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Notices tagged with ftx
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@gnu2 These people sought to "invest" their #cryptocurrency in interest-bearing accounts. Now, I haven't done any crypto investing, but my impression is that there are some smart contracts that one can use without turning control over to a company in order to lend & receive interest. But seeing that the ToS / ToU language appears to be widespread, people should be *immediately* trying to redeem & withdraw their funds.
But you are correct that giving control to someone else is a mistake. (Indeed, even #FTX customers could only have lost money to the extent that they didn't immediately sweep their funds out of FTX's custody.)
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https://decrypt.co/118081/us-department-justice-investigating-mysterious-ftx-hack-report [decrypt co]
> FTX was hit with a mystery attack on November 11, shortly after it filed for Chapter 11 bankruptcy, adding a surprise twist to the saga around the exchange and its outspoken founder, Sam Bankman-Fried (SBF). The funds were then moved around to other exchanges and converted into different cryptocurrencies.
Given how much money was already being shifted from #FTX customers to #Alameda_Research, I'd suspect that most or all of this was done by insiders.
* https://nu.federati.net/url/289142 [decrypt co]
* https://decrypt.co/114205/ftx-files-chapter-11-bankruptcy-sbf-steps-down-as-ceo [decrypt co]
* https://nu.federati.net/url/289143 [www bloomberg com]
* https://decrypt.co/117695/year-of-the-hacks-biggest-exploits-and-hacks-of-2022 [decrypt co]
* https://pacer-documents.s3.amazonaws.com/33/188450/042020648197.pdf [pacer-documents s3 amazonaws com | PDF]
* https://decrypt.co/114246/rise-fall-sam-bankman-fried-ftx [decrypt co]
* https://decrypt.co/117021/grossly-inexperienced-unsophisticated-ftx-collapse [decrypt co]
> Blockchain analysts claim that about $650 million worth of cryptocurrency left the Bahamas-based digital asset exchange in the hack, making it one of the largest crypto attacks of 2022. However, FTX's bankruptcy filing notes that "at least $372 million" was stolen, suggesting some discrepancy in the accounting of the missing funds.
> Blockchain analysis firm Chainalysis confirmed to Decrypt last week that although Bahamian authorities did access FTX funds after its filing, as some news reports previously claimed, hackers indeed pilfered $650 million worth of funds at the time of the November attack.
> At the collapsed exchange's first court hearing, James Bromley—counsel to FTX's new management—said that a "substantial amount" of the exchange's assets are missing or have been stolen.
And more.
> FTX quickly collapsed last month after it became clear that the company did not have sufficient funds to back customers' assets. This was because Alameda Research, a sister company also founded by Bankman-Fried, had the ability to use FTX customer assets for its own means and without oversight, according to newly appointed FTX CEO John J. Ray III.
I was trying to figure out how Alameda could extract funds (both cryptocurrency and fiat currency) from customer accounts without anyone knowing. One article I read implied that Alameda was just able to run a negative balance on FTX that didn't show up on the accounting reports. This makes sense, because it means they didn't need to individually grab balances from each account and as long as FTX's other customers ran a net positive balance bigger than Alameda's negative balance, things could keep going.
It all collapsed because an industry publication wrote about the composition of Alameda's assets (in large part, consisting of an FTX-created token) which caused questions about the financial independence of the two organizations.
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Also: https://nu.federati.net/url/289047 [news bitcoin com]
U.S. Congressman Warren Davidson: Self-custody #cryptocurrency wallets are an antidote to #FTX style scams, because they can't steal money / #cryptocurrencies from wallets they don't control.
He's absolutely right, and that's how the exchanges are supposed to be used, but with few onramps and offramps, people tend to leave their investments in their custodial wallet (e.g., the one where the exchange controls the secret key, not the customer) where bad things can happen.
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https://nu.federati.net/url/289046 [cointelegraph com]
Former #Alameda CEO confirms they illegally borrowed billions from #FTX customer deposits without their permission.
Can we start to understand #Alameda and #FTX as finance-oriented scams and not just #cryptocurrency related businesses? Even regulated financial industries have this sort of behavior (I keep going back to Wells Fargo, but they aren't the only one).
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Report: #FTX ex-CEO #SBF intends to allow the US extradition request to proceed without opposition https://nu.federati.net/url/288968
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One of the reasons why people left money in #cryptocurrency exchanges (which violates all the precepts of using #cryptocurrencies) is because of the lack of on-ramps. If #FTX's customers maintained near-zero balances, there would have been no money to steal to prop up #Alameda_Research. That lack of on-ramps, by the way, is due to financial regulations.
Likewise, there would be no need for exchanges to provide "proof of reserves", because they'd only need to hold enough reserves to handle expected transaction volume.
As I read the financial news, I'm ever more convinced that the standard financial system's built-in racism will never be fixed. It exists at every level from regulators to Joe Banker who denies you a loan to buy a used car, and is reinforced from the top, but means of regulations and orders that often disguise their effect in high-sounding phrasing.
When I read "Bitcoin and Black America", I felt like he overstated his point, but his point--that Blacks need to get out from under the racist financial system and find a way to fund their own businesses and jobs outside of it--still stands. Even though I'm not wedded to cryptocurrencies, I believe they offer the best shot at doing this of any financial medium I've ever heard of.
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#FTX ex-CEO #SBF's goose is cooked. His best bet is to make a plea deal and go to a "club Fed" prison instead of a "tough guy" prison.
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#FTX co-CEO reported that customer funds were being transferred to sister company Alameda Research. https://nu.federati.net/url/288939 [cointelegraph com]
#crime #fraud #cryptocurrency #sbf #bahamas #sec
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https://decrypt.co/117270/binance-deliberately-caused-ftx-collapse-kevin-oleary [decrypt co]
#SBF's billionaire buddy blames #Binance for #FTX's collapse. But the news stories say that FTX customers' funds were being taken and misused ... even if Binance's actions were a "proximate cause", there would have been a time when the theft's magnitude was so great that it could no longer be covered up. In other words, the most that Binance could have done is accelerate the collapse.
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https://en.wikipedia.org/wiki/Keating_Five
Given #FTX ex-CEO #SBF's political contributions, I wonder whether we'll have another Keating Five. Is Congress willing to examine its members' actions to determine what role they may have played?
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https://www.politico.com/news/2022/12/12/ftx-founder-bankman-fried-arrested-in-the-bahamas-00073597 [www politico com] #FTX #cryptocurrency exchange ex-CEO arrested.
> Bankman-Fried’s arrest comes the night before he was scheduled to testify remotely in front of the House Financial Services Committee, which is investigating the collapse of his multibillion-dollar crypto empire. Bankman-Fried — who until early November was the toast of Washington policy circles — has faced mounting allegations that he misused FTX customer assets to prop up his investment firm Alameda Research.
> In prepared testimony for House Financial Services, the company’s new CEO John Ray III, wrote that Alameda used client funds to engage in margin trading, exposing customers to massive losses.
> "[T]he FTX Group’s collapse appears to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets,” Ray, who stepped in as the bankrupt cryptocurrency exchange’s top executive last month, wrote in prepared Congressional testimony on the exchange’s collapse.
If he was going to try to follow #Wells_Fargo's example, he needed to follow it more closely. I recently posted a link to angryretailbanker's article where they described why they didn't believe WF's top managers should be jailed. (I personally disagree about Wells Fargo management, simply because if you see the same misbehavior sprout up at the same time across the whole organization, it generally means one person or group with supervision over the entire group ordered or suggested it ... often off-the-record, so you'd have to actually investigate to find enough evidence to convict.)
#cryptocurrency #finance #crime #fraud #theft
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https://nu.federati.net/url/288878 [www angryretailbanker com]
Remember, #Wells_Fargo paid $3,000,000 in fines, but no one went to jail for their scheme to misuse depositors' funds. If you're looking for the spiritual parent of #FTX, this is it.
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#FTX fraud: This wasn't an accident. https://www.youtube.com/watch?v=FDqhM7vHR2o [www youtube com]
#cryptocurrencies #cryptocurrency
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#FTX collapse was a crime not mismanagement or a "bank run"
https://www.coindesk.com/layer2/2022/11/30/ftxs-collapse-was-a-crime-not-an-accident/ [www coindesk com]
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https://nu.federati.net/url/288704 [www cnbc com]
#FTX former CEO #SBF says he did not intend to commit fraud.
> triking a contrite tone, former FTX CEO Sam Bankman-Fried said he “didn’t do a good job” at upholding his responsibilities to regulators, customers, and investors in a hotly anticipated conversation with CNBC’s Andrew Ross Sorkin at the Dealbook Summit.
> “I didn’t ever try to commit fraud on anyone,” Bankman-Fried said. “I saw it as a thriving business and I was shocked by what happened this month.”
> Sorkin asked Bankman-Fried why FTX and Bankman-Fried even had access to customer money.
> “I wasn’t running Alameda, I didn’t know exactly what was going on, I didn’t know the size of their position,” Bankman-Fried said. “A lot of these are things I’ve learned over the last month [in the days leading up to bankruptcy.
Now, what seemed to have sunk the platform was the revelation that his #Alameda fund was heavily into FTX's own #cryptocurrency #token ... and then later learning that customers' FTX account funds had been moved into Alameda. If he'd let customers' funds alone and not drained from the exchange to support the investment fund. ( https://nu.federati.net/url/288705 [www cnbc com] )
> The quant trading firm Sam Bankman-Fried founded was able to quietly use customer funds from his exchange FTX in a way that flew under the radar of investors, employees and auditors in the process, according to a source.
> The way they did it was by using billions from FTX users without their knowledge, says the source.
> Alameda Research, the fund started by Bankman-Fried, borrowed billions in customer funds from its founder’s exchange, FTX, according to a source familiar with company operations, who asked not to be named because the details were confidential.
If he'd not allowed the misuse of customer funds, even if Alameda collapsed, FTX probably would have continued with little disruption.
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https://www.cnbc.com/2022/11/30/crypto-exchange-kraken-lays-off-1000-employees.html [www cnbc com] (link via @geniusmusing)
#Kraken, the 3rd-largest #cryptocurrency exchange, lays off 30% of its workforce, returning to the size it was late last year. Employees will receive 16 weeks of severance pay and benefits vesting will be extended. (Much better than what the Lane furniture company did.)
This could be more fallout from the failure of SBF's #FTX and associated companies, or it could be cyclical economic factors ... as cryptocurrency prices seem to rise and fall with the general economy.
!econusa
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https://www.coindesk.com/layer2/2022/11/10/the-role-regulators-played-in-the-ftx-fiasco/ [www coindesk com]
The role regulators played in the #FTX fiasco.
Makes the case that the #cryptocurrency industry needs to be regulated like other financial industries.
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Cryptocurrency exchange #FTX facing troubles as potential acquirer #Binance reviews the books.
https://nu.federati.net/url/288419 [www coindesk com]
https://www.nbcnews.com/tech/tech-news/binance-ftx-acquire-crypto-rcna56266 [www nbcnews com]
https://nu.federati.net/url/288420 [www coindesk com]
https://nu.federati.net/url/288421 [www coindesk com]
#cryptocurrency