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Tag: ftx collapse news

  • 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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