ReportWire

Tag: Regulatory Bodies

  • Canada’s Bank Supervisor to Propose Easing of Financial-Stability Rules

    OTTAWA—Canada’s banking regulator said the watchdog would issue proposals in the coming months to ease capital-buffer requirements amid the abrupt change in the geopolitical dynamics fueled by President Trump’s tariff policy.

    Peter Routledge, the head of the Office of the Superintendent of Financial Institutions, said domestic lenders “argue that the shift before us demands more intelligent risk-taking, risk-taking to help economies shift their economic model to the world emerging.”

    Copyright ©2025 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

    Paul Vieira

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  • California Implements New Cryptocurrency Laws to Combat Bitcoin ATM Scams

    California Implements New Cryptocurrency Laws to Combat Bitcoin ATM Scams

    Bitcoin (BTC) ATMs have become both convenient and worrying, with scammers taking advantage of unsuspecting victims. Authorities in the US and other jurisdictions are now waging a war against crypto-ATM-based scams.

    California takes a stance on new cryptocurrency laws

    The state of California has introduced rules for cryptocurrency transactions. Senate Bill 401, signed by Governor Gavin Newsom, means you can only make $1,000 worth of cryptocurrency transactions at ATMs each day, and starting in 2025, the maximum they can charge you is $5, or 15% of the transaction. Whichever is higher.

    Initially, some Bitcoin ATMs allowed up to $50,000 in transactions with fees ranging between 12% and 25% above the value of the digital asset. These changes are intended to protect people from scams and high fees, explained Sen. Monique Lemon, one of the co-authors.

    Scammers taking advantage of the convenience of Bitcoin ATMs have been a growing concern, with the Federal Trade Commission reporting that more than 46,000 people have lost more than $1 billion to cryptocurrency scams since 2021. New transaction limits give victims more time to spot scams before loss of money. But Charles Bell of the Blockchain Advocacy Coalition worries that these rules could hurt the cryptocurrency industry and small businesses.



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    Explore Australia’s rapid rise in the global cryptocurrency ATM scene

    FBI Alerts About Bitcoin ATM and QR Code Scams

    The Federal Bureau of Investigation (FBI) has raised the alarm about fraudulent schemes exploiting ATMs for cryptocurrencies and quick response (QR) codes for payments. These schemes take various forms, including online impersonation, romance scams, and lottery fraud, all using cryptocurrency ATMs and QR codes as tools.

    QR codes, which smartphone cameras can scan, simplify cryptocurrency payments. However, criminals are now using it to trick victims into paying money. Victims are often asked to withdraw money from their accounts and use a QR code provided by scammers to complete transactions at physical cryptocurrency ATMs.

    Once the victim makes the payment, the cryptocurrency is transferred to the scammer’s wallet, making recovery nearly impossible due to the decentralized nature of cryptocurrencies. The FBI offers several tips to protect against these schemes, focusing on caution, verification, and avoiding cryptocurrency ATM transactions that promise anonymity using only a phone number or email.



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    Bitbuy is partnering with Canada’s largest Bitcoin ATM provider

    Cryptocurrency regulation efforts in California

    The passage of Senate Bill 401 in California is part of a broader effort to regulate the cryptocurrency industry while protecting consumers. Another law, scheduled to take effect in July 2025, will require digital financial asset companies to obtain licenses from the California Department of Financial Protection and Innovation. This represents a clear shift towards tightening government regulation and oversight in the world of digital finance.

    Gavin Newsom’s decision to sign these bills into law demonstrates California’s commitment to strengthening the cryptocurrency industry and protecting its citizens. Balancing innovation and security remains a challenge, especially in a rapidly evolving digital landscape.

    Bitcoin Depot’s historic debut on the NASDAQ

    In July, Bitcoin Depot, a leading bitcoin ATM operator, went public on the Nasdaq. This milestone comes after Bitcoin Depot merged with GSR II Meteora, a blank check company.

    The move to go public demonstrates the growing legitimacy and acceptance of cryptocurrencies in major financial markets.

    Authorities vs. illegal crypto ATMs

    The UK Financial Conduct Authority (FCA) is taking a strong stance against illegal cryptocurrency ATM operators. Using its power under money laundering regulations, the Financial Conduct Authority (FCA) has carried out raids on cryptocurrency ATMs suspected of illegal activities across England.

    The measures, which follow previous operations in east London and Leeds, are part of the Financial Conduct Authority’s (FCA) efforts to crack down on unregulated cryptocurrency operations. This highlights global pressure for stronger cryptocurrency regulation, mirroring steps taken in California. The balance between innovation and security remains a fundamental concern for regulatory bodies around the world.



    Read more:

    McLennan County Bitcoin ATM Lawsuit Resolved

    Editorial Team

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  • Microsoft proposes Ubisoft license to win U.K. approval for Activision Blizzard buyout

    Microsoft proposes Ubisoft license to win U.K. approval for Activision Blizzard buyout

    Microsoft will change the terms of its Activision Blizzard buyout offer in a new effort to win approval from the U.K. competition regulator.

    The regulator, the Competition and Markets Authority, said Microsoft
    MSFT,
    +1.71%
    will now license Activision’s global cloud streaming to Ubisoft Entertainment, for any game available now or in the next 15 years. Ubisoft, in its own release, highlighted the ability to stream the popular Call of Duty franchise.

    Financial terms were not released, but the regulator said Ubisoft will make a one-off payment and also agree a market-based wholesale pricing mechanism.

    The license will be exclusive except in the European economic area. Ubisoft would have the ability to require Microsoft to provide versions of games on operating systems other than Windows, such as Linux.

    Ubisoft shares
    UBI,
    +5.80%
    jumped nearly 5% in opening Paris trade.

    The regulator now says it’s inviting comments on the structure of the new offer. “This is not a green light. We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments,” said the regulator’s CEO, Sarah Cardell.

    Microsoft last year agreed to buy Activision Blizzard for $68.7 billion, or $95 per share. Activision stock
    ATVI,
    +0.28%
    closed Monday at $90.72.

    In a blog post, Microsoft Vice Chair Brad Smith said it anticipates the CMA review processes can be completed before the 90-day extension in its acquisition agreement with Activision Blizzard expires on Oct.18. He also said the deal with Ubisoft was carefully structured not to interfere with an existing deal struck with European regulators.

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  • After Microsoft defeat, ‘toothless’ FTC needs to pick better battles if it wants to rein in Big Tech

    After Microsoft defeat, ‘toothless’ FTC needs to pick better battles if it wants to rein in Big Tech

    The U.S. Federal Trade Commission’s defeat as it sought to block Microsoft Corp.’s acquisition of videogame maker Activision Blizzard is yet another setback for an increasingly toothless regulator that needs to pick better battles with Big Tech.

    On Tuesday morning, a federal judge denied the FTC’s injunction that was seeking to block the software giant’s proposed $69 billion acquisition of Activision
    ATVI,
    +10.02%    ,
    best known for its hit videogame “Call of Duty.” The FTC argued that Microsoft
    MSFT,
    +0.19%
    could withhold “Call of Duty” and other Activision games from rival console platforms such as Sony’s PlayStation, and keep the games on its Xbox only.

    Microsoft, in a show of faith, committed in writing to keep “Call of Duty” on PlayStation on parity with Xbox for 10 years, agreed with Nintendo
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    +1.10%
    to bring “Call of Duty” to Switch and entered into several pacts to bring Activision content to several cloud gaming services, U.S. District Court Judge Jacqueline Scott Corley noted in her decision.

    “With these 10-year contracts that Microsoft made across the board with so many vendors, Nvidia
    NVDA,
    +0.53%    ,
    Nintendo and others, 10 years is a really long time, in my opinion,” said Sarah Hindlian-Bowler, an analyst at Macquarie Equity Research, in an interview Tuesday. “It is long enough to cover the arrival and maturity of the cloud gaming market….She understands  that 10 years is a very long long time to make a guarantee of this kind.”

    Also read: Regulators face an antitrust dilemma after Meta launches Threads

    Hindlian-Bowler said that she had been in the minority of Wall Street analysts in not believing the U.S. government would be able to block this deal.

    “The assumption that this somehow decreases the market is going to prove to be wildly incorrect,” she said, adding that she does not believe that the U.K.’s  Competition and Markets Authority will be able to block the deal either.

    The latest upset at the FTC was also not too surprising to other Capitol Hill watchers, especially in the light of other high-profile setbacks by the agency and its once-heralded commissioner, Lina Khan. When she was sworn in as chair of the FTC in mid-2021, Khan was hailed as the sheriff who would rein in Big Tech.

    “It’s hard to say I am surprised by the ruling because Khan has had a fairly unsuccessful track record,” said Owen Tedford, a senior research analyst at Beacon Policy Advisors. “The regulators are pushing the boundaries, deals that previously would have gone unchallenged have now gone challenged. And they are breaking precedent because Khan and company have expressed a dislike of settlements.”

    The FTC’s attempts to sue Meta Platforms Inc.
    META,
    +1.42%
    have had some defeats so far. In February, a California judge denied the FTC’s attempts to block Meta from buying a virtual-reality startup called Within Unlimited. The FTC’s suit to reverse Meta’s acquisitions of WhatsApp and Instagram, filed in 2021, is still plodding along.

    Additionally, the FTC recently filed a suit against Amazon.com Inc.
    AMZN,
    +1.30%    ,
    alleging that it is too difficult for consumers to cancel their Prime accounts, and the agency is reportedly also mulling another far-reaching suit against Amazon alleging that the e-commerce giant punishes merchants who do not use its logistics services. One analyst has already made a case that the FTC will lose that fight too.

    “I think that the FTC is in need of some change, in need of some refreshing and in need of doing a much better job of picking their battles,” said Hindlian-Bowler. “This does feel toothless, a lot of the fights they are picking are toothless. And unfortunately, they are missing the real battle. They are missing TikTok, they are missing the real fights where we actually have national security at risk.”

    In February, one of the Republican commissioners on the FTC resigned, and wrote an op-ed in the Wall Street Journal accusing Khan of disregarding the rule of law and due process.

    Compared to the European Union, which has had far more success implementing regulation to rein in Big Tech, the U.S. is still much weaker. “The EU seems to be having somewhat more success, levying big fines, getting these companies to change,” said Beacon’s Tedford. “The EU has passed these bills, but the U.S., despite these efforts, has not gotten there and is not going to get there for the next two years.”

    Money spent by Big Tech to lobby Congress in a huge part of the problem, whereas in Europe, “those lawmakers feel less beholden,” he added.

    More than a century ago, President Teddy Roosevelt, known for his “speak softly and carry a big stick” foreign policy, also used his bully pulpit to bust industrial monopolies.

    If Khan and her staff want to follow his lead and rein in Big Tech, they need to start picking their future battles more carefully — and carry bigger sticks.

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  • Amazon’s $1.7 Bln Takeover of iRobot Cleared by UK Regulator

    Amazon’s $1.7 Bln Takeover of iRobot Cleared by UK Regulator

    By Joe Hoppe

    The U.K. Competition and Markets Authority on Friday said it has cleared Amazon.com’s proposed $1.7 billion acquisition of iRobot Corp.
    

    The regulator, which had launched an initial formal investigation in April into the takeover of the Roomba maker, concluded that the deal wouldn’t lead to competition concerns in the U.K.
    

    

    The deal remains under regulatory review in other jurisdictions. In September, iRobot said the U.S. Federal Trade Commission formally requested documents from both companies explaining the deal’s purpose and rationale. A securities filing by iRobot said both companies would cooperate with the FTC’s investigation.
    

    After an investigation, which typically takes up to a year, the FTC can sue to block a merger, seek concessions such as divestitures or decline to take action, allowing a deal to close.
    

    “We’re working cooperatively with the relevant regulators in their review of the merger,” an Amazon spokesperson said at the time.
    

    Write to Joe Hoppe at joseph.hoppe@wsj.com
    

    

    


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    Why the U.K. is blocking Microsoft’s deal for Activision and what comes next
    
			
    Why the U.K. is blocking Microsoft’s deal for Activision and what comes next
    
			
    

    

    

    A U.K. regulator made the surprising decision Wednesday to block Microsoft Corp.’s deal for Activision Blizzard Inc. in a further sign of resistance to the power of Big Tech.
    

    The U.K.’s Competition and Markets Authority announced Wednesday that it would prohibit the $69 billion deal as the merger could hurt competition in the nascent market for cloud gaming. The decision comes after the agency said in late March that it no longer thought the deal would threaten console gaming, which is a vastly larger and more established…
    
    

    

    


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    ‘This is a risk confronting all banks,’ ex-FDIC chief Sheila Bair tells MarketWatch
    
			
    ‘This is a risk confronting all banks,’ ex-FDIC chief Sheila Bair tells MarketWatch
    
			
    

    

    Regional banks shouldn’t be the only source of worry for potential fallout from the Federal Reserve’s rapid pace of interest-rate hikes in the past year, said a former top banking regulator. 
    

    “I don’t see regional banks as having any particular problem,” said Sheila Bair, who ran the Federal Deposit Insurance Corp. from 2006 to 2011, in an interview with MarketWatch on Thursday. “We need to be mindful of all unmarked securities at banks — small, medium and large.”
    

    

    Bair called the hyperfocus on regional banks and interest-rate risks “counter productive” in the wake of the collapse earlier in March of Silicon Valley Bank and Signature Bank
    
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        -22.87%
    
       of New York.
    

    “This is a risk confronting all banks,” she said. “All examiners need to be on alert for how interest-rate risk is being managed. If there is a run, they will need to sell these securities. Those are the kinds of things all-size banks, and all examiners should be worried about.”
    

    A run on deposits at Silicon Valley Bank snowballed after it disclosed a $1.8 billion loss on a sudden sale of $21 billion worth of high-quality, rate-sensitive mortgage and Treasury securities. It was the biggest U.S. bank failure since Washington Mutual’s collapse in 2008.
    

    The FDIC estimated that U.S. banks had some $620 billion of unrealized losses from securities on their books as of the end of 2022, including longer-duration Treasurys and mortgage securities that have become worth less than their face value.
    

    “Unrealized losses on securities have meaningfully reduced the reported equity capital of the banking industry,” FDIC Chairman Martin Gruenberg said on March 6, in a speech at the Institute of International Bankers.
    

    Days after that gathering, Silicon Valley Bank and Signature Bank both collapsed, prompting regulators to roll out a new emergency bank funding program to help head off any liquidity strains at other U.S. lenders. Regulators also backstopped all deposits at the two failed lenders.
    

    Bair earlier this month argued that if U.S. banking authorities see systemic risks they should go to Congress and ask for a backstop against uninsured deposits, beyond the standard $250,000 cap per depositor, at a single bank. Specifically, she wants zero-interest accounts, or those used for payroll and other operational expenses, to be fully covered, as was the case for a few years in the wake of the global financial crisis to stop runs on community banks.
    

    Treasury Secretary Janet Yellen said Wednesday that blanket deposit insurance protection isn’t something her department is considering, but added that the appropriate level of protection could be debated in the future.
    

    Fed Chairman Jerome Powell on Wednesday said the U.S. banking system “is sound and resilient, with strong capital and liquidity,” after hiking rates by another 25 basis points to a range of 4.75% to 5%, up from almost zero a year ago. 
    

    See: Fed hikes interest rates again, pencils in just one more rate rise this year
    

    Bair has been calling for a pause on Fed rate hikes since December. She said that instead of raising rates by another 25 basis points on Wednesday, Fed Chair Powell should have hit pause and said the central bank needs time to assess.
    

    “If we have a financial crisis, we won’t have a soft landing,” Bair said. “We have to avoid that at all costs.”
    

    Read: Bank failures like SVB are a reminder that ‘risk-free’ assets can still wreck portfolios
    

    Stocks closed modestly higher Thursday in choppy trade, with the Dow Jones Industrial Average
    
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        +0.23%
    
       up 0.2% and S&P 500 index
    
        SPX,
    
        +0.30%
    
       advancing 0.3%, while the Nasdaq Composite Index
    
        COMP,
    
        +1.01%
    
       gained 1%.  
    

    

    


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  • 
		
		
    
			
    What are CoCos and why are Credit Suisse’s now worth zero?
    
			
    What are CoCos and why are Credit Suisse’s now worth zero?
    
			
    

    

    The Swiss regulator on Sunday announced that it was writing the value of Credit Suisse’s additional Tier 1 bonds — also called AT1 bonds, or contingent convertible bonds or CoCos — down to zero, as part of the bank’s merger with UBS.
    

    The news has spooked investors of the AT1 market, which is valued at about $275 billion. 
    

    

    For more: The $275 billion bank convertible bond market thrown into turmoil after Credit Suisse’s securities wiped out
    

    But what are Cocos and why should you care? Here’s what you need to know:
    

    CoCos, or contingent convertible capital instruments, to give them their full name, are hybrid capital instruments that are structured to absorb losses in times of stress. They were introduced after the 2008 financial crisis to help steer risk away from taxpayers and onto bondholders. 
    

    They are bonds that automatically convert into equity—shares in the bank—when a bank’s capital falls below a certain threshold.
    

    If a bank is functioning normally, investors are paid a coupon, just like any bondholder. But if things go wrong, the bank can “bail in” the CoCo investor, converting debt into shares in what would then be a troubled lender.
    

    Also read: Saudis, Qataris and Norway to see big losses on UBS deal for Credit Suisse
    

    European banks liked to issue CoCos, because they are counted as additional Tier 1 capital. They’re a way for banks to improve their capital ratios, as required under rules put in place after the crisis, without issuing more shares.
    

    U.S. banks don’t issue CoCos—they use a different type of preferred stock to boost their Tier 1 capital. But U.S. investors have been buyers of CoCos for the extra yield they have offered. That’s risky because the instruments can be converted to low-value shares, or entirely wiped out as has now happed with those issued by Credit Suisse
    
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        -55.74%
    

            CS,
    
        -52.98%    .
       
    

     CoCos are perpetual bonds, or bonds that have no set maturity date. They can be redeemed if a bank exercises an option to do so, typically after a five-year period. But regulators may block banks from redeeming them, if the cost of issuing replacement debt is much higher. And if a bank becomes highly stressed like Credit Suisse, they can simply be written off.
    

    A call for Credit Suisse bondholders is expected to take place on March 22, according to law firm Quinn Emanuel Urquhart & Sullivan, which said on Monday it is exploring potential legal actions on behalf of AT1 bondholders.
    

    The surprise for some investors on Monday is that the Swiss move has wiped out the bondholders but not the shareholders, even though bondholders typically rank above equity holders in capital structure. 
    

    Not the Credit Suisse CoCos, which were structured to allow for the Swiss regulatory move. 
    

    Under the terms of the deal with UBS, Credit Suisse shareholders will be able to exchange their shares for about 0.70 francs, which is below where the stock closed Friday, but more than the bondholders will receive. 
    

    Most of the demand for CoCos in recent years has come from private banks and retail investors, especially in Europe and Asia, along with big U.S. institutional investors who were attracted by the higher yields in the low-interest-rate environment that prevailed from the crisis until the Federal Reserve started raising interest rates last year.
    

    To be sure, the Credit Suisse CoCos were showing signs of stress last week as the bank became more embroiled in crisis. The bank’s 9.75% coupon CoCo bonds due June of 2028 were trading at an average price of 36 cents on the dollar last Wednesday, as MarketWatch’s Joy Wiltermuth reported.
    

    Now fund managers say investors are likely to avoid them, undermining their use for banks.
    

    “The UBS-CS deal might have avoided an immediate risk event, but the AT1 write down has added an uncertainty which could persist for weeks if not months,” said Mohit Kumar, chief financial economist in Europe at Jefferies.
    

    “Given the large amount of AT1s outstanding, this would also raise the prospect of losses for other investors and the ability of banks to use them as a funding source in the future,” he added.
    

    

    


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    China Regulator Says Futu, Up Fintech Violated Laws
    
			
    China Regulator Says Futu, Up Fintech Violated Laws
    
			
    

    China Regulator Says Futu, Up Fintech Violated Laws
    


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    The $26 billion rise and fall of FTX crypto king Sam Bankman-Fried
    
			
    The $26 billion rise and fall of FTX crypto king Sam Bankman-Fried
    
			
    

    Just six months ago, CEOs, celebs and world leaders like Bill Clinton and Tony Blair flocked to him, gathering at a Davos-like conference he hosted in the Bahamas where he lives as one of the most outspoken evangelists for the power of the blockchain.  
    

    

    Fast forward to Sunday and Bankman-Fried’s crypto empire came crashing down, the victim of an old-fashioned bank run that quickly exposed the weaknesses of the new finance system he had championed. 
    

    Almost overnight, Bankman-Fried’s cryptocurrency exchange, FTX, had gone from being valued at $32 billion to worthless, leaving scores of investors scrambling to get their deposits back and triggering probes in the U.S. by the Securities and Exchange Commission, the Commodities Futures Trading Commission and the Department of Justice, according to reports.
    

    On Thursday, the 30-year-old Bankman-Fried took to Twitter to level with his clients.
    

    “I fucked up, and should have done better,” he wrote.
    

    A very rapid rise
    

    It took less than five years for Bankman-Fried to build a personal fortune that was estimated at its highest point to be more than $26 billion, making him among the richest people in the world.
    

    His schlubby, boyish appearance — ill-fitting t-shirts, gym shorts and a mop of curly hair — made him look more like a college student ripping bong hits in the basement of a frat house than a finance guru, but fit nicely with the anti-establishment ethos that appealed to crypto enthusiasts.
    

    The son of law professors at Stanford University, Bankman-Fried was a wunderkind from an early age. He studied physics and mathematics at the Massachusetts Institute of Technology.
    

    After a stint as an ETF trader for Jane Street Capital, a highly respected Wall Street firm that is known for attracting genius quantitative traders, Bankman-Fried became interested in the concept of effective altruism, a philosophy that focuses on using reason and evidence to find solutions that benefit the most people possible. In 2017, he launched Alameda Research, a quantitative trading firm focused on digital currencies.
    

    Over the next year, he began building his fortune through arbitrage trading of Bitcoin
    
        BTCUSD,
    
        +11.10%
    
       between exchanges in the U.S. and Japan, where prices were often slightly higher. In 2019, Bankman-Fried launched the crypto exchange FTX.
    

    The timing was fortuitous: as the COVID-19 pandemic spread across the globe the following year, interest in cryptocurrencies among people exploded. FTX took off and brought in the big-name celebrity endorsers and partners, like professional athletes Tom Brady and Steph Curry. 
    

    Bankman-Fried soon found himself feted by some of the biggest institutions in finance, attracting investment from the biggest names on Wall Street and beyond like Softbank
    
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        -2.65%
    
       Group, Sequoia Capital, Blackrock
    
        BLK,
    
        +13.26%    .
    
       Tiger Global Management and Thoma Bravo. He even raised money from billionaire hedge fund legends Paul Tudor Jones and Israel Englander. 
    

    Soon, FTX was among the biggest players in the industry.
    

    The face of crypto
    

    Despite his ballooning wealth, Bankman-Fried maintained the appearance and lifestyle of a teenage gamer. He moved to the Bahamas, where he reportedly lived in a penthouse apartment with 10 roommates.
    

    On Zoom calls, he would often play video games while talking — his favorite game being League of Legends. Profiles of him often noted that he kept a bean bag just feet from his desk to sleep on.
    

    What set Bankman-Fried apart from other crypto tycoons, was his professed interest in working with regulators to create a more robust framework around the nascent industry and treat it more like a traditional finance network. 
    

    To that end, Bankman-Fried appeared before Congress to try to explain to skeptical U.S. lawmakers how the crypto industry worked. He also said he welcomed regulation, not always a popular position in the crypto world.
    

    “FTX believes [government agencies] could play an even more prominent role in the digital-asset ecosystem and bring greater investor protections by closing some regulatory gaps,” he said before a senate panel in February. “FTX believes that such efforts would combine the best aspects of traditional finance and digital-asset innovations.”
    

    Bankman-Fried even put his great wealth to play in politics, becoming a major campaign donor for the Democratic party. In 2020, he was one of President Joe Biden’s largest single donors and spent nearly $40 million on political campaigns this year for the midterm elections, according to campaign filings.
    

    As cryptocurrencies have experienced significant declines in prices this year, triggering the collapse of several operations, Bankman-Fried arose as a savior, buying up several failing partners as positioning himself as a kind of Robin Hood for the industry.
    

    A swift collapse
    

    For as fast a rise to the top of the world that Bankman-Fried enjoyed, the fall was just as rapid.
    

    On Sunday, Changpeng Zhao, the CEO of FTX’s competitor, Binance, and an archrival of Bankman-Fried’s, announced on Twitter that his firm, the world’s biggest cryptocurrency exchange, was liquidating its sizable holdings of FTT, the coin issued by FTX, “due to recent revelations that have come to light.”
    

    Bankman-Fried accused Zhao of spreading false rumors. But the damage was done.
    

    Binance’s move triggered a massive selloff with customers seeking to redeem some $5 billion in deposits. FTX didn’t have it and redemptions froze up.  
    

    On Tuesday, Bankman-Fried announced that FTX had reached a tentative agreement to be acquired by Binance, due to a “significant liquidity crunch.” The turmoil set off broad declines among several of the most popular cryptocurrencies and even spilled into the world of traditional finance, sending markets tumbling.
    

    The next day, the chaos increased, with reports that FTX and Bankman-Fried were under investigation by several U.S. agencies. By the end of the day, Binance said it was walking away from the deal because due diligence had revealed that “the issues are beyond our control or ability to help.” 
    

    Binance’s deal seemed like the only thing preventing FTX from potentially collapsing. “At some point I might have more to say about a particular sparring partner,” Bankman-Fried tweeted on Thursday. “For now, all I’ll say is: well played; you won.”
    

    Also on Thursday, the Wall Street Journal reported that Bankman-Fried had been using some customer deposits to fund risky bets by his Alameda Research firm, setting FTX up for collapse.
    

    With the Binance lifeline gone and with few options available, Bankman-Fried told investors he needed $8 billion or more to plug the hole in FTX’s books, according to reports. 
    

    On Twitter, Bankman-Fried said he would focus all his efforts on making sure depositors got their money back. He also tried to explain FTX’s collapse, saying “a poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users’ margin. I thought it was way lower.”
    

    Said Bankman-Fried: “My #1 priority–by far–is doing right by users,” he wrote. “Right now, we’re spending the week doing everything we can to raise liquidity. I can’t make any promises about that.”
    

    


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