FTX, froze withdrawals due to a lack of collateral in processing transactions on the Exchange in November. What was one of the titans of the Cryptocurrency Industry less than a month before the fall, seemingly overnight turned into a headline for one of the largest cases of fraud and financial mismanagement in over a decade.
Sam Bankman-Fried will go down in Crypto history as a fraud larger than Bernie Madoff. How do we explain FTX’s over $10B in losses, Where did the $2B in venture funds go?
SBF, donating $40m to not go to jail for stealing $10b+ is one of the highest ROI trades of all time, Elon Musk stated on Twitter that the donations could be over $1B distributed among the Dems. The money went somewhere, so where did it go.
Interestingly, Beto O’Rourke has returned Funds Sam Bankman-Fried “donated” to him. Time for all the other politicians who received FTX customer money to do the same thing.
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FTX, is a gift for Alameda Research. FTX is gathering and attracting tons of uninformed retail order flow for Alameda to monetize by trading against, similar to PFOF. In retrospect, Alameda Research is a gift for FTX. Alameda offers valuable liquidity to customers. Otherwise, the exchange would have no volume.
Alameda Research, could make a market with limited competition against uninformed retail order flow. Alameda would simply take the other side of random buy and sell orders and make money.
Imagine, Alameda Research is the House. The house has a slight ‘edge’ – a slight positive expectancy. Over time, the skillful poker players start to show up. Jump, Wintermute, and smaller shops.
Will Clemente tweeted, SBF is already on record admitting to mistakes and negligence that were his own fault. He’s not walking away as a free man. Sam Bankman-Fried masterminded and how the mainstream media and politicians are enabling the strategic behavior we are witnessing.
It’s very clear, @SBF_FTX is hand selecting interviews with people who have little knowledge of how margin exchanges work so that he can carefully craft a narrative of “criminal negligence” instead of fraud. It’s disgusting.
— Will Clemente (@WClementeIII) December 3, 2022
On Coffeezilla’s Podcast;
The entirety of SBF’s defense is built around avoiding his own terms of service which says FTX can’t loan out funds of ordinary users. (margin trading is different!) SBF claims here they treated these accounts differently (not true). I asked Sam if they treated client assets responsibly, where is the money?
SBF, said he thought some of it was lost in the Alameda Research wire transfers before they had a bank. I told him to ignore that. What about everyone else. He said some of the assets might still be at FTX.
Read Coffeebreak’s Twitter Thread on The EXACT moment SBF admitted to fraud.
The EXACT moment SBF admitted to fraud. a ??
— Coffeezilla (@coffeebreak_YT) December 8, 2022
No serious CEO in their right minds would allow a token like SRM, which had a market capitalization value of $200MM based on the marked to market value of the circulating supply of the tokens, would have allowed that same token to be used as nearly $5B of collateral on the exchange.
This implies that a large portion of that “less liquid” collateral that Alameda was using was locked. SRM also only had an average daily volume of <$20M. FTT wasn’t much better – though it was propped up by the weekly “buy and burns” funded from a % of exchange fees.
Binance US to Acquire Bankrupt Voyager’s Assets for $1 Billion
Meanwhile, Binance’s American entity Binance.US has emerged as “the highest and best bid” for bankrupt Voyager’s assets. The total sum is roughly $1.022 billion, which includes the latter firm’s crypto portfolio (valued at an estimated $1.002 billion) and “additional consideration equal to $20 million in incremental value,” read the announcement.
Voyager Digital Ltd. (“Voyager” or the “Company”) (OTC Pink VYGVQ; FRA: UCD2) announced today that its operating company Voyager Digital LLC selected U.S. exchange BAM Trading Services Inc. (doing business as “Binance.US”) as the highest and best bid for its assets after a review of strategic options with the core objective of maximizing the value returned to customers and other creditors on an expedited timeframe.
Binance.US is headquartered in Palo Alto, CA, and is incorporated in Delaware. It is an independent legal entity and has a licensing agreement with Binance.com.
The Binance.US bid, which sets a clear path forward for Voyager customer funds to be unlocked as soon as possible, is valued at approximately $1.022 billion and is comprised of (i) the fair market value of Voyager’s cryptocurrency portfolio at a to-be-determined date in the future, which at current market prices is estimated to be $1.002 billion, plus (ii) additional consideration equal to $20 million of incremental value. The Company’s claims against Three Arrows Capital remain with the bankruptcy estate, and any future recovery on these and other non-released claims will be distributed to the estate’s creditors.
The Binance.US bid aims to return crypto to customers in kind, in accordance with court-approved disbursements and platform capabilities.
Binance.US will make a $10 million good faith deposit and will reimburse Voyager for certain expenses up to a maximum of $15 million. Should the deal not close by April 18, 2023 subject to a one-month extension, the agreement allows Voyager to immediately move to return value to customers.
Voyager Digital LLC will seek Bankruptcy Court approval to enter into the asset purchase agreement between Voyager Digital LLC and Binance.US at a hearing on January 5, 2023. The sale to Binance.US will be consummated pursuant to a Chapter 11 plan, which will be subject to a creditor vote and is subject to other customary closing conditions. Binance.US and the Company will work to close the transaction promptly following approval of the chapter 11 plan by the Bankruptcy Court.
This sale agreement follows Voyager’s July 5, 2022 entrance into a voluntary restructuring process aimed at returning maximum value to customers. Additional information about the timeline and customer access to crypto will be shared as it becomes available. A copy of the asset purchase agreement and other pleadings filed in this case may be obtained free of charge by visiting the Voyager case website https://cases.stretto.com/Voyager.