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A timeline of the historic collapse of cryptocurrency exchange FTX

Published

7 months ago

25 June, 2024

A timeline of the historic collapse of cryptocurrency exchange FTX

Sam Bankman Fried, the former CEO of FTX, was a thirty-year-old cryptocurrency wunderkind who for years earned good will as a philanthropist and leading advocate for industry regulation. Now, his former company is bankrupt and he was condemned to defraud investors of billions of dollars.

A federal judge sentenced Bankman-Fried to 25 years in prison on Thursday.

Some cryptocurrency traders, who have deposited their savings on the platform, may never get their money back.

Below is a timeline of the series of events that explains exactly how the company and its founder fell so far, so fast.

2024

January 31st – An attorney representing FTX’s bankruptcy estate said the firm expects to repay clients in full. “There is still a great deal of work and risk between us and this outcome, but we believe the goal is within reach and we have a strategy to get there,” FTX lawyer Andrew Dietderich said in an email. court hearing.

February 27 – Bankman-Fried’s lawyers submitted a memorandum saying she should receive a prison sentence of between 5.25 and 6.5 years.

March 15 – Prosecutors said Bankman-Fried should receive 40 to 50 years in prison because of the “enormous scale of the fraud.”

March 28 – A federal judge sentenced Bankman-Fried to 25 years in prison. “This was a very serious crime,” said U.S. District Judge Lewis Kaplan.

2023

January 3 – In a New York courtroom, Bankman-Fried he begged not guilty of criminal charges for defrauding investors. U.S. District Judge Lewis Kaplan announced the trial will take place in October.

January 12th – Bankman-Fried published a 2,300-word blog post rebuking allegations of fraud and conspiracy, filled with charts and graphs. He said he did not steal customer funds, but attributed the company’s problems to a sharp downturn in the cryptocurrency market.

August 11th – Bankman-Fried got his bail revoked and was immediately turned over to the custody of the US Marshals. Bankman-Fried had tampered with witnesses, prosecutors said, citing his decision to share Caroline Ellison’s personal writings with the New York Times. Subsequently, Bankman-Fried was housed at the Metropolitan Detention Center in Brooklyn while awaiting trial.

October 3 – Proceedings in the Bankman-Fried trial have begun. Over the next few weeks, Ellison would do just that become one of the prosecution’s star witnesses, saying Bankman-Fried didn’t think the rules applied to him. Bankman-Fried testified in his defense during three days of hearings.

November 2 – A jury found Bankman-Fried guilty on all charges in his federal fraud and conspiracy trial. Overall, the charges carry a maximum sentence of 110 years in prison.

2022

November 2 – FTX’s collapse is partly due to the cryptocurrency exchange’s close relationship with Alameda Research, a cryptocurrency hedge fund also founded by Bankman-Fried.

The major concerns about FTX began when the news broke CoinDesk published an article noting that a significant portion of Alameda Research’s assets are made up of FTT, a token created by FTX that allows users of the exchange to access discounted trading fees.

Because FTT cannot be easily exchanged for cash, the report fueled concerns about the capital reserves of Alameda Research and thus FTX.

November 6 – In response to the article, Changpeng Zhao, CEO of rival cryptocurrency exchange Binance, often referred to as “CZ,” said he would sell all of the company’s holdings in FTT, worth $580 million worth of tokens.

The exit of a cryptocurrency giant triggered a broader sell-off, similar to a bank run, putting enormous pressure on FTX to meet the sudden demand for customer withdrawals. Due to a lack of funds, FTX has stopped customer withdrawals altogether.

November 8 – FTX has reached a deal to sell itself to Binance, the cryptocurrency exchange whose executive helped trigger the sell-off.

“This is a user-centric development that benefits the entire industry,” Bankman-Fried She said. “CZ has done, and will continue to do, incredible work to build the global crypto ecosystem and create a freer economic world.”

“The important thing is that customers are protected,” he said added.

November 9 – Binance pulled out of the deal to acquire FTX.

“As a result of corporate due diligence, as well as breaking news regarding mismanaged client funds and alleged U.S. agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com.” Binance She said.

Binance’s Zhao summed up the decision in a tweet:

Meanwhile, the Securities and Exchange Commission and the Department of Justice had begun investigating the collapse of FTX Wall Street Journal relationships.

Sequoia Capital, a leading venture capital firm, reduced its approximately $210 million stake in FTX to $0.

“Our business is risk taking,” Sequoia Capital She said in a public letter. “Some investments will surprise on the upside, others on the downside.”

November 10th – A financial regulator in the Bahamas has frozen FTX’s assets.

The Securities Commission of the Bahamas She said was aware of public statements suggesting that FTX client funds were potentially “mismanaged” and “mismanaged.”

In this May 11, 2021, file photo, Sam Bankman-Fried, co-founder and CEO of FTX, is shown in Hong Kong. Bloomberg via Getty Images, FILE

11 November – FTX has filed for Chapter 11 bankruptcy protection as it evaluates the value of its remaining assets, a company announcement said.

Bankman-Fried stepped down as CEO and was replaced by John J. Ray III, who led disgraced energy company Enron through bankruptcy proceedings in the 2000s.

“Immediate Chapter 11 relief is appropriate to provide FTX Group the opportunity to evaluate its situation and develop a process to maximize recoveries for affected parties,” Ray said.

November 12 – The Wall Street Journal reported that FTX lent customer deposits to Alameda Research to help it meet its liabilities, and senior executives at Alameda Research were aware of this, raising further scrutiny of the relationship between Alameda Research and FTX.

November 14th – The collapse of cryptocurrency exchange FTX has been the subject of an investigation by federal prosecutors in New York, sources familiar with the matter told ABC News.

The question, the sources say, is whether FTX violated securities laws when it reportedly gave client funds to Alameda Research.

November 16 – House lawmakers invited Bankman-Fried and Alameda and Binance executives to testify at a Capitol Hill hearing in December.

“The fall of FTX caused enormous damage to over a million users, many of whom were ordinary people who invested their hard-earned money in the FTX cryptocurrency exchange, only to see it all disappear in a matter of seconds,” he said Representative Maxine. Waters, D-California, said in a statement.

“Unfortunately, this event is just one of many examples of cryptocurrency platforms that have collapsed just in the past year.”

Meanwhile, celebrity supporters of FTX – including Naomi Osaka, Shaquille O’Neal and Kevin O’Leary – are being sued in federal court in a class action lawsuit alleging that misrepresentations of a deceptive product have been used to deceive vulnerable investors.

“I didn’t know, nor did any of the other celebrities, what happened here,” O’Leary, an entrepreneur and panelist on the TV show “Shark Tank,” told ABC’s “Nightline.”

Later in the day, Vox published an interview in which Bankman-Fried disparages regulators using an expletive, confesses that his previous calls for tighter crypto regulation had been driven by public relations concerns, and says he regrets that the company filed for bankruptcy.

Bankman-Fried, a prolific philanthropist, described his public commitment to ethics in the interview as “a stupid game that Westerners play.”

November 17 – John Ray, the incoming CEO tasked with guiding the company through bankruptcy proceedings, said in a filing in court that he had never seen such a “total failure” of corporate controls in his career, not even during the Enron scandal.

“From compromised systems integrity and faulty regulatory oversight overseas, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals,” Ray said.

“This situation is unprecedented,” he added.

December 12th – Bankman-Fried was arrested in the Bahamas after federal prosecutors in New York filed criminal charges contained in a sealed indictment, according to the Royal Bahamas Police Force.

A source familiar with the allegations told ABC News that Bankman-Fried is facing a multi-count fraud charge a month after FTX filed for $32 billion in bankruptcy.

The arrest “followed the receipt of formal notification from the United States that it has filed criminal charges against SBF and will likely request his extradition,” the Bahamas attorney general’s office said.

December 13th – The US Securities and Exchange Commission accused Bankman-Fried of defrauding investors.

“The collapse of FTX highlights the real risks that unregistered cryptocurrency trading platforms can pose to both investors and customers,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement.

ABC News’ Aaron Katersky, Meredith Deliso, Mark Osborne, Mark Gaurino and Melissa Gaffney contributed to this report.

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News

Block Investors Need More to Assess Crypto Unit’s Earnings Potential, Analysts Say — TradingView News

Published

7 months ago

11 July, 2024

FinCrypt Staff

DeFi Lending Protocol Nexo Allocates $12 Million for Ecosystem Incentives — TradingView News

Block, a payments technology company led by Jack Dorsey square could become a formidable player in the cryptocurrency mining industry, but Wall Street will need details on profit margins to gauge the positive impact of the business on earnings, analysts said.

Block signed its first large-scale cryptocurrency mining hardware pact on Wednesday, agreeing to supply its chips to bitcoin miner Core Scientific CORZbut no financial details were disclosed.

JP Morgan estimates the deal could net Block between $225 million and $300 million, but said more information will be needed to assess the hardware business’s long-term earnings potential.

“We still have a lot to learn in terms of the margins of this business, so we are hesitant to underwrite this transaction until we know more about the cadence and economics,” J.P. Morgan said.

The deal marks a major step for the payments company, which started out as “Square” in 2009 before rebranding in 2021 in a nod to its focus on crypto and blockchain technologies.

Dorsey, who co-founded and ran Twitter (now known as “X”), has long been bullish on Bitcoin. Block began investing 10% of its monthly gross profit from Bitcoin products into Bitcoin in April.

In the first quarter, nearly 9% of the company’s cash, cash equivalents, and marketable securities consisted of bitcoin.

“This development (the deal with Core Scientific) is further evidence of Block’s role as an emerging leader in the crypto hardware ecosystem,” Macquarie analysts Paul Golding and Emma Liang wrote in a note.

Analysts say similar deals to follow could further validate Block’s reputation in the industry.

But J.P. Morgan said the stock’s performance will be determined by Block’s other segments, such as Square and Cash App.

Block shares have lost nearly 17% this year.

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News

This Thursday’s US Consumer Price Index could be a game-changer for cryptocurrencies!

Published

7 months ago

11 July, 2024

FinCrypt Staff

This Thursday's US Consumer Price Index could be a game-changer for cryptocurrencies!

3:30 PM ▪ 4 minute read ▪ by Luc Jose A.

This Thursday, attention will be focused on the United States with the anticipated release of the Consumer Price Index (CPI). This economic indicator could trigger significant movements in the markets, especially for the U.S. dollar and cryptocurrencies. While investors remain vigilant, speculation is rife about the potential impact of these key figures.

The Consumer Price Index: The Cornerstone of the American Economy

The Consumer Price Index (CPI) is a key measure of inflation which reflects changes in the price of goods and services purchased by American households. This index is calculated monthly by the Bureau of Labor Statistics (BLS) and serves as a barometer for the cost of living. The consumer price index covers a wide range of products, including food, clothing, housing, health care, and entertainment. Economists and policy makers closely monitor this data to anticipate economic trends and adjust monetary policies accordingly.

The June CPI data is due to be released this Thursday at 2:30 p.m., and is highly anticipated by investors. The current consensus is for headline annual inflation to decline to 3.1%, from 3.3% the previous month, while core inflation is expected to remain stable at 3.4%.

THE BIGGEST EVENT THIS WEEK 🚨

The U.S. Consumer Price Index is expected to
PUBLICATION TODAY AT 8:30 AM ET.

EXPECTATIONS ARE 3.1% WHILE
LAST MONTH THE CONSUMER PRICE INDEX (CPI) WAS 3.3%

HERE ARE SOME SCENARIOS 👇

1) CPI above 3.1%

THIS WILL BE A DAMAGE TO THE MARKET
GIVEN THAT THE LAST TIME THE CPI DATA… photo.twitter.com/yudjPLPl8g

— Ash Crypto (@Ashcryptoreal) July 11, 2024

Consumer Price Index Release: What Does It Mean for the Dollar and Bitcoin?

Inflation as measured by the consumer price index is a key determinant of the value of the US dollar. If the consumer price index declines more than expected, it could reinforce expectations of a rate cut by the Federal Reserve in September, thus weakening the dollar. A weaker dollar could benefit GBP/USD, which recently broke a major resistance level, and Bitcoin, which could see its price rise due to increased demand from institutional investors.

Current forecasts suggest that headline inflation will decline to 3.1%, with core inflation holding steady at 3.4%. However, a surprise increase in the consumer price index could upset these expectations. Fed Governor Lisa Cook has mentioned the possibility of a soft landing for the economy, with inflation falling without a significant increase in unemployment, which could lead the Fed to consider rate cuts. This outlook is particularly favorable for stock markets and cryptocurrencies, including Bitcoin, which could benefit from a more accommodative monetary policy.

According to experts at 10x Research, especially their CEO Markus Thielen, Bitcoin could see a significant increase if the CPI data confirms a decline in inflation. Thielen indicated that Bitcoin could reach almost $60,000, a prediction that has already been reflected with a rise to $59,350 before the data was released.

Therefore, Thursday’s CPI data could determine the future direction of financial and cryptocurrency markets. High inflation could strengthen the US Dollarwhile a drop in inflation could pave the way for rate cuts by the Fed, thus giving a boost to Bitcoin and other digital assets.

Enhance your Cointribune experience with our Read to Earn program! Earn points for every article you read and access exclusive rewards. Sign up now and start earning rewards.

Click here to join “Read to Earn” and turn your passion for cryptocurrencies into rewards!

Avatar of Luc Jose A.

Luke Jose A.

A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I am committed to raising awareness and informing the general public about this ever-evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. Every day, I strive to provide an objective analysis of the news, decipher market trends, convey the latest technological innovations and put into perspective the economic and social issues of this ongoing revolution.

DISCLAIMER

The views, thoughts and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Do your own research before making any investment decisions.

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Crowd Expects Bitcoin Bounce Suggests Further Losses, As RCO Finance Resists Crash

Published

7 months ago

11 July, 2024

FinCrypt Staff

Crowd Expects Bitcoin Bounce Suggests Further Losses, As RCO Finance Resists Crash

Bitcoin is seeing a rebound after its recent price crash to $53,000. Other altcoins are subsequently recovering, with many cryptocurrency investors increasingly making new entries. However, Santiment warned against this hopium, suggesting that Bitcoin could extend its price losses.

As the broader market anticipates Bitcoin’s next price action, RCO Finance (RCOF) demonstrates resilience, attracting thousands of people in influxes. Read on for more details!

RCO Finance challenges the market crisis

RCO Finance (RCOF) is approaching $1 million in funding raised, amid growing interest from institutional traders seeking stability from Bitcoin’s wild price swings. While much of the broader market has seen significant price losses, RCO Finance has remained resilient, experiencing a surge in its pre-sale orders.

As a result, the project seems oblivious to the current market conditions, leading top market experts to take a deep dive into its ecosystem. They identified why RCO Finance was able to withstand the bearish pressure and its potential to hold up even stronger during the impending broader market crash.

The main reason was related to the innovative use of RCO Finance AI Trading Tools as a Robo Advisor. This tool has been integrated into RCO Finance’s cryptocurrency trading platform, offering full automation and highly accurate market forecasts to help investors make informed decisions.

Read on to learn more about this tool and other exciting features of RCO Finance!

Bitcoin Bounces Amid Impending Crash

Bitcoin is bouncing back, rallying 8% after plunging to its lowest point since February on July 5. While this rebound has triggered a bullish wave in the broader market, many cryptocurrency analysts predict it could be short-lived as Bitcoin is poised for an imminent crash toward the $50,000 zone.

On a Post X (formerly Twitter)Santiment revealed that while the crowd is anticipating a Bitcoin rally, this potential crash could trigger FUD and panic, causing average traders to wither and give up on Bitcoin. The platform noted that Bitcoin rally has historically occurred after these weak hands sold their holdings.

In particular, these cryptocurrency analysts speculate that the previous and upcoming Bitcoin crash is largely the result of bearish market psychology, as opposed to large BTC sell-offs by the German government and Mt. Gox. In particular, Ki Young Ju, founder and CEO of CryptoQuant, noticed that “the sales were rather negligible, given the overall liquidity of Bitcoin.”

Enjoy seamless investing on RCO Finance

RCO Finance is making investing easier and easier, democratizing access to high-level tools and cryptocurrency earnings that were once reserved for professional and institutional investors. It has also prioritized accessibility, allowing investors of all levels to easily navigate its features through its intuitive interface.

Additionally, they can also maintain anonymity and privacy as the platform has no KYC requirements. To build trust, the platform has instead emphasized regular smart contract audits by respected security firm SolidProof.

Performance data shows massive adoption, indicating that it is doing its job effectively. Investors can also capitalize on RCO Finance’s fast transaction speeds and incredibly low transaction fees, with leverage options up to 1000x to further optimize their portfolios and maximize returns.

Leverage RCO Finance’s pre-sale earnings

An in-depth analysis of the RCO Finance ecosystem revealed that it has strong potential to rival and surpass major cryptocurrencies in the cryptocurrency industry. With a very limited total token supply and excellent tokenomics, RCO Finance is poised to reach its target of $1 billion in market cap upon its official launch.

RCO Finance has adopted a deflationary model, strategic burn mechanisms, and a vesting schedule. However, the project encourages long-term holding by focusing on sustained growth through incredibly high staking rewards.

RCOF tokens are currently available at an altcoin price of $0.01275 in progress Pre-sale Phase 1. This is likely the lowest price these coins will ever trade at, as they are expected to increase exponentially with each new presale phase.

With RCOF expected to be $0.4 at launch, investors jumping in now can expect a Return 30x on their investment!

For more information on RCO Finance (RCOF) presale:

Visit RCO Finance Pre-sale

Join the RCO Financial Community

Disclaimer: The statements, views and opinions expressed in this article are solely those of the content provider and do not necessarily represent those of Crypto Reporter. Crypto Reporter is not responsible for the reliability, quality and accuracy of any material in this article. This article is provided for educational purposes only. Crypto Reporter is not responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Do your own research and invest at your own risk.

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Bitget Ranks Third Among Cryptocurrency Exchanges by Capital Inflows in Q2

Published

7 months ago

11 July, 2024

FinCrypt Staff

Although Bitget is not the largest cryptocurrency exchange in terms of total volumes, it closed a favorable quarter. From April to June, the platform ranked third in net capital inflows and showed the strongest growth in market share compared to its competitors.

In the second quarter, investors moved $700 million into Bitget, and activity on the platform increased by nearly 50%.

The exchange has seen a surge in user funds, with Bitcoin (BTC), Tether (USDT), and Ethereum (ETH) rising 73%, 80%, and 153%, respectively, in the first six months of the year. This growth coincided with adding 2.9 million new users to the platform.

This has positioned Bitget among the top exchanges with the highest positive net inflows in the last quarter. Only Binance, which remains the market leader, and Bitfinex have performed better in this category.

According to CCData’s latest H2 Outlook Report, the exchange also recorded the highest market share growth among centralized exchanges, increasing 38.4% from H2 2023 to H1 2024.

Bitget’s spot trading volume has also seen a visible increase, going from $28 billion in Q1 to $32 billion in Q2, marking an increase of over 10%. The platform’s monthly visitors have reached 10 million. Although its volumes are increasing, Bitget still does not rank among the top 10 cryptocurrency exchanges in terms of spot trading.

The changes taking place in the centralized cryptocurrency exchange market show that competition is becoming more and more intenseAn example of this is the recent surge in popularity of Bybit, which has become the second largest exchange in terms of spot trading volumes.

Sports Sponsorships and New Products

Gracy Chen, Source: LinkedIn

Gracy Chen, CEO of Bitget, commented on the quarterly performance, saying, “Q2 2024 was a pivotal period for Bitget. Our collaboration with Turkish athletes, along with significant growth in users and website traffic, is part of our global expansion.”

In an effort to expand its global presence, Bitget has partnered with three Turkish national athletes as part of its #MakeItCount campaign, starring Lionel Messi. The deal with the famous footballer It was signed in Februaryto build brand presence in Latin America.

The exchange also launched a $20 million TON Ecosystem Fund in partnership with Foresight Ventures to support early-stage projects on The Open Network.

The exchange introduced two new initial token listing products, PoolX and Pre-market, which collectively launched over 100 projects. Additionally, Bitget’s native token, BGB, was recognized as the best-performing centralized exchange token in June and was ranked among the top 10 cryptocurrencies by Forbes.

In its latest move, the cryptocurrency exchange aimed to become a regulated player in IndiaThe announcement comes as the world’s most populous democracy grapples with the complexities of integrating cryptocurrencies into its financial ecosystem.

Even recently,
Bitget Wallet Announced a joint investment with cryptocurrency investment firm Foresight X in Tomarket, a decentralized trading platform. This initiative targets emerging asset classes and aims to expand the portfolio’s services beyond traditional decentralized exchanges (DEXs).

In the second quarter, investors moved $700 million into Bitget, and activity on the platform increased by nearly 50%.

According to CCData’s latest H2 Outlook Report, the exchange also recorded the highest market share growth among centralized exchanges, increasing 38.4% from H2 2023 to H1 2024.

The changes taking place in the centralized cryptocurrency exchange market show that competition is becoming increasingly intenseAn example of this is the recent surge in popularity of Bybit, which has become the second largest exchange in terms of spot trading volumes.

Sports Sponsorships and New Products

Gracy Chen, Source: LinkedIn

The exchange also launched a $20 million TON Ecosystem Fund in partnership with Foresight Ventures to support early-stage projects on The Open Network.

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