FTX

Spreading misinformation about Changpeng Zhao ‘was the norm’ for SBF, says Binance CSO

Binance chief strategy officer Patrick Hillmann claimed former FTX CEO Sam Bankman-Fried was “constantly” using his platform to disparage CZ without considering the FTX Token sale.

Former FTX CEO Sam Bankman-Fried used Twitter and other means to spread “fake rumors” about Binance CEO Changpeng “CZ” Zhao, according to a Binance executive.

In an April 21 Twitter thread, Patrick Hillmann — the chief strategy officer at Binance — said Bankman-Fried, also known as “SBF,” used his influence to label CZ as an “evil Chinese” through “fake rumors” to perpetuate his alleged scams at FTX. Prior to and following FTX filing for bankruptcy in November 2022, SBF and CZ’s public relationship was often antagonistic, though the two exchanges had financial ties.

“Sam denigrating CZ was the norm for us,” said Hillman. “Had nothing to do with deciding to sell the worthless FTT on the company’s books.”

In November, CZ announced plans for Binance to liquidate its position in FTX Token (FTT) prior to FTX’s bankruptcy, hinting that Binance would consider purchasing the competitor. When the deal fell apart and FTX filed for Chapter 11, the two industry heads traded barbs through social media, with CZ calling SBF a “fraudster” and the former FTX CEO suggesting that Zhao lied about the buyout discussions.

Related: New FTX documentary to spotlight SBF-CZ relationship

Zhao continues to lead Binance as CEO and regularly posts messages on social media amid changes to the regulatory environment for crypto firms. Bankman-Fried, in contrast, faces 13 federal charges, including those related to bribery and wire fraud, and has only limited internet access as part of his bail conditions.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

$190B Ontario pension says no to crypto after FTX investment loss

The pension fund had invested twice in the now-bankrupt crypto exchange, once during the peak of the bull run in 2021 and again in early 2022.

The Onatario Teachers’ Pension Plan has decided to steer its investment away from cryptocurrencies. 

The decision comes after the OTPP — which manages over $190 billion in assets  — lost the entirety of its $95 million investment in crypto exchange FTX after it went bust in November 2022.

OTPP was one of the many backers of the now-bankrupt crypto exchange and had invested twice: Once during the bull market in 2021 and again during exchange’s Series C funding round in early 2022.

OTPP chief executive Jo Taylor said in an interview with the Financial Times that it’d be unwise for the pension fund to rush into another crypto investment. Taylor said that they are still processing what happened with the exchange, and they would be much more cautious before investing in emerging assets like digital currencies. The pension fund is responsible for offering pensions to over 330,000 teachers and school workers.

“We took our time and did a lot of due diligence on the business. It didn’t turn out the way we thought. We weren’t necessarily shown all the information we needed to know to make a balanced decision.”

The pension fund is now looking to direct its investment toward more traditional markets, such as real estate, and is aiming to gain exposure to the private credit sector. The investment plan provider is looking to invest 10 billion Canadian dollars ($7.4 billion) over the next three years to build its portfolio in the aforementioned domains.

Related: Virginia county wants to put pension funds into DeFi yield farming

Apart from OTPP, the Caisse de dépôt et placement du Québec (CDPQ), another prominent pension fund, lost its entire investment of $154.7 million in thetroubled cryptocurrency lender Celsius Network. Celsius was one among many crypto lenders that went under during the crypto contagion in the second quarter of 2022.

The dramatic collapse of FTX, at the time the third-largest crypto exchange, had a drastic impact on the entire ecosystem. The confidence of investors and venture capitalists in the crypto ecosystem reached a low point while crypto funding dried up. It also flipped the crypto ecosystem’s narrative on mass adoption and attracted regulatory scrutiny from around the world.

Magazine: Green consumers want supply chain transparency via blockchain

FTX has recovered $7.3B in assets, will consider rebooting exchange

Sam Bankman-Fried’s failed cryptocurrency exchange filed for bankruptcy in November 2022 and has since been mired in court proceedings.

Cryptocurrency exchange FTX may be considering restarting in the future, according to the legal team behind the debtors.

In an April 12 hearing in the United States Bankruptcy Court for the District of Delaware, lawyers with Sullivan & Cromwell representing FTX said the crypto firm had recovered roughly $7.3 billion in liquid assets. A March filing from the debtors reported the four FTX company silos had roughly $4.8 billion in scheduled assets as of November 2022, with an investigation into the assets ongoing.

According to the legal team, FTX will also consider restarting its crypto exchange operations sometime in the second quarter of 2024 — suggesting a reboot as early as April. FTX CEO John Ray was reportedly mulling reviving the bankrupt exchange in a January interview.

The price of the FTX Token (FTT) surged from $1.32 to $2.80 at roughly the same time lawyers announced the potential reboot of the exchange — an increase of more than 112%. The token price had largely stayed between $1 and $2 since the firm’s bankruptcy filing.

At the same hearing, the bankruptcy judge denied a motion that would have allowed the court to prioritize reimbursing former FTX CEO Sam “SBF” Bankman-Fried’s legal fees. He left the door open for SBF to present evidence to the court in the future regarding the motion.

“Frankly, I have zero evidence to establish cause here,” said Judge John Dorsey. “Mr. Bankman-Fried did not put out any evidence whatsoever as to the balancing of the equities here, what harm is going to occur to him. I don’t know what other insurance policies he has access to, I don’t know what other assets he has access to privately that would allow him to cover these costs and then recover them later under this policy.”

Related: SBF says Sullivan & Cromwell contradicted itself with insolvency claims

The bankruptcy court proceedings followed the debtors’ announcement that a Swiss court had granted a petition allowing the sale of FTX Europe AG, the firm’s European arm. FTX Europe AG, along with 133 other subsidiaries, was part of FTX’s Chapter 11 filing in U.S. bankruptcy court in November 2022.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

Update (April 12 at 6:17 pm UTC): An earlier version of this article said FTX would consider rebooting in the second quarter of 2023, which was incorrect. The correct year is 2024.

Swiss court gives green light for FTX to sell its European arm

The approval of a petition in Switzerland allowing FTX Europe AG’s sale would be in accordance with U.S. bankruptcy court, where FTX’s global business filed for Chapter 11.

According to bankruptcy cryptocurrency exchange FTX, a court in Switzerland has approved a petition allowing the firm to potentially sell its European business.

In an April 12 announcement, FTX said a Swiss court granted a petition filed by the board of directors for FTX Europe AG regarding a moratorium proceeding. As part of the legal process, FTX’s European arm would be allowed to “facilitate the exploration of strategic alternatives, including the previously disclosed potential sale of its business” in accordance with United States bankruptcy court.

FTX Europe AG was part of FTX’s Chapter 11 filing in U.S. Bankruptcy Court for the District of Delaware in November 2022. In March, the exchange’s European business launched a website allowing customers to submit withdrawal requests for the first time since the business declared bankruptcy.

Related: FTX customers want more info on FTX’s plans to sell subsidiaries

Former FTX CEO Sam Bankman-Fried will face criminal and civil cases in the U.S. for his alleged role in committing fraudulent activities at the crypto exchange. Bankman-Fried has pleaded not guilty to 13 federal charges and his trial is expected to start in October.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

FTX’s bankruptcy lawyers and advisers pocket $32.5M in February

The reimbursement expenses for FTX’s massive team of legal professionals are just as exorbitant in February as they were the previous month.

February’s round of legal expenses for bankrupt crypto exchange FTX has been published, and it remains a scary figure for debtors.

A series of court filings from April 4 to April 10 detailed the monthly fee statements for February of the law firms involved with FTX’s bankruptcy proceedings, which come to a combined total of around $32.5 million.

The figure didn’t include the recompense for restructuring chief and CEO John J. Ray III, who pocketed $305,000 in February, according to a March court filing.

Ray’s remuneration for March came in at a similar figure, with an April 10 filing showing his total fees and expenses were $329,173.

The FTX chief billed at $1,300 per hour and reported working 255.9 hours for the period of March 1 to March 31. This makes his fees a whopping $327,470, with the remaining $1,703 for airfares, lodging, transport, meals and other expenses.

John J Ray III’s expenses and hourly billings for the month of March. Source: Kroll

The law firm Quinn Emanuel Urquhart and Sullivan sought a total of over $2.7 million in reimbursements for February. Partners at the firm billed between $1,246 and $1,917 per hour and associates billed between $747 and $1,183 per hour. The total number of hours billed for the firm was nearly 2,610.

Source: Kroll

April 4 filings for the law firm Alvarez and Marsal and forensic investigation consultant Alix Partners detailed their February fee statements totaled over $11.9 million and around $3.6 million, respectively.

The largest amount sought was from law firm Sullivan and Cromwell, which billed a total of over $13.4 million for work carried out for FTX in February by their burgeoning team of lawyers and associates.

Sullivan and Cromwell’s employees collectively spent over 12,000 hours working on FTX in February. Source: Kroll

Meanwhile, on the lower end of the scale, investment banking firm Perella Weinberg Partners billed $77,891, while bankruptcy co-council Landis Rath and Cobb invoiced $582,604 for February.

Related: FTX financial controls were a ‘hodgepodge’ of apps, says court filings

Advisors and lawyers for the bankrupt exchange billed a similar amount in January, with FTX shelling out $34.18 million for their combined services in January, according to earlier court documents.

The fees, reimbursements, and expenses that FTX has forked out to its phalanx of lawyers, associates, paralegals, accountants, investigators, directors and executives remain tough to swallow for customers still waiting for recompense.

The bankruptcy is far from over, and it’s reported that Sullivan and Cromwell alone will reap hundreds of millions of dollars before the firm’s bankruptcy investigation wraps up.

Feature: All rise for the robot judge: AI and blockchain could transform the courtroom

FTX philanthropic donations have created a complex dilemma for recipients

University-affiliated research initiatives received more than $13 million in grants from the FTX Future Fund, with several students getting $100,000 in grants.

The collapse of the FTX exchange and its subsidiaries in November 2022 also led to the shutdown of its philanthropic arm, FTX Future Fund. The philanthropic arm had pledged $1 billion in donations toward research academics across prestigious universities. However, the team behind the project resigned after FTX filed for bankruptcy on Nov. 11, 2022.

Many scholars and researchers who were early recipients of the grant are now stuck in limbo over payment of further grants for their programs. According to a report published by Reuters, many students studying on the FTX grant were forced to drop out of their courses due to the fear of repayment.

A summary of the FTX Future Fund’s activities revealed that former CEO Sam Bankman-Fried sponsored the fund. The grants were focused on research projects for the safe development of artificial intelligence, reducing catastrophic bio-risk, improving institutions, economic growth, great power relations and effective altruism, among many others.

According to the report, 20 academics from prestigious colleges, including Cornell, Princeton, and Brown universities in the United States, as well as Cambridge in Britain, received grants from the FTX philanthropy arm totaling more than $100,000 each. Further calculations based on these announcements suggest university-affiliated research initiatives got a total of more than $13 million.

Related: Names of non-US FTX users demanded by mainstream media outlets

Many of these academics who received the first grant have now found themselves in a tricky situation with the next due date for fee submission already passed. As a result, many students were forced to drop out of the program after the first year.

Others who did receive a full grant have found themselves in an ethical battle over whether to use the grant or return the funds, which might be part of stolen customers’ funds, as per the lawsuit against the crypto exchange and its founders.

While FTX asked recipients of payments from the debtors in the FTX bankruptcy filing to return their funds in an announcement, it didn’t mention the FTX Futures Fund. However, a lawyer based in the U.S. suggested that it will depend on the FTX trustees and their willingness to claw back small amounts, including philanthropic ones.

Magazine: US enforcement agencies are turning up the heat on crypto-related crime

Bermuda still open to crypto firms, says premier: Report

Bermuda’s Premier, Edward Burt, reportedly met with U.S. lawmakers and government officials this week in Washington, D.C. to discuss common standards for digital assets.

The dramatic collapse of crypto exchange FTX in November 2022 is not moving Bermuda away from accommodating crypto companies, according to the head of the British island territory’s government during an interview with Bloomberg News.

“The future of finance is digital,” said the Bermudan Premier and Finance Minister Edward Burt, who believes there are still considerable benefits to be gained from digital assets and blockchain technology.

Bermuda is a self-governing territory with a parliamentary government and was one of the first places to implement a regulatory framework for digital assets. The territory is just 915 miles away from the Bahamas, where the now-bankrupted FTX once operated.

Burt reportedly faced intense political pressure before FTX’s failure, as the exchange chose the Bahamas instead of Bermuda for its headquarters. According to him, the latest events in the crypto industry had a minimal impact on the territory thanks to its regulations. “I think that approach has been vindicated,” Burt said, adding that regulations in Bermuda are clear and won’t change for any company.

According to Bloomberg, Burt met with United States lawmakers and government officials this week in Washington to discuss common standards for digital assets, and topics related to its finance and insurance sectors. He believes that regulators worldwide “must work together” to provide clarity for emergent technologies.

Since 2022, Bermuda’s government has pushed forward its ambitious plans to become a cryptocurrency hub. The island, known for its natural beauty and attractive taxation policies, has been actively expanding its crypto sector since 2017, Cointelegraph reported. According to Burt, 17 licensed crypto firms are currently operating in Bermuda.

Among the latest crypto developments in the territory is the release of Bermuda’s first stablecoin in December 2022 by Jewel Bank. The stablecoin is powered by the Polygon blockchain and focuses on enabling real-time settlements using a stablecoin with a 1:1 peg to the U.S. dollar.

Magazine: Best and worst countries for crypto taxes — plus crypto tax tips

Sam Bankman-Fried pleads not guilty to bribery, charges from superseding indictment

The former FTX CEO’s legal team argued that, although SBF had entered a not-guilty plea, he did not acknowledge the new charges, which included bribing a Chinese government official.

Lawyers for former FTX CEO Sam Bankman-Fried have entered a not-guilty plea for five additional charges since his December 2022 arraignment, including allegations of bribery.

According to multiple reports, Bankman-Fried pleaded not guilty in United States District Court for the Southern District of New York to four charges added as part of a superseding indictment in February, and one charge added on March 28 related to the former CEO allegedly bribing a Chinese government official. Other charges include conspiracy counts related to fraud as well as those for wire fraud and securities fraud during his time at FTX.

Mark Cohen, the attorney representing Bankman-Fried in the criminal case, reportedly argued that though SBF had entered a not guilty plea, there was no acknowledgement that the court had the authority to bring the charges against him. The latest charge alleged that SBF was involved in transferring “at least approximately $40 million in cryptocurrency intended for the benefit of one or more Chinese government officials” intended to facilitate transactions tied to Alameda Research.

Related: Sam Bankman-Fried is paying for legal defense using previously gifted funds from Alameda: Report

Bankman-Fried has been free on bail since being turned over to U.S. custody from the Bahamas in December, largely confined to his parents’ California home. A federal judge recently amended his bail conditions to prohibit the use of any smartphone with internet access. Bankruptcy proceedings for FTX are also currently underway in the District of Delaware.

Magazine: SBF legal fees, BTC market cap flips Meta and USDC climbs back to $1: Hodler’s Digest, March 12-18

Sam Bankman-Fried is paying for legal defense using previously gifted funds from Alameda: Report

The former FTX CEO reportedly gave Joseph Bankman roughly $10 million funded by a loan from Alameda Research as a part of a lifetime estate and gift tax exemption.

Former FTX chief executive officer Sam Bankman-Fried, also known as SBF, is reportedly funding the legal team defending him against federal charges with millions of dollars he gifted his father from Alameda Research.

According to a March 29 Forbes report that cited sources with “operational knowledge” of FTX and Alameda, in 2021 Bankman-Fried gave his father at least $10 million that was funded by a loan from Alameda. The former FTX CEO sent the funds to Joseph Bankman — a Stanford Law professor who has stopped teaching classes amid his son’s legal troubles — as part of a lifetime estate and gift tax exemption.

Bankman-Fried’s defense team consists of Mark Cohen and Christian Everdell of the law firm Cohen & Gresser, whom the former FTX CEO reportedly retained prior to his extradition to the United States in December. Though SBF remains free on bail at the time of publication, many of his in-person court appearances since his arraignment have focused on potentially restricting these conditions. A judge recently prohibited Bankman-Fried from using a smartphone with internet access.

Amid the collapse of FTX and Bankman-Fried’s subsequent arrest, members of his family, including his father, mother, and close associates, have become embroiled in the situation with the crypto exchange. Bankman reportedly retained his own attorney in January, and he and others have been named in potential subpoenas for FTX’s bankruptcy case.

Related: Sam Bankman-Fried petitions court to prioritize reimbursing his legal fees

SBF faced 12 criminal counts following a superseding indictment from federal prosecutors in February, which was amended to 13 on March 28 to include allegations he spent $40 million bribing a Chinese government official. Other charges include conspiracy counts related to fraud as well as those for wire fraud and securities fraud. Bankman-Fried entered a not-guilty plea in December, with the trial scheduled to begin in October.

Magazine: SBF legal fees, BTC market cap flips Meta and USDC climbs back to $1: Hodler’s Digest, March 12-18

Sam Bankman-Fried charged with bribing Chinese officials: Court docs

The former FTX CEO is in hot waters once again, as he is facing a new 13-count indictment from authorities in the United States.

FTX cryptocurrency exchange founder and former CEO Sam Bankman-Fried, or “SBF,” is facing a new 13-count indictment from authorities in the United States.

According to a court filing by United States attorney Damian Williams, one of the new SBF’s charges includes an alleged $40million bribe to a Chinese government official in a new superseding indictment.

In section 105 of the filing, the complaint claims that SBF and other related parties “directed and caused the transfer of at least approximately $40 million in cryptocurrency intended for the benefit of one or more Chinese government officials.” According to the allegations, the transaction was made in order to influence and induce Chinese officials to unfreeze cryptocurrency accounts at FTX’s affiliate firm, Alameda Research. The accounts reportedly held more than $1 billion worth of cryptocurrency.

According to the filing, Chinese law enforcement authorities froze certain Alameda accounts on “two of China’s largest crypto exchanges” in or around early 2021. The FTX founder was aware of the freeze and tried numerous methods to unfreeze the accounts, including attempting to transfer cryptocurrency to fraudulent accounts in an effort to circumvent China’s freeze orders.

“After months of failed attempts to unfreeze the accounts, Samuel Bankman-Fried discussed with others and ultimately agreed to and directed a multi-million-dollar bribe to seek to unfreeze the accounts,” the court filing notes. After the accounts were unfrozen at the direction of SBF, Alameda used unfrozen cryptocurrency to fund additional Alameda trading activity, the U.S. government found.

Related: SBF banned from using online messengers under new bail agreement

It appears to be unclear what Chinese cryptocurrency exchanges Alameda was using in early 2021 as China officially banned crypto exchanges from providing services in the country back in 2017. As previously reported, China enforced a blanket ban on crypto in September 2021.

FTX founder Bankman-Fried faces a trial set for Oct. 2, 2023, on criminal charges of stealing billions of dollars in FTX customer funds facilitated through Alameda Research. He is also alleged to have made large illegal political donations. He pleaded not guilty to eight criminal counts, which could result in 115 years in prison should he be convicted.

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips