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Tag: FTX bankruptcy

  • Colossal Buying Pressure For Bitcoin And Solana As FTX Plans $16B Distribution, Expert

    Colossal Buying Pressure For Bitcoin And Solana As FTX Plans $16B Distribution, Expert

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    In a significant development for the cryptocurrency industry, FTX, the exchange that collapsed in November 2022 under the leadership of convicted Sam Bankman-Fried, is preparing to distribute a staggering $16 billion in cash to its customers, which could lead to significant gains for Bitcoin (BTC) and Solana (SOL) prices. 

    Crypto researcher Xremlin has predicted that a considerable portion of this cash will flow back into the crypto market, serving as a catalyst for growth towards the end of the year. 

    FTX $16 Billion Cash Injection 

    In a recent social media post, Xremlin highlighted the significance of the distribution, emphasizing that it involves returning $16 billion in cash to individuals already involved in the crypto space. 

    Xremlin believes that a significant portion of this money will be reinvested in the market, specifically in purchasing various tokens, including Bitcoin and Solana, creating significant buying pressure and price growth for both cryptocurrencies.

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    The source of this massive cash injection can be traced back to FTX’s agreement with US government agencies, where assets acquired with misappropriated customer funds were sold. These assets encompassed investments in cryptocurrencies, tech companies, venture funds, and real estate. 

    Following the sale of shares in AI startup Anthropic, where FTX had previously invested $500 million, the distressed exchange found $6.4 billion in cash. It is important to note that the amount also includes assets controlled by debtors and liquidators.

    However, the distribution has faced dissatisfaction among some clients due to settling customer claims based on lower cryptocurrency prices from November 2022, when FTX filed for bankruptcy. 

    For instance, clients holding 10 Ethereum’s native token ETH in their accounts will receive approximately $12,000 in cash, significantly lower than the asset’s current worth of around $29,000 as ETH trades at $2,900. 

    Despite objections, the court has approved creditor voting on the liquidation plan, and if passed by the necessary number of votes, the plan will be implemented after final court approval.

    Buying Frenzy For Bitcoin, Ethereum, And Solana?

    Key dates to watch for further developments include August 16, 2024, which marks the deadline for FTX customers to vote on the bankruptcy wind-down payments, and October 7, 2024, when Judge John Dorsey will consider approving the FTX bankruptcy plan.

    If the current plan is approved, clients can expect payouts to begin by the end of Q3, potentially providing much-needed liquidity for token purchases. This timing coincides with the US elections, which could contribute to increased market volatility. 

    Consequently, FTX payouts could serve as an additional factor fueling a bullish trend in the crypto market as it finds itself in significant price declines.

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    Bitcoin has fallen over 21% in the past month at one end of the market, from a high of $71,000 to a current trading price of $56,400. Meanwhile, Solana surpasses BTC’s losses with a 22% drop in the same time frame, currently trading at $134.

    The 1-D chart shows that BTC’s price is trending downward. Source: BTCUSD on TradingView.com

    Furthermore, it is expected that the ongoing selling pressure from the US and German governments witnessed over the past month could continue for the rest of the year, and the cash injection from FTX to crypto investors could help mitigate the expected selling pressure.

    The researcher points out that since most affected FTX customers are retail crypto investors, a significant portion of the money is expected to flow back into cryptocurrencies. Bitcoin, Ethereum, and Solana are likely to receive the most liquidity. 

    Featured image from DALL-E, chart from TradingView.com

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    Ronaldo Marquez

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  • FTX And IRS Lock Horns Over $24 Billion Tax Bill, FTT's Key Support Wavers

    FTX And IRS Lock Horns Over $24 Billion Tax Bill, FTT's Key Support Wavers

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    In a striking turn of events, the Internal Revenue Service (IRS) in the United States has presented a staggering tax bill of $24 billion against the bankrupt cryptocurrency exchange FTX. 

    FTX Challenges IRS’s $24 Billion Tax Bill

    According to court filings and FTX’s response to the IRS’s claims, several key arguments challenge the basis of the tax bill. Firstly, FTX highlights that its operations spanned three years, never distributing dividends or earnings. 

    Secondly, the exchange’s defense attorneys claim that the company incurred substantial losses rather than generating income that could support the IRS’s “exorbitant” tax claim. 

    Thirdly, the lawyers argue that FTX is currently in liquidation and is not engaged in any ongoing business activities apart from those required for the liquidation process. 

    Finally, the company emphasizes that the recovery sought by the IRS would ultimately come at the expense of FTX’s victims, as the funds would be redirected away from their rightful recipients. 

    As the court hearing approaches, FTX asserts that proceeding with a court-supervised estimation process would demonstrate the company’s significant losses during its operational period, rendering the IRS’s claim “baseless.” 

    FTX emphasizes that any forced payment would harm the victims of the FTX fraud, many of whom are already grappling with “profound losses.”

    FTX’s administrators have managed to recover approximately $7 billion in assets, including $3.4 billion in cryptocurrencies. These figures underscore the complex financial landscape surrounding the IRS’s claim against FTX.

    As the courtroom showdown ensues, the case outcome will undoubtedly have significant implications for the future of crypto taxation and the recovery prospects of FTX’s creditors. 

    FTT’s Bullish Trend Holds Strong

    As the cryptocurrency market experiences a significant correction following a bullish surge led by Bitcoin (BTC), FTX’s native token, FTT, has seen a decline of over 5% in the past 24 hours, adding to the company’s legal concerns.

    After a three-month accumulation phase that kept FTT trading in a range between $0.9 and $1.2 from September to the beginning of November, the token witnessed an impressive surge in the last month, reaching its highest price of the year at $6.042, a level not seen since November 2022.

    FTT’s loss of support at $5.1 on the daily chart. Source: FTTUSDT on TradingView.com

    However, the token has retraced to its current price mark of $4.8, with the next support level at $4.45 in case of further downward movement.

    On a positive note, FTT is trading above key moving averages, including the 200-day and 50-day MA, which provide support and indicate the potential for further upward price action.

    Furthermore, since the beginning of November, FTT has consistently recorded higher highs and higher lows, forming an uptrend pattern. This trend has been observed three times, with the token experiencing an uptrend, followed by a pullback for a support test, and then a continuation to reach new highs.

    Assuming this trend continues and the legal developments do not have a significant impact on the price of the token, FTT may be poised for a significant rise in the coming months, given the remarkable uptrend pattern seen on the daily chart.

    Featured image from Shutterstock, chart from TradingView.com 

    Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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    Ronaldo Marquez

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  • From Crypto To Catch: Disgraced FTX Founder Turns To Trading Fish In Prison

    From Crypto To Catch: Disgraced FTX Founder Turns To Trading Fish In Prison

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    According to a report by Business Insider, Sam Bankman-Fried (SBF), co-founder and former CEO of FTX, has adapted to the economic system of New York’s Metropolitan Detention Center (MDC), where he is currently awaiting sentencing on multiple felony counts. 

    The disgraced crypto-billionaire has reportedly been bartering, using food as currency in exchange for various services within the prison.

    Former FTX CEO SBF Trades Fish For Services

    Per the report, mackerel, a fish commonly referred to as “macks” among inmates, emerged as the currency of choice in federal prisons after cigarettes were banned. The fish’s popularity stems from its stability and value within the prison economy. 

    Formerly incarcerated individuals like attorney Larry Levin have accepted mackerel as payment from fellow prisoners, using it to acquire services such as beard trims and shoe shines. 

    The demand for mackerel became so significant that suppliers, including Global Source Marketing, witnessed increased sales, according to Business Insider.

    In a prison environment where inmates lack access to traditional or digital currency, products with steady value, such as certain food items and stamps, serve as substitutes for money. 

    Mackerel and other stable commodities like tuna become a means of exchange, with their value pegged to the dollar. This economic logic allows inmates to engage in various transactions while maintaining a semblance of a barter system.

    The use of fish as a medium of exchange in federal prisons has been widespread since 2004, following the cigarette ban. 

    Sam Bankman-Fried faces sentencing on March 28, 2024, for charges that include wire fraud and conspiracy to commit money laundering, with a potential prison term of up to 110 years. Additionally, SBF is set to stand trial for separate counts related to political bribery.

     FTT Surges with Impressive Gains

    FTT, the native token of the FTX cryptocurrency exchange, has seen a remarkable surge in value in recent weeks. With substantial gains across various timeframes and an impressive market capitalization of 1.5 billion, FTT has cemented its position among the top 50 tokens in the crypto market. 

    Over the past 24 hours, FTT has experienced a significant increase of 21%, showcasing the token’s upward momentum. This short-term surge is complemented by a strong performance over the past week, with a notable rise of 26%. 

    FTT’s uptrend over the past month on the 4-hour chart. Source: FTTUSDT on TradingView.com

    However, the real standout lies in FTT’s gains over the past 14 and 30 days. Within the last two weeks, FTT has skyrocketed by an impressive 100%, while the 30-day timeframe has seen an astounding surge of 315%. 

    These gains highlight the growing demand and investor interest in FTT as rumors of a possible reboot of the exchange circulate within the crypto community.

    Featured image from Bloomberg, chart from TradingView.com 

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    Ronaldo Marquez

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  • FTX Redemption Path: Former NYSE President Paves The Way | Bitcoinist.com

    FTX Redemption Path: Former NYSE President Paves The Way | Bitcoinist.com

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    In a recent report by FOX Business, it has been revealed that a company led by former New York Stock Exchange (NYSE) President Tom Farley is among three potential suitors vying to reboot the now-bankrupt cryptocurrency exchange, FTX. 

    Bullish, the crypto exchange headed by Farley, fintech startup Figure Technologies, and crypto venture-capital firm Proof Group are competing to acquire the remnants of FTX as the auction for the collapsed exchange, founded by Sam Bankman-Fried, nears its final stages.

    FTX Rebirth On The Horizon

    Per the report, the prospective buyer of FTX may have the opportunity to restart the exchange following its planned exit from bankruptcy next year. 

    Should a new owner take control of the exchange, there is a possibility that customers could receive shares in the rebooted exchange or new tradable tokens as partial compensation for their outstanding debts.

    Approximately $9 billion of customer deposits on FTX remain unaccounted for. However, some industry observers caution that relaunching FTX may face challenges in gaining the trust of professional traders, given the exchange’s tainted history of fraud and embezzlement. 

    As a result, discussions have occurred among potential bidders regarding rebranding the revived exchange by dropping the FTX name.

    Former NYSE President’s Bullish Bid

    Bullish, backed by notable investors such as Peter Thiel’s Founders Fund and hedge-fund manager Louis Bacon, is one of the contenders interested in acquiring the crypto company. 

    Tom Farley, the former NYSE President who served from 2014 to 2018, leads Bullish. Figure Technologies, a startup co-founded by former SoFi CEO Mike Cagney, and Proof Group, part of the consortium that successfully bid for bankrupt crypto lender Celsius, are also in the running to purchase FTX.

    The sales process for the exchange does not include the exchange’s real-estate portfolio in the Bahamas or other assets. The auction winner is expected to be announced in December, with the potential for a relaunched FTX to compensate customers through equity or tradable tokens. 

    However, the challenge lies in rebuilding trust and credibility among professional traders who may harbor reservations due to FTX’s history.

    FTX, once ranked as one of the world’s largest crypto exchanges, abruptly collapsed in November 2022 after a run on customer funds. Bankman-Fried, the founder of FTX, was subsequently charged with fraud, accused of misappropriating billions of dollars of customer funds for personal investments, luxury real estate, and political donations. 

    As reported by Bitcoinist, last week, a New York federal jury convicted him on all seven counts, and he is set to be sentenced in March, facing a potential prison term of up to 115 years.

    As the crypto industry closely monitors the outcome of the exchange auction, the involvement of a former NYSE President and prominent investors underscores the significance of this potential relaunch. 

    FTT’s 2% pullback on the daily chart over the past 24 hours. Source: FTTUSDT on TradingView.com

    Featured image from Shutterstock, chart from TradingView.com 

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    Ronaldo Marquez

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  • FTX Founder Sam Bankman-Fried Admits Limited Cryptocurrency Knowledge During Fraud Trial | Bitcoinist.com

    FTX Founder Sam Bankman-Fried Admits Limited Cryptocurrency Knowledge During Fraud Trial | Bitcoinist.com

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    During the ongoing trial of Sam Bankman-Fried, co-founder of the now-defunct FTX crypto exchange, startling revelations have emerged regarding his understanding of cryptocurrency.

    FTX Co-Founder’s Shocking Testimony 

    According to live coverage of the trial by The Guardian, Bankman-Fried confessed to knowing “basically nothing” about cryptocurrency before launching FTX and its affiliated hedge fund, Alameda Research. On the stand, Bankman-Fried admitted:

    I had absolutely no idea how they worked. I just knew they were things you could trade.

    According to the report, when Bankman-Fried teamed up with co-founder Gary Wang, who testified against him in the trial, they had no idea how to attract customers. 

    As for FTX’s collapse, US Attorney Mark Cohen’s questioning suggested that there was nothing particularly wrong with the exchange’s operations or Bankman-Fried’s business decisions.

    The attorney highlighted FTX’s terms of service, finalized in early to mid-2022, which included provisions allowing a client’s balance to be used to cover others’ losses in certain situations, such as futures trading.

    Bankman-Fried also discussed FTT, the cryptocurrency created by FTX. Its role in the collapse of FTX and Alameda Research cannot be overstated. Customers rushed to withdraw funds from FTX after reports revealed that Alameda’s loans heavily relied on FTT. 

    Per the report, Bankman-Fried portrayed FTT as a beneficial token for FTX users, providing account benefits if held. He explained the concept of “buy and burn,” where FTX used a portion of its weekly earnings to buy and eliminate FTT tokens, effectively giving value to FTT holders.

    Management Mistakes Admitted

    According to The Guardian, Throughout his testimony, Bankman-Fried attempted to portray the growth of his exchanges as a result of growing pains rather than intentional wrongdoing. 

    Bankman-Fried argued that borrowing from FTX was in line with the setup of the exchange and its sister hedge fund, Alameda Research. As long as the risk was managed and assets exceeded liabilities, they did not concern themselves with how users utilized funds/

    Furthermore, Bankman-Fried acknowledged making management mistakes, admitting that the lack of a dedicated risk management team was the most significant oversight. The defense sought to present Bankman-Fried as an overwhelmed math savant, mitigating allegations of criminal intent.

    As the trial unfolds, the question of whether Bankman-Fried is a crypto criminal mastermind or an unfortunate “math nerd” remains central. 

    While Bankman-Fried denies committing fraud, he acknowledges significant oversights. Bankman-Fried’s personal history, including his time at MIT and associations with FTX co-founder Gary Wang and exchange developer Adam Yedida, has also come under scrutiny during the trial. 

    FTT’s uptrend continues on the 4-hour chart. Source: FTTUSDT on TradingView.com

    As of the time of writing, the exchange’s token FTT is trading at $1,2714, representing a 1.4% increase. This surge follows a substantial upward trend observed over the past 30 days.

    Featured image from FOX Business, chart from TradingView.com 

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    Ronaldo Marquez

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  • FTX Ramps Up Restitution Efforts, Subpoenas AI Firm CAIS Over $6.5M Investment

    FTX Ramps Up Restitution Efforts, Subpoenas AI Firm CAIS Over $6.5M Investment

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    Bankrupt crypto exchange FTX, led by newly appointed CEO John Ray III, has embarked on an intensive legal campaign to regain control and recover assets in its pursuit of financial restitution. 

    As founder Sam Bankman-Fried awaits possible conviction and faces a staggering 114 years in prison if found guilty, FTX’s asset recovery plan continues under Ray’s leadership. 

    FTX Bankruptcy Battle Escalates

    In a recent filing with the US Bankruptcy Court for the District of Delaware, FTX issued a subpoena to the artificial intelligence (AI) firm Center for AI Safety (CAIS), demanding accounting records and information regarding payments, agreements, and contracts related to the $6.5 million investment.

    The motion, filed on behalf of the debtors who sought Chapter 11 bankruptcy protection on November 11 and November 14, 2022, states that the Debtors are operating their businesses and managing their properties as debtors-in-possession under the Bankruptcy Code. 

    It also highlights the appointment of an Official Committee of Unsecured Creditors by the US Trustee. FTX’s investigations have revealed that CAIS received transfers totaling at least $6.5 million in debtors’ funds between May and September 2022. 

    As part of their ongoing efforts to understand the debtors’ financial landscape, transactions, and estate, FTX has requested CAIS to produce relevant documents and information related to payments, agreements, communications, and other pertinent details.

    Debtors Seek Answers

    According to the motion filed on October 25, despite the debtors’ attempts to engage in a cooperative dialogue and resolve the matter amicably, CAIS has rejected voluntary requests for accounting and failed to respond to formal correspondence. The filing reads: 

    The Debtors have attempted to engage in a cooperative meet and confer process to obtain information from the CAIS voluntarily. The Debtors have so far been unsuccessful. On a phone call on August 22, 2023, counsel for CAIS expressed unwillingness to make its records related to the transfers available to the Debtors. In emails between October 2-6, 2023, Debtors requested information concerning the amount of Debtor funds CAIS has spent, the amount of Debtor funds it has retained, and its financial condition. CAIS declined to provide that information. 

    The motion concludes by stating that notice of this action has been provided to relevant parties, including the US Trustee, the Committee’s counsel, the Securities and Exchange Commission, the Internal Revenue Service, the US Department of Justice, the US Attorney for the District of Delaware, and CAIS itself.

    FTX’s native token FTT is experiencing a correction after reaching a new 2023 high on the 4-hour chart. Source: FTTUSDT on TradingView.com

    FTX’s native token, FTT, is trading at $1.22, marking a return to the $1 level for the first time since November 2022. Although it has experienced a decline of over 5% in the past 24 hours, the token has exhibited noteworthy gains over the past seven days, amounting to a 17% upward trend. 

    The token’s value has diminished by more than 95% when considering the one-year timeframe.

    Featured image from Shutterstock, chart from TradingView.com 

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    Ronaldo Marquez

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  • Bankman-Fried says he will testify before US House committee

    Bankman-Fried says he will testify before US House committee

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    FTX founder Sam Bankman-Fried tweeted on Sunday that he would testify before the House Financial Services Committee after he finished “learning and reviewing” the events that led to the spectacular collapse of his cryptocurrency exchange.

    The US House Financial Services Committee plans to hold a hearing in December to investigate the collapse of FTX and expects to hear from the companies and individuals involved, including founder and CEO Bankman-Fried.

    Committee Chair Maxine Waters last week invited Bankman-Fried to participate in the panel’s hearing on Dec. 13.

    “Once I have finished learning and reviewing what happened, I would feel like it was my duty to appear before the committee and explain,” the founder and former FTX CEO wrote in a reply to Waters.

    Bankman-Fried added that he was unsure if that would happen before Dec. 13.

    He rejected suggestions of fraud in a range of interviews last week after his company’s collapse stunned investors and left creditors facing losses totaling billions of dollars.

    FTX filed for bankruptcy in November after a week in which a possible merger with rival crypto exchange Binance failed, Bankman-Fried was accused funneling customer deposits to FTX’s affiliated trading firm Alameda Research, and the exchange experienced withdrawals of about $6 billion in just 72 hours.

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  • US authorities asking FTX investors for information on firm, Sam Bankman-Fried

    US authorities asking FTX investors for information on firm, Sam Bankman-Fried

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    US authorities are asking crypto investors and trading firms who worked closely with FTX to hand over information on the company and its key figures including Sam Bankman-Fried and Caroline Ellison, Bloomberg News reported on Thursday.

    The US Attorney’s Office for the Southern District of New York recently sent out a series of requests, asking recipients to hand over information on a list of FTX employees and associates, the report said, citing people familiar with the case.

    Attorneys from the US Securities and Exchange Commission’s enforcement division also sent similar requests for information to companies that invested in or traded on FTX, the report added.

    The regulator is trying to get a better sense of what FTX representatives told investors and whether any misrepresentations were made that would violate securities laws, according to the report.

    The US Department of Justice’s bankruptcy watchdog earlier on Thursday called for an independent investigation into the collapse of crypto exchange FTX.

    FTX’s downfall will be examined in several more congressional hearings this month, with the House Financial Services Committee set to hold the first in a series of meetings on Dec. 13.

    Last month, newly-appointed FTX CEO John Ray had said in a US court filing that there was flawed regulatory oversight and a lack of corporate control of the bankrupt crypto exchange founded by Sam Bankman-Fried.

    US Attorney’s Office for SDNY, SEC, FTX, and Caroline Ellison did not immediately respond to Reuters requests for comment. Bankman-Fried could not be immediately reached.

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