Crypto Biz: FTX fallsout leaves blood in its wake
Businesses that were exposed to Sam Bankman Fried’s bankrupt cryptocurrency exchange are starting to collapse. Newsletter Bitcoin (BTC), is the greatest monetary revolution in modern history. Citizens can simply buy and hold Bitcoin to protest the indentured servitude imposed by fiat economics. They’ve also initiated one of the largest wealth transfers of all times — a process that will take decades. The rise of Bitcoin has also sparked a trillion-dollar blockchain and cryptocurrency industry. This double-edged sword is both exciting and terrifying. Sam Bankman-Fried is a disgraced founder and CEO of the now-bankrupt FTX Group. This is a great example of what can go wrong when major corporations are run by pariahs. Sam Bankman-Fried or SBF, as he is often known, has “sincerely sorry” for defrauding investors, conniving auditors, and using customer funds in order to support FTX’s sister hedgefund. We have not even unraveled the political web in which SBF is caught up — one that may include Gary Gensler, United States Securities and Exchange Commission. Crypto Biz continues to unravel the implosion at FTX, the second-largest global digital asset exchange, as of 10 days ago. Sam Bankman-Fried is reportedly under surveillance in Bahamas and looking to flee Dubai. Despite denying rumors that he fled Argentina over the weekend SBF was reported to be under supervision in Bahamas along with Nishad Singh and Gary Wang, FTX executives. Cointelegraph was informed by a source familiar with the matter that it would be difficult to leave the country without supervision. Another anonymous source claimed that Caroline Ellison, Alameda Research CEO, was trying to flee to Dubai in order to avoid extradition to America. SBF lives in a $40million penthouse in the Bahamas, despite trying to portray a modest lifestyle to public. FTX fallout continues: BlockFi reportedly considering bankruptcy, SALT pauses withdrawals, deposits. The FTX crisis was both immediate, and very devastating. BlockFi, a Bitcoin lender, stopped platform activity, leading credible rumors that it was in danger of bankruptcy. BlockFi provided clients with an update on Nov. 14 stating that it had “significant exposure to FTX” and its affiliate companies. SALT, a crypto lending company, also announced this week that it would be stopping platform activity due to the FTX contagion. This includes all withdrawals and deposits being halted. Cointelegraph reported that Shawn Owen, CEO of SALT, denied claims that his company was “going bankrupt.” However, things are not looking good for SALT users right now. Salt lending goes bust. If you have money on a “lending” platform or “earning” platform, GET IT OFF. pic.twitter.com/eOIGG8yTrO– Coffeezilla (@coffeebreak_YT) November 15, 2022
Genesis Global suspends withdrawals citing “unprecedented markets turmoil” On Nov. 16, the FTX contagion reached the institutional markets. Genesis Global, a liquidity provider, announced a temporary suspension on withdrawals due to “unprecedented marketplace turmoil.” Genesis Global isn’t a household name in crypto but it does provide liquidity for Grayscale’s Bitcoin Investment Trust which currently has more than $20 billion in net assets. Genesis was able to weather the Three Arrows Capital crash earlier this year. It has since filed a $1.2 million claim against the failed hedge funds. Genesis had $175 million in funds on the FTX exchange, making it unclear if it will survive the meltdown. FTX bankruptcy freezes millions of crypto company funds. BlockFi, SALT, and Genesis Global were not the only ones left with the brunt of FTX’s bankruptcy. According to Galois Capital, a hedge fund with as much as $50 million of crypto still on FTX, Galois Capital may have as much as $50,000,000 worth of crypto. New Huo Technology, the Hong Kong crypto exchange Hbit, was unable to withdraw $18.1million of digital assets from FTX. Nestcoin, a Nigerian Web3 company, reported similar problems, but did not disclose how much money was held on SBF’s exchange. FTX reached every corner of the cryptocurrency marketplace, leaving millions exposed. In the coming weeks and months, more details will be revealed. An update was shared with our investors today about the FTX incident, and its impact on @Nestcoin. pic.twitter.com/0Mjo4SYF7R– YB (25,25) ? (@YeleBademosi, November 14, 2022
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