FTX.US

Scaramucci to invest in crypto firm founded by former FTX US boss

It is understood the crypto software company will enable crypto traders to create algorithmic-based strategies to access different markets.

SkyBridge Capital founder Anthony Scaramucci is investing in a crypto company founded by the former president of FTX US.

Scaramucci told Bloomberg in an email that he would be investing his own personal funds to support ex-FTX US president Brett Harrison’s new venture, which was revealed just three weeks after the collapse of crypto exchange FTX.

It is understood that the crypto software company — which doesn’t yet have a name — will enable crypto traders to create algorithmic-based strategies to access different markets, both centralized and decentralized.

It is also understood that Harrison has been seeking a fundraising target as high as $10 million for a $100 million valuation.

In a Jan. 14 tweet responding to Harrison’s lengthy thread on Sam Bankman-Fried and his time at FTX US, Scaramucci said he was “proud” to be an investor in Harrison’s new company.

Harrison replied to the tweet thanking Scaramucci, adding that “Your support and advice means the world to me. I can’t wait to work together!”

The amount of capital deployed and stake received by Scaramucci was not disclosed, however.

Harrison’s new crypto venture was first hinted at on Sept. 27, when he announced thahe was stepping down from his role as president of FTX US.

At the time, he said he was resigning his position as president but will remain with the exchange in an advisory role for the next few months.

“I can’t wait to share more about what I’m doing next,” he said at the time.

In his most recent Twitter thread, Harrison revealed that he left the firm after his relationship with Bankman-Fried abruptly deteriorated and that the troubles led him to shift his “focus to the future and to my own company.”

Related: Skybridge eyes stake buyback from FTX, as Galaxy CEO says he would like to ‘punch’ SBF

Meanwhile, Scaramucci continues to have high hopes for crypto market recovery this year, describing 2023’s market outlook as a “recovery year.”

In an interview with CNBC on Jan. 15, the crypto investor said he expects Bitcoin (BTC) to rebound to the $50,000-100,000 range within the next two to three years.

“You are taking on risk but you’re also believing in [Bitcoin] adoption. So if we get the adoption right, and I believe we will, this could easily be a fifty to one hundred thousand dollar asset over the next two to three years,” he added.

At time of publication, Bitcoin was currently trading at $21,240, up 21.77% over the last week.

Former FTX US President lashes out at ‘insecure’ SBF in 49-part Twitter thread rant

Harrison said Bankman-Fried threatened to fire him on the spot and would destroy his professional reputation if he continued to confront the former FTX CEO.

Former FTX US President Brett Harrison has lashed out at Sam Bankman-Fried for manipulating and threatening colleagues who proposed solutions to reorganize FTX US’ management structure. 

Harrison shared his experiences with Bankman-Fried and FTX US on Dec. 14, explaining how he was hired “casually over text” in Mar. 2021 after working together at New York-based trading firm Jane Street for a few years.

But six months into Harrison’s tenure at FTX US, “cracks began to form” between the two, he said.

Despite recalling Bankman-Fried to be a “sensitive and intellectually curious person” at first, Harrison said he saw “total insecurity and intransigence” in Bankman-Fried when confronted with conflict, particularly when Harrison suggested FTX US establish separate branches for its executive, developer and legal teams.

Harrison added that he “wasn’t sure what accounted for the dramatic change” in Bankman-Fried’s erratic behavior, though he suspected mental health issues may have been a “contributing factor.” 

Part of that irrational behavior Harrison describes included a series of gaslighting and manipulation tactics Bankman-Fried used against Harrison and other colleagues in their bid to clean up FTX US’ corporate mess.

Harrison also recalled his last attempt to fix FTX US’ organization issues with Bankman-Fried, claiming that he threatened to “destroy my professional reputation” if a formally apology wasn’t received:

Harrison said that event “solidified” his decision to leave.

Related: FTX ex-staffer: Extravagant expenditures and cult-like worshipping of SBF

As for the fraud charges now laid against Bankman-Fried and other FTX colleagues, Harrison said he was blinded by the firm’s alleged commingling and misuse of billions of dollars of customer funds:

“I never could have guessed that underlying these kinds of issues — which I’d seen at other more mature firms in my career and believed not to be fatal to business success — was multi-billion-dollar fraud.”

“If any one of us had suspected let alone learned the truth, we would have reported them immediately,” he added.

Bankman-Fried was granted bail after posting a $250 million bond guarantee and pleading not guilty to all eight criminal charges laid against him on Jan. 3.

Harrison stepped down as FTX US President on Sept. 27 — about five weeks before FTX catastrophically collapsed — where he stated that he moved into an advisory role.

Former FTX US President lashes out at ‘insecure’ SBF in 49-part Twitter thread rant

Harrison said Bankman-Fried threatened to fire him on the spot and would destroy his professional reputation if he continued to confront the former FTX CEO.

Former FTX US President Brett Harrison has lashed out at Sam Bankman-Fried for manipulating and threatening colleagues who proposed solutions to reorganize FTX US’ management structure. 

Harrison shared his experiences with Bankman-Fried and FTX US on Jan. 14, explaining how he was hired “casually over text” in March 2021 after working together at New York-based trading firm Jane Street for a few years.

But six months into Harrison’s tenure at FTX US, “cracks began to form” between the two, he said.

Despite recalling Bankman-Fried to be a “sensitive and intellectually curious person” at first, Harrison said he saw “total insecurity and intransigence” in Bankman-Fried when confronted with conflict, particularly when Harrison suggested FTX US establish separate branches for its executive, developer and legal teams.

Harrison added that he “wasn’t sure what accounted for the dramatic change” in Bankman-Fried’s erratic behavior, though he suspected mental health issues may have been a “contributing factor.” 

Part of that irrational behavior Harrison describes included a series of gaslighting and manipulation tactics Bankman-Fried used against Harrison and other colleagues in their bid to clean up FTX US’ corporate mess.

Harrison also recalled his last attempt to fix FTX US’ organization issues with Bankman-Fried, claiming that he threatened to “destroy my professional reputation” if a formally apology wasn’t received:

Harrison said that event “solidified” his decision to leave.

Related: FTX ex-staffer: Extravagant expenditures and cult-like worshipping of SBF

As for the fraud charges now laid against Bankman-Fried and other FTX colleagues, Harrison said he was blinded by the firm’s alleged commingling and misuse of billions of dollars of customer funds:

“I never could have guessed that underlying these kinds of issues — which I’d seen at other more mature firms in my career and believed not to be fatal to business success — was multi-billion-dollar fraud.”

“If any one of us had suspected let alone learned the truth, we would have reported them immediately,” he added.

Bankman-Fried was granted bail after posting a $250 million bond guarantee and pleading not guilty to all eight criminal charges laid against him on Jan. 3.

Harrison stepped down as FTX US President on Sept. 27 — about five weeks before FTX catastrophically collapsed — where he stated that he moved into an advisory role.

SEC files objection to Binance.US’s plans to acquire Voyager Digital

The SEC wants to see more information included in the $1.022 billion deal between Binance’s U.S. arm and Voyager Digital before it agrees to the acquisition.

The United States Securities and Exchange Commission (SEC) has filed a “limited objection” to crypto exchange Binance.US’s proposed $1 billion takeover of bankrupt crypto lender Voyager Digital, citing a lack of “necessary information.”

The limited objection was filed on Jan. 4, with the SEC pointing to a lack of detail regarding Binance.US’s ability to fund the acquisition, what Binance.US’s operations would look like following the deal, and how customer assets will be secured during and after the transaction.

A limited objection is similar to a normal objection but only applies to a specific part of the proceedings.

Additionally, the regulator also wants Voyager to provide more detail on what would happen should the transaction not be consummated by April 18.

In its filing, the SEC said it already communicated its concerns with Voyager and the lender intends to file a revised disclosure statement prior to a hearing on the matter.

Some commentators interpreted the objection as the SEC suggesting Binance.US would not be able to afford the acquisition without “some untoward dealing” such as receiving funds from Binance’s global entity.

While Binance CEO Changpeng Zhao (CZ) has publicly stated that Binance.US was a “fully independent entity,” an Oct. 17 Reuters report alleged that the U.S. entity acts more like a “de facto subsidiary” that was created to “insulate Binance from U.S. regulators.”

In response, CZ argued in an Oct. 17 blog post that Binance was committed to complying with regulators, that the author of the article was reporting in a biased manner and had used a presentation provided by an external consultant that was never implemented.

Related: ‘Binance is the crypto market:’ Arcane crowns the exchange 2022’s winner

Voyager announced on Dec. 19 that it had agreed to Binance.US’s bid to acquire its assets, in a deal worth $1.022 billion in total.

The lender noted in a press release that the bid was the “highest and best bid for its assets,” which would maximize the value returned to customers and creditors “on an expedited timeframe.”

Voyager announced on Sept. 27 that FTX.US had won the auction for its assets with an offer of $1.4 billion, which would have seen customers recover 72% of their frozen crypto, a deal that has since fallen through.

Texas to probe FTX endorsements by Tom Brady, Stephen Curry and other celebs

The Texas State Securities Board is scrutinizing payments received by celebrities to endorse FTX US as part of a wider probe into FTX’s collapse.

NFL quarterback Tom Brady and NBA point guard Stephen Curry are reportedly among the celebrities facing a probe from the Texas financial regulator over their promotion of the now-bankrupt crypto exchange, FTX. 

Joe Rotunda, director of enforcement at the Texas State Securities Board, reportedly told Bloomberg in a Nov. 22 report that the Texas State Securities Board is scrutinizing payments received by celebrities to endorse FTX US, what disclosures were made and how accessible they were for investors.

Rotunda however noted that while the watchdog was taking a “close look at them,” the celebrities’ endorsements of FTX were not an “immediate priority,” but would be part of the “regulator’s larger probe into FTX’s collapse.”

Both Brady and Curry have also been named in a Nov. 15 class-action lawsuit against FTX, along with former FTX CEO Sam Bankman-Fried.

The lawsuit alleged that they “controlled, promoted, assisted in, and actively participated” in FTX Trading LTD and West Realm Shires Services Inc.

Others named in the class action include model Gisele Bündchen, the Golden State Warriors basketball team, NBA player Udonis Haslem and co-creator of Seinfeld Larry David.

Cointelegraph reached out to the Texas State Securities Board for comment but did not receive a reply before publication.

Related: The SEC should be aiming at Do Kwon, but it’s getting distracted by Kim Kardashian

In the past, surveys have found that nearly half of retail investors will follow digital asset advice from the social media accounts of celebrities and influencers without question, and this has seen more than a few use their influence to shill crypto products and projects.

In October, reality TV star Kim Kardashian was fined by the United States Securities and Exchange Commission (SEC) for “touting on social media” about the EMAX without disclosing she was paid $250,000 to post about it.

Kardashian has neither admitted to nor denied the SEC’s allegations, but settled the charges and agreed not to promote any cryptocurrency assets until 2025.

BlockFi limits platform activity, including a halt on client withdrawals

“We intend to communicate as frequently as possible […] but anticipate that this will be less frequent than what our clients and other stakeholders are used to.”

Crypto lender BlockFi has halted client withdrawals on its platform as part of a broader limit on platform activity in the wake of FTX’s collapse.

The company said in a Nov. 11 tweet that a “lack of clarity on the status of FTX.com, FTX US and Alameda” has prevented it from being able to operate as normal.

As a result, it has limited platform activity until there is further clarity on the developing situation, it said. 

The firm has also requested that clients do not deposit to BlockFi wallets or Interest Accounts at this point in time.

It comes only days after a Twitter thread in which BlockFi founder and chief operating officer Flori Marquez on Nov. 8 assuring users that all BlockFi products were fully operational, as they have a $400 million line of credit from FTX US, which is a separate entity from the one affected by a liquidity crunch.

Marquez’s comment that BlockFi “will remain an independent entity until at least July 2023” is likely a reference to the deal with FTX US that provided them with the line of credit, in which FTX US was provided an option to acquire BlockFi for a variable price up to $240 million. 

However, recent developments from FTX US, in which a banner at the top of the FTX US website said “trading may be halted on FTX US in a few days,” has raised questions about the financial impact the fallout of FTX has had on its United States arm.

Related: FTX US resigns from the Crypto Council for Innovation

The crypto community has not taken well to the abrupt change in language coming out of BlockFi, who had just 12 hours earlier assured customers that “all crypto transactions, including withdrawals, would continue as normal.” 

Kevin Paffrath, CEO of HouseHack and a YouTuber with 1.85 million subscribers, pointed out a similar u-turn in Sam Bankman-Fried’s public comments in the lead-up to the FTX fallout.


Sam Bankman-Fried sheds light on how FTX would approach a Celsius bid

The FTX founder said the company paid the “fair market price” for Voyager’s assets and would look to do the same in a deal for Celsius’ assets.

FTX founder and CEO Sam Bankman-Fried has shared details on how his firm would approach a buy-up of Celsius’ assets.

The comments come in light of FTX US snapping up bankrupt crypto lender Voyager Digital’s assets for $1.3 billion via auction last week and a recent report that FTX was considering a bid for Celsius’ assets as well.

Responding to a tweet from BnkToTheFuture founder Simon Dixon alleging FTX was “raising finance at a $32Billion valuation” in order to buy Celsius’ assets at “cents on the dollar,” Bankman-Fried clarified that his firm’s bid is determined at “fair market price, no discounts.”

Bankman-Fried said his company’s goal “isn’t to make money buying assets at cents on the dollar,” and is instead focused on making customers whole again, stating:

“[The] goal isn’t to make money buying assets at cents on the dollar, it’s to pay $1 on the $1 and get the $1 back to customers. If we were to get involved in Celsius, it would be the same.”

Reports that FTX had secured the winning bid for the assets of Voyager Digital first emerged on Sept. 27, with the deal reportedly valued at $1.4 billion.

Little information was given around the fate of Voyager customers and their crypto holdings, with the platform only mentioning that the FTX US platform “will enable customers to trade and store cryptocurrency after the conclusion of the company’s chapter 11 cases.“

However, Celsius’ depositors appear to be in a worse state of limbo at this stage, though there is a general feeling that the firm could look to auction off its billions of dollars worth of assets, although other plans could be floated, such as a customer repayment in Celsius (CEL) tokens.

Related: Celsius founder reportedly withdrew $10M before bankruptcy filing: FT

Much of this will weigh on how Celsius bankruptcy proceedings play out moving forward, with an independent examination in the works to determine the scope of the beleaguered firm’s financials.

Multiple regulators have submitted objections to Celsius selling off its stablecoin holdings, while the Department of Justice has also objected to the firm’s motion to open up withdrawals to certain customers until the examiner report is complete.

FTX US wins auction for Voyager Digital’s assets

Voyager hints that its customers will eventually transition to the FTX platform after it finishes its Chapter 11 bankruptcy proceedings.

Cryptocurrency exchange FTX US has secured the winning bid for the assets of crypto brokerage firm Voyager Digital, to be approved by the United States Bankruptcy Court, with a bid valued at approximately $1.4 billion, according to Voyager.

Voyager said the bid was made up of the fair market value of its crypto holdings “at a to-be-determined date in the future” estimated to be around $1.3 billion along with $111 million of what it says is “incremental value,” but did not provide further details.

Little information was given regarding what will happen to Voyager customers still awaiting access to their crypto holdings, with Voyager stating additional information about crypto access “will be shared as it becomes available.”

Voyager only mentioned that the FTX US platform “will enable customers to trade and store cryptocurrency after the conclusion of the company’s chapter 11 cases.“

Cointelegraph contacted FTX and Voyager Digital for further comment but did not immediately hear back.

The sale of the assets is set to be completed after a chapter 11 plan, and an asset purchase agreement is submitted for approval by the U.S. Bankruptcy Court for the Southern District of New York on Oct. 19.

Cointelegraph earlier reported that crypto platforms Binance and CrossTower also submitted bids alongside FTX to acquire Voyager’s assets, each proposing their own terms.

A source claimed Voyager customers would receive their pro rata share of crypto assets and transition to the FTX platform if its bid was successful.

Related: Sam Bankman-Fried denies report FTX plans to purchase stake in Huobi

Voyager entered into a Chapter 11 bankruptcy on July 5, sometimes called a “reorganization” bankruptcy, it allows a firm to retain control of its assets and continue operating whilst it plans to restructure or sell the business.

The filing was for an insolvency worth over $1 billion after crypto hedge fund Three Arrows Capital (3AC) defaulted on a $650 million loan from the firm, Voyager says its claims against 3AC remain with the bankruptcy estate.

The company maintains its chapter 11 filing was “aimed at returning maximum value to customers” and also considered a reorganization, but stated the sale to FTX US was the “best alternative for Voyager stakeholders.”