FTX Crypto Exchange went from being worth $32 billion to filing for bankruptcy in what many are calling the “Lehman Brothers Moments“. In my previous article I compared his exploits on the Crypto Industry as that of Bernie Madoff.
The collapse of FTX has shaken up the entire crypto space. This has led to Congress and SEC investigating what transpired leading up to its filing for Chapter 11 Bankruptcy.
Timeline on FTX Collapse
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Nov 2: Coindesk publishes a concerning article about FTX and Alameda Research.
Nov 6: Binance sells FTT holdings based on the coindesk report. Binance, a rival exchange, announced it was going to sell around $530 million worth of FTT.
The assertions that FTT, the native FTX token, was Alameda Research’s principal asset were covered in length in the paper. Because FTX was utilizing FTT as collateral on its balance sheet, this raised some doubts.
As a result, there were concerns about the capital of FTX and Alameda as the assets were tied to a hazardous and volatile token. Similar to how the Ethereum network uses ether, FTT is the native coin of the FTX network.
Nov 8: Binance announced that they had reached a non-binding agreement to purchase FTX to help with the liquidity crunch.
Nov 11: The inevitable happened, and the company has to file for bankruptcy protection after a sudden collapse.
Nov 14: BlockFi suspends customer withdrawal, ever since the bankruptcy of FTX, many casualties have emerged. BlockFi was bailed out over the summer by SBF’s $400 million lifeline to stabilise the company.
Customers who put their trust in crypto behemoth FTX are now without anything. On large exchanges, are our investments really secure? Customers use these exchanges to trade their assets solely on the basis of trust. That bond is destroyed by such frauds by VCs like Alameda and SBF.
Apparently, following the turn of events SEC alleges that Sam Bankman- Fried used $100 million of customers’ money to invest in Mysten Labs— Creators of the Sui Blockchain during the investigation following ftx’s bankruptcy. So, does this have an impact on SuiNetwork?
The SEC turns a blind eye to FTX exploits in the past which led to US investors losing billions. The SEC lets politicians trade on material insider information. The SEC have continued to allow BlackRock to control the destiny of the free market and push their ESG policies on all of us.
SEC Finally Nails FTX Frauds on SBF
The SEC has officially charged Sam Bankman-Fried with defrauding FTX investors. Specifically, filing their complaint he “orchestrated a scheme to defraud equity investors in FTX Trading Ltd.” Moreover, the claims center around his misrepresentation of the platform to potential investors.
The filing states that Bankman-fried, after successfully raising more than $1.8 billion, had done so on false pretenses given to investors. The charges state that in that funding round, Bankman-Fried “promoted FTX as a safe, responsible crypto asset trading platform, specifically touting FTX’s sophisticated, automated risk measure to protect customer assets.”
Ben Armstrong wrote on Twitter. What was the number? 129 politicians received money from SBF only 11 are returning the funds. FTX was used for international money laundering from many elites world wide. Who knew Senator Warren had inside info on this.
Today I spoke with someone very connected to the inside of the FTX Scandal and how it relates to upcoming hearings.
All I can tell you from that convo is:
A) SEC is getting held accountable. Goodbye Gary.
B) There is another level to this story that NO ONE knows about publicly— Bitboy Crypto (@Bitboy_Crypto) January 18, 2023
The SECGov has recently taken enforcement actions against alleged unregistered public offerings of Nexo Protocol for lack of disclosure, while largely ignoring the risky activities of Crypto Exchanges and VC firms.