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Jan 6 (Reuters) - FTX's U.S.-based bankruptcy team have agreed to coordinate with liquidators winding down the crypto exchange's operations in the Bahamas, resolving a dispute that threatened the recovery of what could be billions of dollars in lost funds. FTX’s U.S. bankruptcy team has been at odds with Bahamian officials since November, when competing bankruptcies were filed in the two countries. The Securities Commission of the Bahamas began liquidation proceedings on Nov. 10 against FTX Digital Markets Ltd., the company's Bahamas-based unit. The next day a U.S. Chapter 11 proceeding was filed in Delaware, which included more than 100 FTX entities including FTX Trading and crypto hedge fund Alameda Research. Bahamian regulators have seized FTX assets, which officials said was meant to safeguard assets that will ultimately be returned to creditors of FTX Digital Markets.

☆ Thought last year was bad for crypto? From FTX to Silvergate, the red flags are flying for the year ahead.
▼ + stars: | 2023-01-06 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

Those realizations came to head repeatedly in 2022 as crypto hacks and a wintry bear market crescendoed with the collapse of Sam Bankman-Fried's FTX. On a macro level, persistent recession fears make speculative assets such as tokens or tech stocks less enticing. More notable is crypto bank Silvergate's nearly 50% plunge Thursday, and the company's announcement it would cut 40% of its staff. Job cuts at Amazon and Salesforce signal the first necessary step in staging a turnaround for tech stocks. All told, analysts predict layoffs could catalyze a 20% rally for tech stocks in 2023.

☆ FTX fraud investigators are digging deeper into Sam Bankman-Fried's inner circle – and reportedly have ex-engineer Nishad Singh in their sights
▼ + stars: | 2023-01-06 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

They're currently scrutinizing former FTX engineer Nishad Singh, people familiar with the matter said. Singh first met Sam Bankman-Fried through the now-disgraced FTX founder's younger brother Gabe, who he was high school friends with. "[Former FTX chief technology officer] Gary [Wang] is scared, Nishad is ashamed and guilty," Bankman-Fried said. "It hit [Singh] hard. Read more: Everything we know about Nishad Singh, the 27-year-old former FTX exec who had an 8% stake in the crypto exchange

☆ Crypto firms off to rocky start in 2023 with outflows, layoffs and a lawsuit
▼ + stars: | 2023-01-05 | by ( Hannah Lang | ) www.reuters.com time to read: +4 min

The fallout from the collapse of crypto exchange FTX and criminal charges leveled against its founder Sam Bankman-Fried weighed heavily on the sector this week. Among those hit were Genesis Global Capital, which laid off staff, and crypto-focused Silvergate Bank, which reported a large fall in deposits. Another crypto entrepreneur, Alex Mashinsky, the founder and former CEO of Celsius Network, also encountered a legal battle on Thursday. The accounts at Silvergate Bank and Farmington State Bank, which does business as Moonstone Bank, held about $143 million, court records showed. Crypto exchange Gemini, which had a crypto lending product in partnership with Genesis, and other Genesis creditors have been agitating for a solution to avoid a situation similar to FTX’s rapid descent into bankruptcy.

☆ Crypto Lender Genesis Lays Off 30% of Staff in Second Round of Layoffs
▼ + stars: | 2023-01-05 | by ( Caitlin Ostroff | Vicky Ge Huang | ) www.wsj.com time to read: 1 min

Genesis has sought lifelines in the form of an emergency loan of $1 billion from investors. Genesis Global Trading Inc. laid off 30% of its staff Thursday, according to people familiar with the matter, the latest sign of financial turmoil at the crypto lender. The firm suffered steep losses from loans it supplied to the now-defunct trading firm Alameda Research and crypto hedge fund Three Arrows Capital. Both Alameda and Three Arrows filed for bankruptcy last year.

☆ FTX's ex-top lawyer is reportedly cooperating with investigators, revealing details about what Sam Bankman-Fried did with customer funds
▼ + stars: | 2023-01-05 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +3 min

FTX's ex-top lawyer has cooperated with US agencies investigating the crypto exchange, per Reuters. Daniel Friedberg spoke about how Sam Bankman-Fried used customer funds to finance the FTX empire. FTX's ex-CEO is facing fraud charges, and billions of dollars of customer funds are missing. Since FTX collapsed in November, reports have emerged that billions of dollars in trading customer funds were funneled to Alameda to prop up the crypto hedge fund. FTX's former regulatory chief was willing to share information about the crypto exchange right after it filed for bankruptcy on November 11, the report said.

☆ New York AG accuses Celsius ex-CEO of defrauding crypto investors
▼ + stars: | 2023-01-05 | by ( Rohan Goswami | ) www.cnbc.com time to read: +3 min

New York Attorney General Letitia James sued former Celsius Network CEO Alex Mashinsky on Thursday, alleging that Mashinsky defrauded hundreds of thousands of investors at his now-bankrupt crypto exchange. At one point, deposits at the crypto exchange were valued at $20 billion, according to the complaint. But Mashinsky's statements were false, James alleges, and became part of the former Celsius CEO's efforts to hide deep losses on risky crypto-lending investments. Celsius investors were left bereft and so despondent that some considered suicide, CNBC previously reported. Celsius entered bankruptcy proceedings with only $1.75 billion in crypto assets, a far cry from the $4.7 billion it owed users.

☆ Sam Bankman-Fried's $470 million Robinhood stake is set to be seized by US authorities, attorney says
▼ + stars: | 2023-01-05 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

Sam Bankman-Fried's Robinhood shares are set to be seized by US authorities, an attorney said Wednesday. Bankman-Fried, FTX's new bosses, bankrupt crypto lender BlockFi and FTX creditor Yonatan Ben Shimon have all laid claim to the Robinhood stake, per a December 22 court filing. Bankman-Fried disclosed a 7.6% stake in Robinhood in May, acquiring 56.3 million shares in the trading platform for $648 million through an Antigua-based holding company called Emergent Fidelity Technologies. Robinhood shares traded at $8.36 as of Wednesday's closing bell – meaning that Emergent's position is now worth just over $470 million. Read more: Sam Bankman-Fried is facing off against FTX's new bosses in a 4-way battle for $450 million of Robinhood shares

The Justice Department said Wednesday that has moved to seize millions of shares of Robinhood, the popular stock-trading app, whose ownership is disputed by several parties, including Bankman-Fried himself, his bankrupt crypto exchange FTX and another bankrupt crypto company. Four separate entities have laid claim to the approximately 56 million shares, worth about $460 million. That company, Emergent Fidelity Technologies, borrowed more than $546 million from crypto hedge fund Alameda Research, according to an affidavit Bankman-Fried filed in December. Also claiming the Robinhood shares are bankrupt crypto lender BlockFi and an individual FTX creditor. As of December 31, roughly $150 million of Silvergate’s deposits were from customers that have filed for bankruptcy.

☆ Crypto just had an awful week
▼ + stars: | 2023-01-05 | by ( Allison Morrow | ) edition.cnn.com time to read: +5 min

It’s the kind of negative press that the crypto faithful want to either ignore completely or denounce as a fringe, one-off scandal. But crypto is a tight-knit web, and when one corner collapses it puts the whole lot at risk. And we’re not done yet…Also this week:Coinbase, a publicly traded US crypto platform, agreed to a $100 million settlement after a New York regulator found “significant failures” to comply with the state’s anti-money-laundering laws. Bottom line: I’m not here to write crypto’s obit, and I am well aware that there are plenty of legitimate crypto enterprises out there. But no one within crypto agrees on what those regulations should look like, and some dispute the need for regulation in the first place.

☆ U.S. authorities probe FTX engineer Singh -Bloomberg News
▼ + stars: | 2023-01-05 | by ( ) www.reuters.com time to read: +1 min

Jan 5 (Reuters) - U.S. authorities are investigating the chief engineer of bankrupt crypto exchange FTX, Nishad Singh, ratcheting up pressure on founder Sam Bankman-Fried's inner circle, Bloomberg News reported on Thursday, citing people familiar with the matter. The Securities and Exchange Commission and the Commodity Futures Trading Commission are also probing Singh, the report said, citing a source. A lawyer for Singh, Andrew D. Goldstein, did not immediately reply to a request for comment. The SEC and CFTC did not immediately respond to requests for comment. Lawyers for Bankman-Fried did not immediately respond to a request for comment.

☆ U.S. securities regulator probes FTX investors' due diligence -sources
▼ + stars: | 2023-01-05 | by ( Chris Prentice | ) www.reuters.com time to read: +3 min

REUTERS/Dado Ruvic/Illustration/File PhotoNEW YORK, Jan 5 (Reuters) - The U.S. Securities and Exchange Commission (SEC) is seeking details about FTX investors' due diligence, according to two sources familiar with the inquiry, as fallout from the crypto firm's collapse spreads. Reuters and others previously reported that U.S. authorities sent document requests to investors and potential investors in FTX, seeking details on their communications with FTX officials. Those inquiries predated last month's SEC charges against FTX founder Sam Bankman-Fried for allegedly defrauding such investors. The SEC's inquiries to investors have continued after SEC filed those charges, and the agency has now shifted its focus to the firms' diligence, the sources said. FTX filed for bankruptcy in November amid what its new CEO later described as a "complete failure of corporate controls".

☆ Billionaire Mark Cuban warns the next crypto implosion could come from 'wash trades,' report says
▼ + stars: | 2023-01-05 | by ( Brian Evans | ) www.businessinsider.com time to read: +2 min

Billionaire Mark Cuban thinks the next crypto meltdown could stem from wash trades. Wash trades are a form of pump-and-dump scheme to artificially generate interest around a crypto token. "I think the next possible implosion is the discovery and removal of wash trades on central exchanges," he told The Street. Wash trades are a type of pump-and-dump scheme that involve creating artificial interest in a financial asset, in this case a cryptocurrency. The report also said that in 12 "tier-2 exchanges," wash trades accounted for nearly 80% of the total trade volume.

☆ Factbox: From BlockFi to Genesis, crypto firms reel from exposure to FTX
▼ + stars: | 2023-01-05 | by ( ) www.reuters.com time to read: +5 min

Jan 5 (Reuters) - After the collapse of major cryptocurrency exchange FTX, the industry has felt a ripple effect due to the exposure of many companies to FTX and its affiliated trading firm Alameda Research. Here are some firms that have given information about their exposure to FTX. The crypto lending arm of U.S. digital asset broker Genesis Trading suspended customer redemptions last month, citing the sudden failure of FTX. Genesis said in a tweet on Nov. 10 that its derivatives business has approximately $175 million in locked funds on FTX. COINSHARESCrypto asset manager CoinShares has $30.3 million worth of exposure to crypto exchange FTX, it said in a statement on Nov. 10.

☆ Crypto lender Genesis Trading lays off 30% of workforce
▼ + stars: | 2023-01-05 | by ( Rohan Goswami | ) www.cnbc.com time to read: +1 min

Genesis had already laid off 20% of its workforce and last year replaced its CEO. Silbert's crypto conglomerate, which includes the Grayscale Bitcoin Trust (GBTC) and mining company Foundry, was hit by the market tumult of 2022 and the bankruptcy of crypto hedge fund Three Arrows Capital. The Wall Street Journal reported earlier on the cuts. Genesis engaged bankruptcy professionals shortly after the collapse of crypto exchange FTX and its sister hedge fund Alameda Research. The Wall Street Journal reported that Genesis had sought an emergency loan of $1 billion shortly after the implosion of Alameda, which was a major Genesis client.

☆ Bankrupt cryptocurrency lender Celsius Networks allegedly defrauded investors out of billions of dollars
▼ + stars: | 2023-01-05 | by ( Kara Scannell | ) edition.cnn.com time to read: +2 min

New York CNN —The New York attorney general filed a civil lawsuit Thursday against the co-founder of now-bankrupt cryptocurrency lender Celsius Networks for allegedly defrauding hundreds of thousands of investors who deposited billions of dollars into the platform. The lawsuit against Alex Mashinsky alleges he made false and misleading statements to encourage investors to place billions of dollars in digital assets with Celsius, which filed for bankruptcy court protection last year. “The law is clear that making false and unsubstantiated promises and misleading investors is illegal,” James said in a statement Thursday. When faced with losses, the lawsuit alleges, Mashinsky hid them from investors and continued to tout the safety of the platform to recruit new investors. In extending many of the loans, Celsius accepted FTX’s token, FTT, as collateral.

☆ Exclusive: FTX's former top lawyer aided U.S. authorities in Bankman-Fried case
▼ + stars: | 2023-01-05 | by ( Angus Berwick | ) www.reuters.com time to read: +5 min

Friedberg gave details about FTX in a Nov. 22 meeting with two dozen investigators, the person said. "THROUGH THICK AND THIN"Prior to his work advising FTX, Friedberg advised a mix of banking, fintech, and online gaming companies. At the time, the source said Friedberg advised Bankman-Fried on running Alameda, which he founded that year. In 2020, when Bankman-Fried launched a separate exchange for U.S. customers called FTX.US, Friedberg moved in-house as FTX's chief regulatory officer. In a now-deleted blog post published that year on FTX's website, Bankman-Fried wrote that Friedberg was FTX's legal advisor "from the very beginning," noting he had been "with us through thick and thin."

☆ Silvergate slashes 40% of staff in the wake of a run on the crypto bank that forced it to sell assets at a loss to cover $8.1 billion in withdrawals
▼ + stars: | 2023-01-05 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +3 min

Silvergate cut 40% of its staff as the crypto-focused bank reels from FTX's implosion. The collapse of FTX in particular sparked a run that forced the crypto-focused bank to cover $8.1 billion worth of customer withdrawals in late 2022. To meet the spike in withdrawals, Silvergate has had to sell assets at significant losses, liquidating debt the firm was holding on its balance sheet. The firm added that it has $4.6 billion in cash and cash equivalent, which Silvergate says exceeds its deposits. "Silvergate appears to be at the center of the improper transfer of billions in FTX customer funds.

[1/3] The logo of Robinhood Markets, Inc. is seen at a pop-up event on Wall Street after the company's IPO in New York City, U.S., July 29, 2021. REUTERS/Andrew KellyJan 4 (Reuters) - U.S. prosecutors are in the process of seizing shares of Robinhood Markets Inc (HOOD.O) tied to Sam Bankman-Fried, who has been charged with fraud in the collapse of the FTX cryptocurrency exchange, a U.S. attorney told a judge on Wednesday. He said the Robinhood shares were subject to litigation and it was an "open question" about who owns them. The Robinhood stock, worth about $465 million at Wednesday's late afternoon price of $8.30 per share, is also being claimed by BlockFi Inc, another bankrupt crypto firm. BlockFi is suing Emergent in a bid to seize the Robinhood stock, which was pledged by Alameda as collateral to guarantee repayment of a loan made by BlockFi.

[1/3] The logo of Robinhood Markets, Inc. is seen at a pop-up event on Wall Street after the company's IPO in New York City, U.S., July 29, 2021. The Department of Justice did not believe the 56 million shares of Robinhood, worth about $465 million, were property of a bankruptcy estate, U.S. attorney Seth Shapiro told U.S. Bankruptcy Judge John Dorsey, who is overseeing the FTX bankruptcy. Bankrupt crypto firm BlockFi, FTX and liquidators in Antigua have all laid claim to the Robinhood stock, along with Bankman-Fried. He said the Robinhood shares were subject to litigation and it was an "open question" about who owns them. BlockFi is suing Emergent in a bid to seize the Robinhood stock, which was pledged by Alameda as collateral to guarantee repayment of a loan made by BlockFi.

☆ Inflation fears fade as geopolitical risks rise
▼ + stars: | 2023-01-04 | by ( Paul R. La Monica | ) edition.cnn.com time to read: +8 min

New York CNN —Inflation fears roiled the markets in 2022. Now, investors may have scarier things to worry about in 2023, according to a report from global research and consulting firm Eurasia Group. “Inflation shockwaves” still feature as one of Eurasia’s top political risks for 2023 in a new report. But FTX and Alameda were each forced to file for bankruptcy in December after investors rushed to pull deposits. Just a year ago, Apple was the first company in the world to reach a $3 trillion market valuation.

☆ US prosecutors have launched an FTX Task Force to track down and recover missing crypto customer funds totalling at least $3 billion
▼ + stars: | 2023-01-04 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +3 min

New York prosecutors have set up an FTX Task Force team to probe the collapse of the crypto exchange. The team will work to trace and recover missing FTX customer funds, which total at least $3 billion. More than 1 million customers could be affected by what the US government has described as an epic fraud at FTX. The task force team brings together senior prosecutors with expertise in securities and commodities fraud, public corruption, money laundering and transnational criminal enterprises. The FTX businesses are estimated to owe their biggest creditors up to $3 billion, per the Financial Times, while Reuters reported that Bankman-Fried transferred at least $4 billion in FTX funds, including customers' money, to Alameda.

Sam Bankman-Fried pleaded not guilty in New York federal court Tuesday to eight charges related to the collapse of his former crypto exchange FTX and hedge fund Alameda Research. The onetime crypto billionaire was indicted on charges of conspiracy to commit wire fraud and securities fraud, individual charges of securities fraud and wire fraud, money laundering, and conspiracy to avoid campaign finance regulations. Federal prosecutors also announced the launch of a new task force to recover victim assets as part of an ongoing investigation into Bankman-Fried and the collapse of FTX. Federal prosecutors built the indictment against Bankman-Fried with unusual speed, packaging together the criminal charges against the 30-year-old in a matter of weeks. The federal charges came alongside complaints from the Commodity Futures Trading Commission and the Securities and Exchange Commission.

☆ FTX founder Sam Bankman-Fried to appear in court Tuesday
▼ + stars: | 2023-01-03 | by ( Samantha Murphy Kelly | ) edition.cnn.com time to read: +2 min

New York CNN —Sam Bankman-Fried, the disgraced founder of bankrupt crypto exchange FTX, is set to appear in person in a Manhattan federal court on Tuesday to face charges that include cheating investors out of billions of dollars. Bankman-Fried, known as SBF, is charged with eight criminal counts ranging from wire fraud and conspiracy to commit money laundering, to conspiracy by misusing customer funds. He is expected to plead not guilty and could face up to 115 years in prison if convicted on all charges. Wang faces up to 50 years in prison in accordance with federal sentencing guidelines referenced in court. Ellison faces up to 110 years in prison for the seven criminal counts she’s pleaded guilty to, per federal sentencing guidelines.

☆ Sam Bankman-Fried pleads not guilty in the US government's criminal case over FTX crash
▼ + stars: | 2023-01-03 | by ( Sindhu Sundar | Jacob Shamsian | ) www.businessinsider.com time to read: +3 min

Sam Bankman-Fried entered a plea of not guilty to the fraud and conspiracy charges against him, according to reports. If Bankman-Fried doesn't reach a deal with the government, the case would head to a trial. "Just because he enters a plea of not guilty, it doesn't mean he's not working with prosecutors." How those cases proceed would also depend on the course of the criminal case. A criminal trial, for instance, could help him put civil suits against him on hold.

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