NFT Updates

🇧🇸 BAHAMAS POLICE HAVE ARRESTED FORMER FTX CEO SAM BAKMAN-FRIED

Hours ago, Bahamas police arrested former FTX Ceo, the country's attorney general said on Monday, adding that The Bahamas has received formal notification from the United States of criminal charges against him.

A spokesman for the U.S. Attorney's office in Manhattan confirmed Bankman-Fried had been arrested in The Bahamas but declined to comment on what the charges were.

"As a result of the notification received and the material provided therewith, it was deemed appropriate for the Attorney General to seek SBF's arrest and hold him in custody pursuant to our nation’s Extradition Act," the office of The Bahamas Attorney General Ryan Pinder said.

A lawyer for Bankman-Fried could not immediately be reached for comment.

: Gwyneth Paltrow, Justin Bieber, Serena Williams and Jimmy Fallon are among the A-listers facing a class action lawsuit for promoting Bored Ape Yacht Club . 🥸

©️ Coinmarketcap

BINANCE SUSPENDS TRADER’S ACCOUNT AFTER COMPLAINTS ON TWITTER 🐤

Binance CEO Changpeng Zhao said the firm doesn’t want to service “unreasonable” clients.

Crypto exchange Binance closed a trader account on Dec. 9 after a user complained about the exchange’s response for alleged funds theft. Binance CEO Changpeng “CZ” Zhao said the firm does not want to service “unreasonable” clients.

A user by the name of CoinMamba on Twitter started complaining about the lost funds on Dec. 8, claiming that a leaked API key tied to crypto trading firm 3Commas was used “to make trades on low cap coins to push up the price to make profit.”

The trader claims in a series of tweets that Binance was unable to provide him with appropriate support

As the user continued to complain on the social media platform, CZ admitted in another tweet to be considering putting the user’s account “in off boarding (withdrawal only) mode,” claiming “we don’t want to service people who are unreasonable.” The tweet was later deleted but is still available as a screenshot in the thread. The user’s account was then closed, with three days to withdraw funds.

According to the user tweets, 3Commas denied any exploit on its protocols and databases and, therefore, had no responsibility for the stolen API keys. “On the basis of the information we have today, we have found that no encryption protocols have been found to be compromised and no breaches of 3Commas’ account security databases have occurred,” stated 3Commas support.

Other Twitter users also raised the issue of the alleged API hacker, requesting Binance to halt withdrawals and investigate the incident.

On Nov. 13, Binance CEO confirmed that at least three users faced unexpected transactions on their accounts after sharing their API Key with third-party platforms Skyrex and 3Commas. He then recommended users to delete related API keys.

Coinmamba claims to have been a Binance client for over five years, and he still has futures positions open on the platform.

©️ Cointelegraph (Author: Ana Paula Pereira)

CZ AND SBF DUKE IT OUT ON TWITTER OVER FAILED FTX/BINANCE DEAL ❌

The former FTX CEO claimed that Binance “threatened to walk at the last minute” without an additional $75 million, accusing CZ of lying about his role in the deal.

Binance CEO Changpeng “CZ” Zhao and former FTX CEO Sam Bankman-Fried (SBF) have revealed new details about the failed agreement between the exchanges during FTX’s liquidity crisis in November.

In a Dec. 9 Twitter thread, CZ referred to Bankman-Fried as a “fraudster,” saying Binance exited its position in FTX in July 2021 after becoming “increasingly uncomfortable with Alameda/SBF.” According to the Binance CEO, SBF was “unhinged” at the exchange pulling out — a claim that prompted an online response from the former FTX CEO.

Bankman-Fried criticized CZ for his public admonition of FTX, adding details about the negotiations between the exchanges amid FTX’s reported “liquidity crunch” in November prior to the firm filing for bankruptcy. SBF said at the time that FTX had reached a “strategic transaction” with CZ, but Binance later pulled out after reviewing the exchange’s balance sheets. The former FTX CEO claimed that Binance “threatened to walk at the last minute” without an additional $75 million, accusing CZ of lying about his role in the deal.

“You didn't even have the rights to pull out as an investor unless we chose to buy you out--much of the tokens/equity were still locked,” said SBF, addressing CZ.

CZ responded in kind:

“Sam, not that it matters now. You also can’t force us to sell if we don’t want to. Also, we have the veto right to block any further fundraising you were doing. Never used or mentioned it. It was never a competition or fight. No one won [...] Don’t try to tell your friends to focus on us. Focus on yourself. You should have learned that by now.”

Lawmakers with the United States House Finance Services Committee previously called on Bankman-Fried to speak at a hearing exploring the collapse of FTX. Though SBF initially said he planned to wait to testify until he had “finished learning and reviewing what happened,” committee leadership threatened a subpoena, prompting the former FTX CEO to say on Twitter he would be “willing to testify” on Dec. 13.

Though Bankman-Fried has seemingly been attempting to delay appearances with officials regarding the events leading to FTX’s downfall, he has not been shy about interviews with various media outlets. Since FTX Group’s Chapter 11 filing on Nov. 11, SBF has repeatedly publicly apologized for his role in the exchange’s collapse.

©️ Cointelegraph (Author: Turner Wright)

FTX INVESTORS' CLAIMS TO BE INVESTIGATED FOR SECURITIES LAWS VIOLATIONS 🕵️‍♀️

To help the investors legally recoup losses, Schall Law Firm plans to investigate FTX for issuing misleading statements or failing to disclose crucial information.

To help out the recently duped investors of FTX Tokens, shareholder rights litigation firm — Schall Law Firm — has taken up the task of investigating the investors’ claims against FTX for violations of the securities laws.

It is estimated that over one million people have lost their life savings owing to the financial fraud committed by FTX CEO Sam Bankman-Fried. To help the investors legally recoup losses, the law firm plans to investigate FTX for issuing misleading statements or failing to disclose crucial information.

In an official statement, Schall Law Firm highlighted how various media publications uncovered the cracks within FTX-Alameda operations, eventually leading to the crash of FTX’s in-house FTT tokens.

The law firm advised all FTT investors to participate in the drive by sharing information linked to their purchase and sale of FTT tokens. Investors need to know that unless the class gets certified — wherein the court determines that a class action is the best option to manage the multiple claims — they are not represented by an attorney.

Moreover, crypto entrepreneurs, including Tether executives and Binance CEO Changpeng ‘CZ’ Zhao, believe that SBF was proactively trying to destabilize the crypto market to save FTX.

FTX recently hired a team of financial forensic investigators to track down the investors’ lost money. The firm’s primary goal is to conduct “asset-tracing” to identify and recover the missing digital assets.

On Nov. 22, a lawyer — James Bromley, a partner at law firm Sullivan & Cromwell — representing FTX debtors stated that “a substantial amount of assets have either been stolen or are missing” from FTX. Moreover, he revealed that blockchain analytics firms such as Chainalysis had been enlisted to help as part of the proceedings.

©️ Cointelegraph (Author: Arijit Sarkar)

SAM BANKMAN-FRIED’S PARENTS NO LONGER ON THE STANFORD LAW SCHOOL ROSTER 👨‍⚖️

Joseph Bankman and Barbara Fried have started facing professional consequences for their child Sam Bankman-Fried's illegal actions.

The domino effect of FTX CEO Sam Bankman-Fried’s actions came full circle as his reputation began impacting the professional lives of his parents — Stanford Law professors Joseph Bankman and Barbara Fried.

SBF’s father, Bankman, had to cancel his winter session course on tax policy, which according to The Standford Daily, was at a time when the family was accused of acquiring an FTX-owned $16.4 million vacation home before the crypto exchange’s collapse.

On the other hand, SBF’s mother, Fried, was surprisingly not even listed as an instructor for any of the courses. While this event coincides with FTX’s fallout, where Fried became a focal point of discussion owing to her political ties, she distanced the move from the ongoing investigations, saying it was a “long-planned” decision to retire. Speaking to The Daily, Fried shared her “hopes to” return as a teacher in the future.

As if karma was real, SBF’s plan to dupe FTX investors came back to haunt his family members. However, Bankman-Fried continues to attempt to destabilize the crypto market. Most recently, SBF accused Binance CEO Changpeng Zhao of FTX’s fall, claiming that CZ “threatened to walk at the last minute.”

On Dec. 9, Bankman-Fried revealed his willingness to testify at a United States House hearing about FTX’s collapse in the future.

However, the fugitive controversially missed the deadline to respond to a Senate Banking Committee request to appear and testify during a hearing focused on FTX’s bankruptcy in early December.

©️ Cointelegraph (Author: Arijit Sarkar)

ABNORMAL TOKEN PRICE MOVEMENTS ON BINANCE NOT HACK-RELATED, CONFIRMS CZ 📈📉

On Dec. 11, Binance issued a notice about abnormal price movements for some trading pairs. As a result, the exchange began an investigation to narrow down suspicious accounts responsible for the issue.

Crypto exchange Binance began investigating suspicious behavior on its platform after noticing abnormal price movements for certain trading pairs involving Sun Token (SUN), Ardor (ARDR), Osmosis (OSMO), FUNToken (FUN) and Golem (GLM) tokens. Nearly 40 minutes into the investigation, Binance CEO Changpeng ‘CZ’ Zhao revealed that the price movements “appears to be just market behavior.”

On Dec. 11 at 3:10 am ET, Binance issued a notice about abnormal price movements for some trading pairs. The exchange began an investigation to narrow down suspicious accounts responsible for the issue. To investors’ relief, Binance’s investigation did not point to the possibility of compromised accounts or stolen API keys.

In CZ’s words:
“One guy deposited funds and started buying. (Hackers don’t deposit). Other guys followed. Can’t see linkage between the accounts.”

However, the exchange took a proactive measure against possible manipulation. It temporarily blocked withdrawals for some accounts that made profits during the volatility, which according to CZ, sprouted complaints across social media.
CZ further addressed the concerns related to centralization and company intervention during similar occasions as he stated, “There is a balance to how much we should intervene.”

When asked about the possibility of using stolen or compromised accounts for carrying out manipulative trades, CZ clarified that Binance actively monitors such accounts, adding that:

“If you leave your account details with a 3rd party platform that gets hacked, and the hacker is cautious in using it, it can be hard to detect on our side. But we try.”

Binance has confirmed to keep investors updated as soon as ongoing investigations reveal new information about the ongoing price movements.

The ill-intent of FTX CEO Sam Bankman-Fried set back the crypto industry by a few years, said CZ during Indonesia Fintech Summit 2022.

“I think basically we've been set back a few years now. Regulators rightfully will scrutinize this industry much, much harder, which is probably a good thing, to be honest,” CZ added, emphasizing that the episode was devastating for the industry.

©️ Cointelegraph (Author: Arijit Sarkar)

FALCONX SAYS EXPOSURE TO FTX REPRESENTED 18% OF ITS 'UNENCUMBERED CASH EQUIVALENTS' 📈

Cryptocurrency trading company FalconX has disclosed that it suffered losses in the collapse of FTX.

According to the company, its assets locked on FTX represent only 18% of its “unencumbered cash equivalents.” However, the company added that this ratio fell well within their counterparty exposure limits.

FalconX insisted that despite its exposure to the now insolvent FTX, its finances remain strong, as it continues to facilitate “billions of dollars” in daily trade volume for its clients. The company also claimed that its monthly volume has grown by “80%+ month-over-month.”

“In a 0% recovery scenario of FTX balances, FalconX remains one of the best-capitalized firms in digital assets,” the company said, adding that it was “highly liquid” with a 4% debt-to-equity ratio and with over 80% of its balance sheet in regulated United State banks.

Despite suffering losses in the FTX collapse, FalconX maintained it had no exposure to Genesis, Alameda Research or BlockFi.

Since the abrupt closure of FTX, some cryptocurrency companies have downplayed their exposure to the failed exchange, while others have been caught lying to their investors and clients about the impact the collapse had on them.

BlockFi, which initially denied having a majority of its assets custodied on FTX, filed for Chapter 11 bankruptcy on Nov. 28.

On Dec. 5, blockchain-based institutional capital marketplace Maple Finance cut all ties with Orthogonal Trading due to its alleged misrepresentation of finances following the collapse of FTX. According to Maple Finance, Orthogonal Trading had been “operating while effectively insolvent.”

©️ Cointelegraph (Author: Judith BannermanQuist)

Non Tech Careers in the Blockchain 💼....

1. Compliance Officer...
As Blockchain startups emerge with new government and industry regulations, compliance officers become necessary.
A compliance officer is an individual who ensures that a company complies with its outside regulatory and legal requirements as well as internal policies and bylaws. And no, a law degree is not always a requirement to be a compliance officer.

2. Administration...
Most Blockchain organisations are led by Geeks who are bad in admin. That's an opportunity for Admins.

3. Marketing...
Success in the Blockchain industry has everything to do with hype. If you are a good Marketing expert, consider looking for oppressors in the Blockchain industry.
If you are a youtuber or social media influencer, consider influencing for Blockchain organisations - this could make you a millionaire in USD quicker.

4. Researcher...
Blockchain is an emerging industry which means that a huge part of the industry remains gray. Professional researchers are needed to lead the industry into new discoveries.

5. Legal Consultant...
The importance of lawyers cannot be overemphasised in any business. If you are a lawyer, you have great opportunities in this industry.

6. Graphic designers and UX designers...
Consider upgrading your graphic designing skill to Blockchain UX designing.

7. Content Writer...
The main purpose of Blockchain content writing is mainly to educate people more about the Blockchain industry using your persuasive and informative writing skills. Forbes, Bloomberg, Cointelegraph etc are in desperate need of Blockchain content writers. The pay is great too.

8. Risk Analyst...
A risk analyst mainly identifies and analyses potential risks associated with Blockchain investments, transactions etc and then develop risk mitigation strategies for the same.

©️ Charles Awuzie

How it all began.... 👀

BREAKING DOWN FTX’S BANKRUPTCY: HOW IT DIFFERS FROM OTHER CHAPTER 11 CASES ⚖️

Collapsed crypto exchange FTX and 130 affiliates filed for bankruptcy in Delaware on Nov 11. Chaos followed as a number of FTX creditors, investors and industry experts began to question what would happen next.

Laura Shin, crypto journalist, author and host of the Unchained Podcast, sent a tweet on Nov. 15 questioning whether the alleged inter-loan agreement between FTX and Alameda — the company’s venture capital arm — will affect creditors’ and customers’ ability to get back funds.

Caitlin Long, founder of Custodia Bank — a Wyoming-based bank specializing in digital assets — tweeted that this would be the most complex bankruptcy in U.S. history.

According to Long, the international corporate structure of FTX will create complexities. This already appears to be the case, as Bahamian liquidators recently mentioned that their actions may impact the Chapter 11 case, according to Reuters. Moreover, on Nov. 14, FTX filed a document revealing that the exchange may have more than one million creditors involved in the bankruptcy case.

How the FTX bankruptcy differs
Given the complexities involved with the FTX bankruptcy, it’s become clear that this case will likely differ from other United States bankruptcy proceedings. Joseph Moldovan, chair of business solutions, restructuring and governance practices at Morrison Cohen — a New York-based law firm — told Cointelegraph that while there have been complex bankruptcy proceedings in the United States, the FTX Chapter 11 case is unique due to the unknowns.

“What’s most unusual about the FTX bankruptcy is that the debtors are complex entities with significant amounts of debt. Normally, there are months and months of preparation. Corporate bankruptcies are usually very granular, choreographed and developed processes before they are filed,” he said, adding, “This is simply not the case with the FTX bankruptcy. We (creditors and other interested parties) are still waiting for the most basic information related to the 130 various entities that have filed.”

Moldovan added that while bankruptcies like Lehman Brothers and Enron have involved multiple billions of dollars in assets, debt and numerous affiliated entities, the amount of debt, assets and creditors associated with FTX remain unclear.

“What you normally have in a U.S. bankruptcy case that you don’t have here are first day hearings, in which the lead counsel for debtors walks the court and the public through why the case was filed. This gives a sense of what the long-term goal is and how it may be achieved. We have not yet had a first day hearing in the FTX case,” Moldova further remarked. As a result, Moldovan noted that FTX creditors and interested parties are still questioning outcomes:

“We simply don’t have adequate information to obtain answers yet.”

One of the biggest questions that remains to be answered is whether FTX creditors get their money back and if so, when? Margaret Rosenfeld, a corporate securities lawyer, specializing in digital assets, told Cointelegraph that she believes it will take years before any FTX creditors receive a penny back. “This includes FTX customers and other parties FTX may have owed money to,” she said.

Moldovan explained that it is not unusual for creditor recovery to take significant time. In the United States, bankruptcy cases claims of creditors have to be filed by a certain date set forth by the bankruptcy court.

“Once this date is set, a claims agent will take these forms, scan them, and separate the claims by classes. Each of these claims will then be compared with the company’s books and records,” Moldovan said.

Yet, due to the large number of creditors involved with FTX — potentially in excess of one million — along with no current visibility into the company’s bookkeeping practices, Moldovan believes that this process will take longer than normal:

“You can’t make creditor distributions until these claims are analyzed. It’s also way too early to speculate on what kind of distribution creditors will get back. Though in mega cases, such as this, full recovery would be unusual.”
In regard to creditors who took their money off FTX before the exchange collapsed, Rosenfeld explained that these funds can be clawed back, or voided, by a bankruptcy court. “U.S. bankruptcy rules state that money can be clawed back by the court, so don’t assume that money is yours. If a creditor was paid out 90 days before the bankruptcy, a trustee can ask for that money to be paid back,” she said.

While it may take years for FTX creditors to get their investments back, Moldovan also pointed out that the case will be expensive, which will likely result in smaller payouts for creditors. He explained that this is because the funds used to pay for a bankruptcy case come from a bankruptcy “estate,” which consists of all debtors’ property.

“The funds used to pay for all of the costs of the bankruptcy case and all of the professionals retained — lawyers, accountants, restructuring advisors, and others — come out of this estate, which therefore reduces the amount available for distribution,” he said.

Given this, on Nov. 14, FTX filed what is called a “matrix” motion. Normally, Chapter 11 debtors are required to file a matrix providing a mailing list of names and addresses of creditors or parties of interest involved in a bankruptcy case. Notices and other pleadings filed in the bankruptcy proceeding are then mailed to all of the individuals listed on the matrix.

Yet, Moldovan explained that in this case, the administrative costs of compliance “has to be modified in order to reduce estate costs.” Therefore, the debtors have asked the court to authorize email service and make some other accommodations. “The bankruptcy court has the flexibility and power to do this,” he added.

What’s next: The restructuring of a distressed company
Although a number of unknowns remain in regard to the FTX bankruptcy case, it’s important to point out that John Ray, the new CEO of FTX, will be responsible for the restructuring of the company.

Moldovan explained, “Jon Ray is the new chief restructuring officer, meaning he will lead the restructuring of the distressed company and has been delegated with all corporate powers and authorities, including the ability to appoint independent directors to assist in the governance of various entities, which he has already done.”

According to aforementioned court document filed on Nov. 14, Ray has identified some of these directors: former Federal district judge Joseph J. Farnan, Jr. will serve as the lead independent director, while FTX debtors have engaged Alvarez & Marsal as proposed financial advisers. The document further states, “The appointment of Mr. Ray and the independent directors ensures that the Debtors can navigate the chapter 11 process independent of any conflicts and involvement in FTX's prepetition activities.”

While details are yet to be revealed around the FTX Chapter 11 case, Moldovan further remarked that one of the benefits of the U.S. bankruptcy court system is the transparency it provides:

“Unless there is a need for secrecy, everything will be said in open court in which anyone can listen. All pleadings and other documents in the case will be filed within a publicly accessible website for any member of the general public to visit.”
How the U.S. Bankruptcy Court intends to handle a case involving digital assets also remains a concern, especially given the lack of regulatory clarity in the United States, along with regulators who may not be familiar with cryptocurrency. However, Moldovan has expressed optimism regarding the court’s ability to deal with the complexities of the crypto ecosystem.

He said, “Everyday in the United States, bankruptcy courts analyze, value, and determine ownership of esoteric assets, crypto being one. At the heart of all this analysis is basic contract law. What do the documents that create the assets, state rights of ownership, and set forth the respective rights and relationships of the parties to the contract actually say? This analysis is fundamental to the bankruptcy process.That the courts have not made certain determinations yet, merely reflects the novelty, meaning the newness, of the particular issues raised in a crypto bankruptcy. However, this will all be sorted out.”

Credit: Cointelegraph (AUTHOR: RACHEL WOLFSON)

VITALIK BUTERIN DISCUSSES HIS EXCITEMENT FOR THE FUTURE OF ETHEREUM 👨‍💼

Vitalik Buterin says that money, blockchain identities, decentralized finance (DeFi), decentralized autonomous organizations (DAOs) and hybrid applications are the top developments he is excited about in the Ethereum ecosystem. In a Dec. 5 blog post, the Ethereum co-founder describes his experience of using Ether as a means of payment in a cafe in Argentina:

"When we walked in, the owner recognized me, and immediately showed me that he has ETH and other crypto-assets on his Binance account. We ordered tea and snacks, and we asked if we could pay in ETH. The coffee shop owner obliged, and showed me the QR code for his Binance deposit address, to which I sent about $20 of ETH from my Status wallet on my phone."

That cafe visit occurred last December, when Ethereum was still proof-of-work, so the transaction didn’t really make “pragmatic sense,” Buterin conceded. Network fees accounted for one-third of the transaction, and the funds took several minutes to arrive. But due to Ethereum’s merge to proof-of-stake in September, "transactions get included significantly more quickly, and the chain has become more stable, making it safer to accept transactions after fewer confirmations."

Then, addressing the rise of DeFi, Buterin wrote that the industry started off honorably but quickly became "an overcapitalized monster that relied on unsustainable forms of yield farming." However, he added that DeFi is in the "early stages of setting down into a stable medium, improving security, and refocusing on a few applications that are particularly valuable."

Next, Buterin praised the rise of blockchain identification methods, such as Sign In With Ethereum (SIWE), and their ability to enhance user privacy. "It [SIWE] allows you to interact with a site without giving Google or Facebook access to your private information or the ability to take over or lock you out of your account," wrote Buterin. Furthermore, he said such protocols could also be used to prove eligibility in events like governance or airdrops without compromising users' personal data.

Regarding DAOs, Buterin said while the term "captures many of the hopes and dreams that people have put into the crypto space to build more democratic, resilient and efficient forms of governance," greater work needs to be done to improve censorship resistance and susceptibility to internal organization. Highlighting the example of MakerDAO, Buterin wrote:

"MakerDAO has $7.8 billion in collateral, over 17x the market cap of the profit-taking token, MKR. Hence, if governance was up to MKR holders with no safeguards, someone could buy up half the MKR, use that to manipulate the price oracles, and steal a large portion of the collateral for themselves."
Finally, the Ethereum co-founder noted the potential of merging Ethereum blockchain technology with off-chain processes such as voting. In one scenario, Buterin wrote: "Votes are published to the blockchain, so users have a way independent of the voting system to ensure that their votes get included. But votes are encrypted, preserving privacy, and a ZK-SNARK-based solution."

As for the next steps, Buterin stuck to his belief in prioritizing projects with long-term value propositions rather than those fixated on short-term profit. "Many of the more stable and boring applications do not get built because there is less excitement and less short-term profit to be earned around them: the LUNA market cap got to over $30 billion, while stablecoins striving for robustness and simplicity often get largely ignored for years," he wrote. Post-Merge, Ethereum's next major anticipated update is the Shanghai hard fork, which will enable users to withdraw their staked Ether. The upgrade is scheduled for the second half of 2023.

Credit: Cointelegraph (AUTHOR: ZHIYUAN SUN)