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☆ FTX: Inside the crypto giant's downfall
  + stars: | 2022-11-18 | by ( Allison Morrow | ) edition.cnn.com   time to read: +9 min
Crypto contagionThe crypto industry is on edge, waiting for the next dominoes to fall. Soon after FTX went down, crypto firms were inundated requests from customers seeking to claw their money back — the crypto equivalent of a run on the bank. The pain isn’t confined to crypto companies. SBF had become a fixture in Washington, too, where he regularly traveled to lobby lawmakers for greater regulatory clarity for the crypto industry. “It’s about fraud and the power of virtue signaling.”He added: “This scandal, far from destroying crypto, practically ensures that crypto will be around for a long, long time.”
☆ Crypto firm Multicoin expects contagion from FTX to wipe out many trading firms in coming weeks
  + stars: | 2022-11-17 | by ( Ari Levy Mackenzie Sigalos | Ari Levy | Mackenzie Sigalos | ) www.cnbc.com   time to read: +4 min
It's a stark reversal for five-year-old Multicoin, which announced a $430 million fund in July, its third and largest to date. "We put entirely too much trust in our relationship with FTX," Multicoin managing partners Kyle Samani and Tushar Jain wrote in the 3,400-plus word letter, which CNBC obtained. Multicoin said it doesn't expect the crypto market to turn anytime soon. "Many trading firms will be wiped out and shut down, which will put pressure on liquidity and volume throughout the crypto ecosystem. The crypto market has experienced multiple pullbacks in the last few years and has bounced back.
☆ One professional trader game planned for Alameda's blowup, but it still wasn't enough to protect against FTX's collapse
  + stars: | 2022-11-16 | by ( Dan Defrancesco | ) www.businessinsider.com   time to read: +5 min
Sam Bankman-Fried, founder and CEO of crypto exchange FTX. Amid the implosion of crypto exchange FTX, I'm sure many of you had a similar thought creep into your mind. That would be unfathomable that he would do that — even if your prop shop went down, why would you risk a $32 billion exchange business that prints money?" The lake-side castle the New York Yankees legend put on the market four years ago is now reportedly going to auction with an opening bid of $6.5 million. Keep updated with the latest business news throughout your day by checking out The Refresh from Insider, a dynamic audio news brief.
☆ Wall Street has made serious strides to embrace crypto this year. But after FTX's implosion, a regulatory crackdown is imminent.
  + stars: | 2022-11-15 | by ( Morgan Chittum | Rebecca Ungarino | ) www.businessinsider.com   time to read: +7 min
In a stunning downfall, crypto platform FTX filed for Chapter 11 bankruptcy protection on Nov. 11. Crypto sentiment from Wall Street giants has come a long way over the past few years. After FTX's disaster, a crackdown on digital assets is imminent. Prominent government officials quickly spoke out against the crypto platform last week. Gensler says that the agency's aggressive stance on digital assets is an effort to protect investors and may encourage further crypto adoption.
☆ From $32 billion to criminal investigations: How Sam Bankman-Fried's empire vanished overnight
  + stars: | 2022-11-15 | by ( Mackenzie Sigalos | ) www.cnbc.com   time to read: +17 min
Alameda's success spurred the launch of crypto exchange FTX in the spring of 2019. A Twitter fight with the CEO of rival exchange Binance pulled the mask off the scheme. Alameda, FTX and a host of subsidiaries Bankman-Fried founded have filed for bankruptcy protection in Delaware. On Nov. 2, CoinDesk reported a leaked balance sheet showing that a significant amount of Alameda's assets were held in FTX's illiquid FTT token. On Nov. 6, according to Bankman-Fried, the exchange had roughly $5 billion of withdrawals, "the largest by a huge margin."
☆ FTX crash shares eerie similarities with Bernie Madoff, ex-regulator Sheila Bair says
  + stars: | 2022-11-15 | by ( Matt Egan | ) edition.cnn.com   time to read: +6 min
Sheila Bair, a top regulator during the 2008 financial crisis, told CNN there are eerie similarities between the dramatic rise and fall of Bankman-Fried and FTX and that of infamous Ponzi scheme mastermind Bernie Madoff. Bair notes that 30-year-old Bankman-Fried, like Madoff, proved adept at using his pedigree and connections to seduce sophisticated investors and regulators into missing “red flags” hiding in plain sight. Up until the bankruptcy filing, FTX even had an application pending with federal regulators to clear derivatives, The Wall Street Journal reported. FTX’s bankruptcy filing indicates it had liabilities of $10 billion to $50 billion at the time of the filing. — If you are an FTX customer and want to discuss how you have been impacted by the bankruptcy, please reach out to Matt.Egan@CNN.com
☆ A top oil analyst explains why oil is about to surge to $120 - and stay there for 2 years as Europe battles supply shocks
  + stars: | 2022-11-15 | by ( Phil Rosen | ) www.businessinsider.com   time to read: +6 min
Come December, oil prices in particular will come under pressure as the European Union imposes fresh sanctions on Russia. Oil prices are about to hit $120 a barrel, and they're likely going to stay high for two years. The Energy Aspects senior analyst said that Europe is facing troubling supply issues that are unlikely to go away anytime soon. "OPEC's been very protective of making sure there's a floor to prices," Gallarati said. What's something that you think could help ease oil prices heading into 2023?
☆ FTX collapse: The latest updates on the cryptocurrency crisis
  + stars: | 2022-11-14 | by ( Diksha Madhok | ) edition.cnn.com   time to read: +6 min
New Delhi CNN Business —Aftershocks from the massive earthquake in the trillion-dollar crypto industry last week continued to be felt on Monday. The episode has not just destroyed confidence in the crypto industry, but it will also embolden global regulators to tighten the screws. There is a “lot of risk,” said Changpeng Zhao, who runs the crypto exchange Binance. On Saturday, FTX said it was looking into whether crypto assets were stolen and has since moved all its digital assets offline. Crypto risk management firm Elliptic said although the theft was unconfirmed, $473 million in crypto assets were apparently stolen from FTX.
☆ How the smart money got fooled by Sam Bankman-Fried: Here's what happened to 2 hedge funds and a trader.
  + stars: | 2022-11-14 | by ( Dakin Campbell | ) www.businessinsider.com   time to read: +8 min
3 traders tell what drew them to FTX and how they now have money stuck inside it. Wintermute, a large crypto trading firm, stopped trading on FTX, but still had some funds stuck on the US exchange, CoinDesk reported. The three traders who spoke to Insider all acknowledged having some amount of money stuck inside FTX, despite some pretty sophisticated risk management strategies. FTX's collapse was precipitated when FTX sent billions of dollars to Alameda to cover losses, The Wall Street Journal reported. Bankman-Fried may now face charges for wire fraud, the Wall Street Journal reported this week after talking with securities lawyers about how the US laws might apply.
☆ Billions of dollars seem to have disappeared with the collapse of FTX. How does that even happen?
  + stars: | 2022-11-14 | by ( Matthew Fox | ) www.businessinsider.com   time to read: +4 min
The implosion of the FTX crypto exchange vaporized billions of dollars overnight. The disaster is being called crypto's Lehman Brothers moment, but Lehman had more than $600 billion in real assets that were salvageable. Sure, Lehman Brothers equity investors were completely wiped out, as will be the investors in FTX, but that's the risk equity investors assume when they buy in. According to a report from the Financial Times, FTX held less than $1 billion in liquid assets against $9 billion in liabilities. Compare that to Lehman Brothers going bankrupt with $639 billion in assets against $613 billion in debts.
☆ The Lehman Brothers of Crypto: Here's how the fall of Sam Bankman-Fried's FTX compares to the collapse that sparked the Great Financial Crisis
  + stars: | 2022-11-14 | by ( Phil Rosen | ) www.businessinsider.com   time to read: +7 min
It gives maybe the clearest, most entertaining breakdown of how many, many very bad bets on subprime mortgages kickstarted the 2008 Financial Crisis. The most serious domino to fall 14 years ago was Lehman Brothers, the classic too-big-to-fail behemoth that did in fact go under. All this is a roundabout way of saying the collapse of Sam Bankman-Fried's crypto exchange, FTX, is severe and dramatic enough to warrant its own movie in a few years. Reminisce with me for a moment: In the years leading up to 2008, Lehman Bros loaded up its balance sheet with huge amounts of subprime mortgage debt. Lehman went under, and the world sunk into its worst financial crisis since the Great Depression.
☆ Bahamian police reportedly interviewed Sam Bankman-Fried this weekend, investigations into downfall intensify
  + stars: | 2022-11-13 | by ( Bethany Biron | ) www.businessinsider.com   time to read: +2 min
Bahamian police questioned FTX founder Sam Bankman-Fried on Saturday, Reuters reported. The police say they are investigating if "criminal misconduct occurred" tied to the downfall of FTX. Bankman-Fried was rumored to have fled to Argentina earlier this weekend. The Royal Bahamas Police questioned Bankman-Fried to discover if any "criminal misconduct occurred," Reuters reported on Sunday. The Financial Times later reported that FTX held only $900 million in sellable assets against $9 billion in liabilities.
☆ Jim Cramer: Why the two-day rally to end last week is significant — and what to expect next
  + stars: | 2022-11-13 | by ( Jim Cramer | ) www.cnbc.com   time to read: +8 min
You would just stay mum, enabling investors to expect another raise of 75 basis points, especially if retail sales this week come in above expectations. The best that can be said, though, is that the two days up to end last week seem significant — especially in light of the collapse of FTX. As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade.
☆ The collapse of crypto firm FTX and its superstar founder explained: Here's what happened and what it all means
  + stars: | 2022-11-12 | by ( Avery Hartmans | ) www.businessinsider.com   time to read: +6 min
Two years later, Bankman-Fried and his team launched FTX, a crypto exchange platform with perks like low trading fees and advanced options for traders. At his peak, Bankman-Fried was worth $26 billion, though his net worth had dropped to $16 billion before this week. In early November, crypto publication CoinDesk released a bombshell report that called into question just how stable Bankman-Fried's empire really was. Now, the FTX drama is creating a ripple effect throughout the crypto industry. Industry experts told Insider that the saga might encourage regulators to try to crack down on the crypto industry, or make big banks wary of letting customers trade crypto.
☆ FTX says it's removing trading and withdrawals, moving digital assets to a cold wallet after a $477 million suspected hack
  + stars: | 2022-11-12 | by ( Mackenzie Sigalos | ) www.cnbc.com   time to read: +3 min
In this photo illustration, the FTX website is seen on a computer on November 10, 2022 in Atlanta, Georgia. Elliptic found that $663 million in various tokens were drained from FTX's crypto wallets. Of that amount, $477 million was taken in the suspected theft, while the remainder is believed to have been moved into secure storage by FTX. Miller, FTX's general counsel, said the decision to push digital assets into cold storage was meant "to mitigate damage upon observing unauthorized transactions." People who choose to hold their own cryptocurrency can store it "hot," "cold," or some combination of the two.
☆ The fall of crypto exchange FTX is 'worse than Theranos, worse than Madoff' as federal probes mount, former SEC official says
  + stars: | 2022-11-12 | by ( Brian Evans | ) www.businessinsider.com   time to read: +3 min
The fall of cryptocurrency exchange FTX has drawn numerous comparisons to the collapse of Lehman Brothers. But a former Securities and Exchange Commission official likened FTX to the Theranos and Bernie Madoff debacles. "This is worse than Theranos, this is worse than Madoff," John Reed Stark told Yahoo Finance. But a former Securities and Exchange Commission official likened FTX to the Theranos and Bernie Madoff debacles. Stark noted "sophisticated" FTX investors have had to write down their holdings, even after performing due diligence on its financials.
☆ Sam Bankman-Fried's sudden turn from white knight to washout
  + stars: | 2022-11-12 | by ( Hannah Lang | ) www.reuters.com   time to read: +3 min
But as traders rushed to withdraw funds from FTX, Bankman-Fried was in denial and told investors he was convinced the business would be rescued, according to a source familiar with the situation. Bankman-Fried also quickly became one of the largest Democratic donors in the United States, contributing $5.2 million to President Joe Biden's 2020 campaign. He amassed a fortune, estimated as high as $26.5 billion by Forbes a year ago, by taking advantage of the price differences in bitcoin in Asia and the United States. Bankman-Fried eventually started crypto trading firm Alameda Research in 2017 and founded FTX a year later. "I thought we would fail," Bankman-Fried said at a June conference weeks before FTX and Alameda extended lifelines to two struggling crypto platforms.
☆ Jeremy Siegel says the crypto meltdown sparked by FTX's implosion is not a Lehman Brothers moment and won't spread contagion to stocks
  + stars: | 2022-11-11 | by ( Matthew Fox | ) www.businessinsider.com   time to read: +2 min
The FTX implosion is not a Lehman Brothers moment that will spread risk to stocks, according to Jeremy Siegel. "It's not a Lehman moment because the value has already gone down so much," Siegel said. One thing traditional assets like stocks and bonds have that crypto doesn't is the backing of the Federal Reserve. As some people say, 'Is this a Lehman moment if it [prices] really goes down?' "One thing that's really important: back when Lehman went under, I had money in money market mutual funds.
☆ Crypto CEO warns his industry faces 2008-style crisis
  + stars: | 2022-11-11 | by ( Matt Egan | ) edition.cnn.com   time to read: +2 min
New York CNN —The reeling crypto industry faces a 2008-style crisis that will lead to a much-needed regulatory crackdown, crypto CEO Changpeng Zhao warned on Friday. We’ve been set back a few years,” Zhao, the CEO of cryptocurrency exchange Binance, said during a conference in Indonesia. “Regulators, rightfully, will scrutinize this industry much, much harder, which is probably a good thing to be honest,” Zhao said. The Binance CEO accused FTX of “misappropriating” user funds. Bankman-Fried, the 30-year-old crypto wunderkind behind FTX, said on Friday he’s “really sorry” about what happened at his firm.
☆ FTX's blowup is a turning point for Wall Street's crypto adoption journey
  + stars: | 2022-11-11 | by ( Dan Defrancesco | ) www.businessinsider.com   time to read: +6 min
But first, where does Wall Street go from here? A warning sign for Wall Street to get out now before it's in too deep. Insider's Rebecca Ungarino and Danielle Walker examined what the knock-on effects of FTX's blowup mean for Wall Street's crypto plans. A key part of Wall Street's adoption of crypto was working with intermediaries bridging the gap between the two worlds. Read more on how FTX's blow up might impact Wall Street' long-term crypto plans.
☆ Crypto's Lehman moment: Here's how Sam Bankman-Fried's FTX compares to the biggest collapse of the Global Financial Crisis
  + stars: | 2022-11-11 | by ( Phil Rosen | ) www.businessinsider.com   time to read: +7 min
Experts have drawn comparisons between the collapse of crypto exchange FTX and the fall of Lehman Brothers in 2008. Here's how the two events compare and what FTX's fall means for the broader financial system. In the years leading up to the Great Financial Crisis, Lehman loaded its balance sheet with vast amounts of subprime mortgage debt. When the "bank run" began this week, FTX didn't have the funds to meet withdrawal requests. But compared to 14 years ago, it probably won't be FTX's downfall that sparks a broader financial crisis, Allen said.
☆ Crypto: What's next as FTX collapse triggers 'Lehman moment'?
  + stars: | 2022-11-11 | by ( Julia Horowitz | ) edition.cnn.com   time to read: +7 min
And can the beaten-down crypto industry bounce back? What’s clear is that the fallout from the FTX crisis injects significant volatility into the crypto ecosystem. “Thank God!”Can the crypto industry survive? “In the short term, this is going to be really, really bad for the crypto industry,” said Jog of Sei Labs. Fok said he expects the FTX collapse will push institutional investors away from the crypto space just as they had been warming up to it.
☆ Recession-shy investors can turn to capital cycle
  + stars: | 2022-11-10 | by ( Edward Chancellor | ) www.reuters.com   time to read: +7 min
But another factor is the capital cycle: the amount of investment entering or exiting an industry. Capital spending by energy firms and miners has declined since the investment boom peaked in the middle of the last decade. Capital spending by large European oil companies has fallen from more than twice depreciation in the mid-2010s to less than one times, according to Bernstein. A similar picture emerges in the mining industry, whose capital spending boom also ended around eight years ago. Freeport-McMoRan (FCX.N), one of the world’s largest copper producers, cut capital spending from $7.2 billion in 2014 to $2.1 billion last year.
☆ Stocks making the biggest moves midday: Six Flags, Rivian, Bumble, Coinbase, Dutch Bros and more
  + stars: | 2022-11-10 | by ( Alex Harring | ) www.cnbc.com   time to read: +3 min
Coinbase – The cryptocurrency exchange was up 9.6% after Oppenheimer said Coinbase was well-positioned while the larger sector was having its "Lehman Brothers moment." Rivian – The electric vehicle maker jumped 18% after the company reported a smaller-than-expected quarterly loss and said its production would remain on track despite supply chain snafus. Bumble – Shares of the company known for its dating platforms added 6.4% even after Bumble issued a weak current quarter revenue forecast and missed expectations. ZipRecruiter – The hiring platform jumped 16.5% after it beat expectations for the quarter and raised its full-year forecast. Dutch Bros – Shares of coffee chain Dutch Bros surged 18.2% after the company reported solid quarterly earnings that beat Wall Street expectations.
☆ The tech boom is officially over - and the FTX fiasco will spark a crypto crackdown, ex-Treasury chief Larry Summers says
  + stars: | 2022-11-10 | by ( Theron Mohamed | ) www.businessinsider.com   time to read: +3 min
The tech boom is over, thanks to the pandemic receding and interest rates rising, Larry Summers said. The ex-Treasury chief predicted the FTX fiasco will lead to greater crypto regulation. He warned some of the recent excesses in the tech sector won't return until the next speculative boom, if at all. Investors need to reset their expectations after years of venture capitalists subsidizing companies' user acquisition with zero regard for profits or sustainable growth, he continued. Summers also touched on the financial troubles of Sam Bankman-Fried's FTX and Alameda Research, which have roiled cryptocurrency markets this week.
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