The media is going crazy over the collapse of cryptocurrency exchange FTX, the Sam Bankman-Fried sidestepping and the follow-on effects in the cryptocurrency market.
There have already been several follow-on bankruptcies, including BlockFi. Some people are aghast that Sam Bankman Fried is still not in jail.
And even The Wall Street Journal (WSJ) is running multiple stories on all the various aspects of the crisis. One of the articles says that squabbles are "erupting over the world over who controls the insolvent company's cash and crypto assets."
Another article says that Sam Bankman-Fried, the former CEO of FTX, can't account for billions sent to Alemeda, the research firm owned by FTX. Meanwhile, in an interview on Friday, Dec. 2, Bankman-Fried (known as SBF) attempted to distance himself from Alemeda, even though, as the WSJ points out, "they lived together, worked together, and lost billions together."
Bloomberg reported on Sunday, Dec. 4, that SBF has agreed to testify before the House of Congress, without committing to a date. It also wrote
Meanwhile, Bitcoin, the largest cryptocurrency, is down over 19% in the last month to just over 17,000 as of mid-afternoon Sunday, Dec. 4. The price of Coinbase Global (COIN), the largest cryptocurrency exchange by market cap ($10.8 billion) is off 25% in the last 30 days.
Recently CNBC wrote a story about how Celcius did a similar thing as FTC and accessed customer funds and, despite going through bankruptcy, still has not returned its customer collateral assets.
Fortune magazine says that SBF's interview this week was a "train wreck, even by crypto standards." They said the interview at the New York Times was:
"a 45-minute display of delusion and sociopathy in which the disgraced FTX founder whined, wheedled, and did everything but acknowledge his responsibility for the financial crime of the year."
The article did credit the interviewer, Andrew Sorkin "pulled no punches about Bankman-Fried’s misdeeds. He pointed out how SBF’s decision to raid customer accounts to plug holes in his hedge fund was akin to a bank teller using customer deposits to do some speculation on the side."
The Financial Times reported yesterday, Dec. 3, that FTX gave Alemeda Research "special treatment for years" that no other trading firm was allowed on the crypto exchange. They said that SBF admitted that Alemeda was made exempt from borrowing limits applied to other FTX clients.
The FT says that the close links between Alemeda Research and FTX were the core of the reason for the collapse of FTX.
This event and the continuing drama with any fallout for SBF will likely carry over into the cryptocurrency market for a long time.
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