In today’s bitcoin and cryptocurrency news, read that as the turmoil in the market worsened over the weekend, digital currency prices dropped once more. The trillion dollar crypto business had a huge earthquake last week, and the aftershocks were still being felt on Monday. On the other hand, the CEO of the largest cryptocurrency exchange predicts “some cascading contagion consequences” from the demise of FTX, which had $32 billion in assets. Lastly, three sources close to the situation said that US and Bahamian authorities are discussing the possibility of bringing Sam Bankman-Fried to the US for questioning.
The Crypto Crisis Has Not Ended
Original Source: Crypto crisis continues. Here’s the latest on the FTX collapse
Monday saw aftershocks from last week’s crypto industry earthquake.
As the weekend situation developed, digital currency prices plunged again. Bitcoin has dropped 65% this year. According to CoinDesk, it was $16,500 on Monday. Analysts predict a drop below $10,000.
Ether, the second-most valuable cryptocurrency, is struggling. CoinDesk data indicated it was trading at $1,230 on Monday, down 20% in a week.
Investors are still reeling from FTX’s implosion, one of the industry’s top players.
Some insiders say the company’s downfall caused a “Lehman moment,” referring to the 2008 collapse of the investment bank.
The event has undermined crypto industry confidence and emboldened worldwide regulators to crack down. Some of the industry’s greatest stars said they welcome criticism if it helps restore credibility.
Binance’s CEO stated there’s “a lot of danger.” “We’ve seen the industry go crazy in the past week, so we need restrictions,” he said.
CZ spoke Monday in Indonesia. Last week, he said comparing the current crypto upheaval to 2008 is “probably accurate.”
Binance had a tentative rescue deal with FTX last week, but it fell through.
After declaring for bankruptcy on Friday, FTX’s decline continued. Another industry giant admits to misusing funds, spooking investors.
Here’s how the problem has evolved in recent days.
FTX shifted its headquarters from Hong Kong to The Bahamas last year, with previous CEO Sam Bankman-Fried hailing it as “one of the few areas to set up a comprehensive crypto infrastructure.”
Bahamas officials are investigating possible criminal activities regarding the company’s implosion.
In light of FTX’s global collapse and FTX Digital Markets Ltd.’s provisional liquidation, financial investigators from the Financial Crimes Investigation Branch are working with the Bahamas Securities Commission to investigate criminal activity.
It’s unclear which component of FTX’s failure is being investigated.
The exchange’s 30-year-old founder, Bankman-Fried, amassed a $25 billion fortune that has since gone. He was seen as the crypto world’s white knight, rescuing enterprises when the TerraUSD stablecoin collapsed in May.
FTX is supported by prominent investors like BlackRock and Sequoia Capital. The Wall Street Journal revealed Thursday that its collapse was anticipated by the decision to lend billions of dollars in client assets to finance Alameda, Bankman-crypto Fried’s hedge fund.
Hacking
The Bahamas inquiry came a day after the insolvent exchange announced its own.
FTX announced Saturday it was investigating stolen crypto assets. Elliptic reported $473 million in FTX crypto assets were stolen.
FTX General Counsel Ryne Miller said the corporation pulled all digital assets offline on Friday. Friday night’s process was sped up “to prevent damage from fraudulent transactions.”
Miller stated FTX was “investigating irregularities” in crypto wallet movements tied to exchange consolidation.
He stated that the company will disclose additional information soon.
Binance caution, accidental transfers
Singapore-based Crypto.com sent $400 million in ether to the wrong account.
CEO Kris Marszalek claimed 320,000 ETH was transferred three weeks ago to a corporate account at Gate.io instead of one of its offline, or “cold,” wallets.
Users are withdrawing funds from the platform, thinking it will fail like FTX.
Marszalek tweeted Sunday that the company has improved its internal transfer process. According to CoinDesk, the platform’s native coin fell 20% in 24 hours.
Marszalek said his firm has been a “responsible, regulated player since creation” and will “prove all the doubters wrong”
He said that Crypto.com’s business model is “totally different” from FTX’s.
We don’t run a hedge fund or trade customer assets, he said.
Marszalek said his company will soon publish a reserve audit.
Binance CEO Zhao said controlling the industry won’t be easy in Bali.
Authorities’ “natural response is to steal restrictions from established financial systems,” he said.
“It’s typical for a bank to invest user assets to generate a profit,” he said. If a crypto exchange works that way, he said, it will fail. The sector must protect consumers, he said.
“Regulators… No player can be protected, he remarked.
Binance CEO Warns of Crypto Market ‘cascading Contagion’
Original Source: Cryptocurrency market at risk of ‘cascading contagion’, warns Binance chief
The CEO of the world’s largest cryptocurrency trading company warns of “cascading contagion repercussions” from FTX’s collapse.
Binance CEO Changpeng “CZ” Zhao, who walked out of talks to save FTX last week before it crumbled, said: “There will be a few additional people with money on FTX that may give them trouble.”
Mr Zhao dropped out of last-minute efforts to rescue FTX last week, citing “claims of mishandled customer monies and purported US government probes.”
FTX, a Bahamas-based cryptocurrency fund, filed for bankruptcy in the US after restricting withdrawals.
Sam Bankman-30-year-old Fried’s FTX collapsed with $9bn in liabilities. As part of a web of more than 130 companies operated from a multi-million-pound mansion in the Bahamas, the exchange reportedly lent client funds to its sister trading company, Alameda Research, to prop up its losses on high-risk crypto bets.
Mr. Bankman-Fried, known as “SBF,” blamed the collapse on “bad internal labeling” Later, he said, “I’m piecing together the details, but I was stunned by what happened this week.”
Other cryptocurrency exchanges and trading organizations used FTX’s goods for deposits or trades, posing risks. Digital currencies sold off sharply after the crisis. Bitcoin is down 20% this month after FTX’s troubles. FTT, the company’s digital token, lost 90% of its value.
Mr Zhao believes “the biggest impact is… Could be wrong
Regulators in the US Talk About Interrogating Bankman-Fried
Original Source: FTX Latest: Regulators Discuss Questioning Bankman-Fried in US
The Supreme Court of the Bahamas appointed PricewaterhouseCoopers partners provisional liquidators to supervise FTX’s assets. Other crypto billionaires are avoiding Sam Bankman-failing Fried’s FTX exchange.
Bitcoin stabilized Tuesday, trading under $17,000, after a selloff caused by the FTX issue.
US regulators consider SBF (3:19 p.m.)
US and Bahamian authorities are reportedly exploring transporting Sam Bankman-Fried to the US for interrogation.
Law enforcement officials in the two nations are investigating his role in the collapse of cryptocurrency startup FTX. One person, who wanted not to be identified owing to the delicacy of the subject, claimed Bankman-Fried had been collaborating with Bahamian authorities.
SBF Regulators Meeting (2:58 p.m.)
Fried tweeted that he’s meeting with regulators to “do right by customers.”
Tweet: FTX Could Repay Customers (12:17 p.m.)
Bankman-Fried tweeted that FTX US had enough to refund all customers “post-11/7.” “Not everyone agrees,” he said.
Void Voyager crypto lender deal (11:48 a.m.)
A lawyer for Voyager Digital says the bankrupt crypto lender has no plans to sell to FTX after the exchange entered insolvency.
Voyager’s bankruptcy attorney says FTX broke its deal to buy the company out. Sussberg said in court Tuesday that FTX has agreed Voyager can seek other bids but hasn’t indicated it’s backing out of the deal to buy the smaller crypto startup.
PwC liquidated (9:35 a.m.)
The Supreme Court of the Bahamas appointed PricewaterhouseCoopers as provisional liquidators for FTX.
The Bahamas Securities Commission said it “acted quickly” to protect clients.
Scaramucci considers Zhao’s sale retaliation (9:28 a.m.)
FTX controls 30% of Scaramucci’s company, thus he accompanied Bankman-Fried on a recent fundraising trip to the Middle East. Scaramucci stated Bankman-Fried made unspecified remarks about Zhao.
“I think he stated something about CZ, the creator of Binance, in one or two of those meetings,” Scaramucci claimed. Twitter comment: “OK, we’re divorcing, we’re not making love.” 500 million FTT tokens.
After Zhao’s Nov. 6 tweet announcing the sale of FTT tokens worth $530 million at the time, clients removed $5 billion from FTX in a day. FTX went insolvent last week.
A Binance official said FTX’s difficulties stemmed from misuse of user assets and its highly leveraged business. Binance sold FTT after a Nov. 2 CoinDesk report questioned Alameda Research’s balance sheet, a representative said.
“CZ’s tweet occurred after the community questioned questions about a high volume of FTT,” a Binance spokeswoman said. FTX’s spokesman didn’t immediately comment.
Daniel Trinder, Binance’s vice president of government affairs in Europe, told the UK Treasury Committee on Monday that the company will explain its decision to sell FTT.
Summary of today’s bitcoin and cryptocurrency news
In summary, after declaring bankruptcy last Friday, FTX’s fortunes have only gotten worse since then. Another industry heavyweight has come clean about mishandling investor money, and the mood is getting gloomier by the day. What has happened over the past few days demonstrates that the crisis is only getting started.
On the other hand, With “claims regarding mishandled customer cash and purported US agency investigations,” Mr. Zhao backed out of rescue talks for FTX last week, just before the exchange collapsed. After restricting withdrawals and failing to honor billions of pounds in withdrawals, FTX, a cryptocurrency fund domiciled in the Bahamas, filed for bankruptcy protection in the United States. According to Mr. Zhao, “the major impact is probably out… I could be very wrong here.”
Lastly, in recent days, law enforcement officials in the two nations have been communicating more often as they investigate his participation in the collapse of cryptocurrency startup FTX. One of the sources, who like the others preferred not to be identified owing to the delicacy of the situation, indicated that Bankman-Fried has been collaborating with Bahamian authorities.
