $3.5 and $4 billion.

According to an Oct. 4 post from the FTX creditor coalition, this valuation could be enough to see FTX creditors made whole.

Anthropic to raise from Google at 20-30B valuation, putting FTX's stake at 3-4.5B.

FTX customers now stand to be made whole. pic.twitter.com/Vy9mZc8bEl
— FTX 2.0 Coalition (@AFTXcreditor) October 3, 2023

Despite the growing enthusiasm for FTX claims, Braziel added that there were still some concerns that needed to be addressed, but overall the increasing valuation of claims was a good sign for creditors.

“There’s still a lot to iron out. KYC and AML issues are still popping up.”

Braziel said that the recent Settlement and Plan Support announced by the Ad Hoc Committee of non-US FTX customers on Oct. 18 was a significant win for a number of firms who had been looking to sell their claims on the market.

A crucial element of the amended support plan is the “shortfall claim,” in which FTX debtors estimate that customers of FTX.com and FTX US would collectively receive 90% of distributable assets. The shortfall claim is estimated at approximately $8.9 billion for FTX.com and $166 million for FTX.US.

“They were kinda stuck with a bag they really couldn’t sell because it was really unclear how customer clawbacks were going be treated,” said Braziel. “For all the trading and market-making firms, the planned support agreement and the draft outline are really helpful for trading firms to be able to sell their claims.”

Since FTX first filed for Chapter 11 bankruptcy protection on Nov. 11, 2022, the FTX Debtors’ estate headed by new CEO John Ray III, has made a series of moves to regain lost assets, including the sale of FTX holdings as well as significant clawbacks from other crypto firms and former-FTX seigniorage.

Magazine: Blockchain detectives — Mt. Gox collapse saw birth of Chainalysis

Toughen up. Mt. Gox’s ex-CEO only had a ‘little calculator’ to prepare for trial

September 14, 2023 Coin Telegraph

Coin Telegraph

Mark Karpelès was seemingly drawing parallels to Sam Bankman-Fried's recent antics, claiming to have gotten through 20,000 pages of evidence in pre-trial detention with only a "simple calculator."

Mark Karpelès, the former CEO of the collapsed exchange Mt. Gox, seems to have little in the way of sympathy for former FTX CEO Sam Bankman-Fried, who’s been trying to get released from prison to prepare for his upcoming trial, citing poor internet.

“When I was arrested back in 2015, the most computing power I got was a simple calculator (+-*/√),” Karpelès wrote in a Sept. 13 post on X (formerly known as Twitter).

Karpeles was arrested on two separate occasions in 2015 for the alleged misappropriation of nearly $3 million of Mt. Gox customer funds.

When I was arrested back in 2015, the most computing power I got was a simple calculator (+-*/√). Had 20000 pages of evidence including over 5000 pages of accounting. Calculation I did at the time helped me to earn release under bail and eventually be cleared of all embezzlement…
— Mark Karpelès (@MagicalTux) September 13, 2023

Karpelès eventually earned release under bail using a trusty “little calculator” he bought from the prison commissary and was eventually cleared of all embezzlement and breach of trust charges.

“I spent a total of 11 months and 15 days in pre-trial detention, and didn't have access to any of the evidence until about 7 to 8 months in,” he said.

By using supplies he’d gotten from the jail's store, Karpelès used folders and stickers to create an index of all the evidence he’d been sent by his legal counsel, which was all squeezed into a very complex eight-page file, he said.

Karpelès said he was even initially going to brave it with an abacus — an ancient counting tool that uses sliding beads to add and subtract — which was the only item listed that could assist with calculations. Luckily, a prison guard told him that he could use a calculator for accounting cases and thus spared him the headache.

pic.twitter.com/XuNzAdBvsI
— Mark Karpelès (@MagicalTux) September 14, 2023

“I spent around $120 to buy the best calculator they had, which could do additions, subtractions, multiplications and divisions, square roots for some reason, and had buttons to add/remove consumption tax,” he explained.

Finally, four years after his initial arrest in August 2015, Karpelès was said he was cleared of all embezzlement and breach of trust charges, “all thanks to that little calculator” and “of course the tremendous work” done by his lawyers.

Karpelès’ comments come days after lawyers for Bankman-Fried filed a request to have him released from prison, claiming that his poor internet access was a significant impediment to the preparation for the upcoming trial.

District Court judge Lewis Kaplan denied the request for temporary release on Sept. 12, declaring that poor internet access wasn't sufficient grounds for release.

Bankman-Fried currently faces 12 criminal charges, which will be spread across two trials scheduled to begin on Oct. 2, 2023, and March 11, 2024. He has pleaded not guilty to all counts.

Big Questions: What’s with all the crypto deaths?

FTX wallet shifts $10M in crypto, sparking fear of token dumps to come

September 4, 2023 Coin Telegraph

FTX wallet shifts M in crypto, sparking fear of token dumps to come

Coin Telegraph

The transfer of millions in altcoins has ignited concerns of FTX creating a potential dump across the crypto markets.

A wallet owned by bankrupt crypto exchange FTX has moved $10 million worth of digital assets from the Solana (SOL) network to Ethereum, sparking concerns it could be the beginning of a series of token dumps amid the exchange’s bankruptcy proceedings.

According to data from blockchain analytics platform Arkham Intelligence, since Aug. 31, the FTX wallet has transferred $6.23 million worth of Ether (ETH) and more than $4 million in altcoins.

These included $1.2 million of FTX Token (FTT), $1.8 million worth of Uniswap (UNI), $1.3 million of HXRO (HXRO), $550,000 worth of SushiSwap (SUSHI) and $260,000 worth of Frontier Token (FRONT), to another FTX wallet by way of the Wormhole Bridge.

FTX wallets on the move

Over $1.5B worth of $SOL, SPL tokens, and Wrapped #Bitcoin in FTX's Solana addresses are shifting‼️

Looks like they're gearing up for potential sell-offs.

Keep an eye on this, especially the ~$200M in #Solana Wrapped $BTC.#crypto #bitcoin … pic.twitter.com/sRDI6hvTJD
— Pump House (@pumphouz) September 3, 2023

On Aug. 24 FTX proposed a plan to appoint Mike Novogratz’s Galaxy Digital Capital Management as the investment manager charged with overseeing the sale and management of its recovered crypto holdings.

According to the plan, the FTX estate would only be permitted to sell $100 million of the tokens per week, however, that limit could be raised to $200 million on an individual token basis. These limits are intended to minimize the impact of token sales while simultaneously allowing FTX to make creditors whole.

In addition to this plan, the exchange also filed a separate motion to hedge its larger holdings of Bitcoin (BTC) and Ether.

While the propositions set forward in the filings are not yet legally binding, the case of FTX token sales is expected to come before the Delaware Bankruptcy Court on Sept. 13.

In an April 12 hearing, FTX disclosed that it had recovered roughly $7.3 billion in liquid assets, with $4.8 billion of that sum being comprised of assets recovered as of November 2022.

According to documents raised in the hearing, FTX held a total of $4.3 billion in crypto assets available for stakeholder recovery at market prices as of April 12.

*FTX assets available for stakeholder recovery as of April 12. Source: Sullivan and Cromwell*

The current reorganization plan for FTX includes a potential reboot of the cryptocurrency exchange, with FTX CEO John Ray III saying that the company had “begun the process of soliciting interested parties to the reboot of the FTX.com exchange.”

According to FTX lawyers, the launch of the new exchange is expected to be completed sometime in the second quarter of 2024.

Magazine: How to protect your crypto in a volatile market — Bitcoin OGs and experts weigh in

SBF denies witness tampering in effort to avoid jail

August 2, 2023 Coin Telegraph

Coin Telegraph

Lawyers for Sam Bankman-Fried claim that his alleged sharing of Caroline Ellison's diary with the New York Times does not amount to witness tampering.

Lawyers for Sam Bankman-Fried have denied that he attempted to intimidate witnesses in his criminal trial by talking to New York Times reporters and argued there is no reason to jail him.

In an Aug. 1 letter to Judge Lewis Kaplan, Bankman-Fried's lawyers claimed the prosecution's attempt to revoke his bail and have him detained are "extremely thin" and heavily rely on assumptions and innuendo.

They added Bankman-Fried's contact with a New York Times reporter was not an attempt to intimidate former Alameda Research CEO Caroline Ellison or taint the jury pool and it was not enough to justify his detainment ahead of the trial.

Bankman-Fried's contact with reporters was a "proper exercise of his rights to make fair comment on an article already in progress, for which the reporter already had alternate sources," the lawyers argued.

On July 28, the United States Department of Justice (DOJ) sought to revoke Bankman-Fried's bail alleging his move to share Ellison’s diary with The New York Times was an attempt to harass and intimidate her. Ellison is expected to testify against SBF in his criminal trial which is scheduled to take place in October this year.

Bankman-Fried's lawyers instead suggested that it was the government who shared Ellison's diary with the New York Times saying it was implausible the government had nothing to do with the article.

"The language of the story itself, which discusses when the Government will begin preparing its trial witnesses and describes documents that were not provided to the reporter by Mr. Bankman-Fried, strongly indicates it was a source," the lawyers said.

This is a developing story, and further information will be added as it becomes available.

FTX creditors unimpressed with exchange’s bankruptcy exit plan

August 2, 2023 Coin Telegraph

Coin Telegraph

FTX’s official creditor committee said the current plan would add costs and delays to what’s already on track to be a historically expensive bankruptcy.

A body representing FTX customers said it is “extremely disappointed” by the exchange’s draft bankruptcy exit plan and claims it was ignored by FTX’s restructuring team.

In a July 31 court filing, FTX’s Official Committee of Unsecured Creditors (UCC) said despite its repeated requests and previous promises from the team, it “did not have a single call or meeting” with FTX to discuss its draft Chapter 11 plan.

The plan outlines and categorizes customer claims into classes and creates a path forward for FTX to re-launch as an offshore exchange. The UCC warned it would put forward its own plan for FTX customers to vote on if it continued to be ignored.

*Excerpt of the UCC's filing claiming FTX's restructuring team did not properly consult it. Source: Kroll*

The UCC took issue with what it considered to be a late filing of the plan that created "the appearance of progress.” It explained the plan was one-sided and largely ignored suggestions the UCC raised during discussions.

“Put simply, the Debtors chose to publicly file their ideas for a plan.”

Another concern was the plan does not appoint someone with relevant crypto experience to run a potentially-rebooted FTX.

The plan should also create a regulatory-compliant recovery token and allocate value to customers most affected by FTX’s collapse in order to gain support from the “millions of customers and creditors whose votes are necessary to confirm a plan,” it said.

Additionally, the UCC claimed the current plan will cause more costs and delays. Ultimately, it asserted that it would have no choice but to put forward its own plan “for which customers and creditors will actually vote in favor.”

It was, however, appreciative that the restructuring team signaled a willingness to amend the plan to include the UCC’s recommendations, saying that negotiations will start “very soon.”

The Debtors filed a template for a plan of reorganization last night. Business level negotiations between the Committee and the Debtors over the terms of the plan have not happened yet, but will start very soon.
— Official Committee of Unsecured Creditors of FTX (@FTX_Committee) August 1, 2023

“This will take willingness on the part of the Debtors to listen and engage and not attempt to substitute their judgment for that of the parties who truly know and understand the cryptocurrency markets,” it added.

Magazine: Whatever happened to EOS? Community shoots for unlikely comeback

FTX reboot on the way: CEO holds talks with ‘interested parties’ — Report

June 29, 2023 Coin Telegraph

Coin Telegraph

FTX is inching closer to a potential reboot, with CEO John Ray reportedly opening up the floor to bidders looking to finance the new venture.

Bankrupt crypto exchange FTX is one step closer to relaunching as an entirely new exchange.

According to a June 28 report from the Wall Street Journal, FTX restructuring chief John Ray said the company had “begun the process of soliciting interested parties to the reboot of the FTX.com exchange.”

Sources familiar with the matter said the firm has been holding talks with investors around financing the potential reboot. Blockchain lending company Figure is among the parties who have displayed interest in the process.

Cointelegraph reached out to Figure but did not receive an immediate response.

Potential bidders reportedly have until the end of the week to lodge Letters of Intent — a document that outlines the terms and conditions of their participation.

Notably, the sources said that current FTX creditors would potentially be offered a stake in the reorganized crypto exchange, among other forms of compensation.

Importantly, "talks include possible compensation for certain existing customers, possibly by offering them stakes in any reorganized entity".

We expect customers to get recovery and/or equity tokens in FTX 2.0.
— FTX 2.0 Coalition (@AFTXcreditor) June 28, 2023

It’s expected that FTX will not be re-named “FTX 2.0” or any other derivative of its original name and will instead choose to rebrand as an entity with a different namesake.

Overall, it appears as though Ray and the rest of the team at FTX see a reboot as the best possible way of ensuring that creditors achieve the best outcome in terms of being repaid.

FTX’s legal team said in April they expect the launch of the new exchange to be completed sometime in the second quarter of 2024.

According to a June 26 report on the recovery process, FTX still has a near $2 billion hole in its books. The efforts to reclaim these missing funds have been further complicated by the alleged misuse of customer assets by key leadership at FTX.

Daniel Friedberg, a former regulatory officer at FTX who is understood to have appeared as an unnamed party in many of the legal proceedings, was sued by FTX on June 27 for allegedly paying “hush money” to silence potential whistleblowers as well as approving a series of fraudulent transfers and loans.

The report on the missing funds also detailed a series of alleged investments in venture capital firms, a $243 million Bahamian real estate portfolio as well as numerous donations to non-profit organizations.

Magazine: Bitcoin is on a collision course with ‘Net Zero’ promises

FTX Bankruptcy