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BTC Markets CEO Speaks About Fall of FTX and its Effects on Cryptocurrency Market

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The CEO of BTC Markets, Caroline Bowler, discusses the most recent developments in the world of cryptocurrencies. According to Bowler, it is strange that a situation similar to that of MF Global has occurred recently in which client funds have been misappropriated by insolvent businesses.

The entire cryptocurrency industry is being impacted by the fall of the FTX empire. Users, executives, investors, and staff all suffered greatly as a result of the exchange’s meltdown.

Nobody foresaw the cryptocurrency industry’s titan’s demise. The company FTX, which was having trouble with liquidity, has now filed for bankruptcy. SBF has also given up his position as the exchange’s CEO.

Additionally, Bowler added that word has spread that FTX’s decision to use client funds was a long-term strategic choice that failed. She emphasized that FTX’s decline is what caused the ripples we currently see in the market.

The CEO of BTC Markets emphasizes that more Ripples are likely to emerge in the crypto industry as a result of the affiliation of numerous companies with FTX.

BTC Market’s Bowler compares FTX’s fall to the GFC event

Bowler likens the FTX event to a miniature GFC event and predicts that there will be more regulation on the other side. She claims that this will benefit the cryptocurrency industry in every way.

Bowler and her group have additionally been vigorously advocating for improved customer protection and self-regulation. She is willing to confirm this as well in terms of regulation.

Bowler emphasizes that behavior, not blockchain technology, needs to be examined. She says that analysis of the FTX management’s behavior is necessary because that is where regulation is required.

Bowler also discussed the discussions that took place at the Singapore Fintech Festival, where they touched on the need for more international cooperation and regulations. She continued by saying that all of these regulations would probably come into effect within the next 12 to 18 months.

After Bitcoin fell to $15,900 levels on Monday, the FTX collapse is endangering additional declines in the cryptocurrency markets. BTC has lost all of the gains it made during the bull run in 2021 and is now at its lowest point since November 2020. After the disaster that could severely harm cryptocurrencies, confidence in the markets and key industry players has decreased.

Crypto.com Transferred $1B+ Funds To FTX, CEO Responds

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Crypto.com is in the limelight following the revelation that the exchange has transferred over $1 billion USDC to FTX in the past year, one crypto enthusiast revealed.

“They likely fell victim to @SBF_FTX’s incredibly great APR deception. And they figured, “Why not make some decent money from the deposits from the users?”

Crypto.com CEO Kris Marszalek admitted the transfer but said the funds were used to hedge customers’ orders, “We never deployed capital for yield with FTX or any 3rd party”, and that its total exposure to FTX is under $10 million.

Marszalek also stated that 1 billion over a period of a year was “minuscule” compared to its trading volumes.

Crypto Twitter was divided on the statements with some demanding more explanation on the transferred funds.

The other day, the community was alarmed after the exchange allegedly sent 320k ETH to a wallet address linked to Gate.io in late October. Although the platform has recovered the funds, Changpeng Zhao, the CEO of Binance, recommended that customers stay away from it.

The unprecedented fallout of FTX, once deemed as crypto’s bail-out king for its role in the recent crypto meltdown, has raised doubts over the reliability of centralized players. 

Crypto.com Claims The Transfer Was A Mistake

To boost confidence amid the FUD, major industry execs began sharing proof of reserves including Crypto.com, which published its wallets and disclosed how much and which cryptocurrency it maintains on behalf of its customers.

However, some experts quickly noted a suspicious transfer of 320,000 ETH to a wallet address connected to Gate.io on October 21, 2022.

Users were more skeptical because the exchange asserted that all user-owned cryptocurrencies are maintained offline in cold storage in collaboration with hardware wallet provider Ledger.

In an effort to contain the damage, CEO Kris Marszalek took to Twitter to say that the transaction was a mistake. “It was supposed to be a move to a new cold storage address, but was sent to a whitelisted external exchange address,” he claimed.

Despite the justification, the move left the crypto community with a negative impression. Many users have questioned how it was possible for $400 million worth of ETH to be unintentionally sent to an address that wasn’t the intended recipient.

Miami To Remove FTX Branding From Famous Downtown Stadium; FTX Owes $16.5M

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The Miami HEAT and Miami-Dade County announced they were severing their connections with the notorious Bahamas-based cryptocurrency exchange immediately in a joint statement just hours after FTX declared bankruptcy.

Social media posts that claim to show the removal of the FTX emblem from the arena’s roof have already gone viral. The hefty $135 million contract with FTX lasted for 19 years. A press statement issued on Friday stated,

“The reports about FTX and its affiliates are extremely disappointing. Miami-Dade County and the Miami HEAT are immediately taking action to terminate our business relationships with FTX, and we will be working together to find a new naming rights partner for the arena.”

The collapse of FTX, once one of the biggest cryptocurrency exchanges in the world, this week was caused by a liquidity problem that set off a chain reaction that led to the bankruptcy of all of the exchange’s subsidiaries, including FTX US and its quant trading firm Alameda Research. According to reports, the entire portfolio of enterprises is currently between $10 and $50 billion in the red.

The demise of FTX has already had an impact on other areas of the cryptocurrency business and beyond, including Miami. Under the guidance of the pro-crypto Mayor Francis Suarez, Miami has made an effort to become a hub for the industry by allowing companies like FTX to open offices there.

After Sponsorship Cancellation, Here’s How Much FTX Owes Miami

According to an agreement made between the bankrupt exchange and Miami-Dade County last year, FTX owes them $16.5 million. Miami-Dade County is the owner of the building formerly known as FTX arena.

The $135 million contract stipulates that it will be paid off over 19 years. The agreement also states that the exchange will be required to pay three years’ worth of contract fees within 60 days in the case of an FTX default, which includes a “insolvency event.” FTX will now be required to pay $16.5 million over the next three years after paying $14 million at the time of the contract’s signing. The County claims it has the right to levy 12% interest per year until the payment is made if it is not made within ten working days.

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The exchange gave the County $14 million in the first year, but between years 2-4, it owes a charge of $5.5 million per year. It owes $6 million in year 5, $7 million in year 10, and $8 million in year 19. The County and the Miami Heat announced late Friday that they had severed ties with FTX due to its insolvency.

Tether Blacklists Suspicious FTX Wallets, Loses $27.5M On SOL

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Despite the CEO purportedly seeking other support companies, Tether said it has no plans to spend money on FTX. Cryptocurrency exchange FTX has lost at least one potential savior as it tries to plug a supposedly multi-billion dollar hole in its financial statement. The stablecoin team has now decided to step it up by blocking suspicious FTX wallets.

The entity responsible for the enigmatic financial transfers associated with FTX cryptocurrency wallets has begun selling off token holdings from different networks.

Early Asian morning, just following news of a hack at FTX, saw the sale of more over $12 million in chainlink (LINK) tokens over the course of two transactions. The fact that the organization made a profit of just under $10 million after slippage, which refers to losses incurred by a market participant when they receive a different deal execution price than anticipated, suggests that the entity was scrambling to dispose its assets.

Separately, activities on the Polygon blockchain connected to the account drainer’s wallets revealed that 3 million MATIC tokens were sold for $2.4 million.

Tether Loses $3.9M On AVAX And $27.5M On SOL Linked To FTX Wallets

According to ZachXBT, a pseudonymous blockchain investigator, certain funds connected to the wallets used by the account drainer to sell tokens on the Avalanche and Solana networks earlier this morning appear to have been frozen by stablecoin issuer Tether.

Tether has blacklisted over $3.9 million USDT on Avalanche and $27.5 million USDT on Solana connected to the FTX account drainer.

Bankman-Fried is alleged to have approached Tether, the cryptocurrency exchange OKX, and the venture capital company Sequoia Capital for funding. According to reports, he has asked each organisation for at least $1 billion.

The CTO’s response appears to echo the perspective Tether stated in a blog post on November 9 assuring the community that it has no exposure to Alameda or FTX. On November 10, the stablecoin issuer reportedly froze 46,360,701 USDT held by FTX in its Tron blockchain wallet in order to work with law enforcement. Whether OKX or Sequoia Capital are considering aiding the struggling exchange is unknown at this time.

FTX Hack Leads To Mysterious Outflows Of Over $600M

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Late on Friday, more than $600 million in cryptocurrency vanished from the wallets of the defunct cryptocurrency corporation FTX, with no obvious reason given. Soon after, the exchange announced that it had been hacked in its official Telegram channel and advised users not to install any new updates and to delete all apps related to the exchange.

An account administrator in the firm’s Support Telegram chat wrote,

“FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Don’t go on FTX site as it might download Trojans,”

Ryne Miller, general counsel for the exchange, confirmed the message.

https://twitter.com/_Ryne_Miller/status/1591281729125613570?s=20&t=Hv90HEUWoeAGxfPMu-Q60g

Various Ethereum tokens, as well as the Solana and Binance Smart Chain tokens, have left the exchange’s official wallets and transferred to decentralized exchanges like 1inch, according to on-chain statistics. It appears that both the exchange and its US venture are impacted.

Hack and FTX Filing For Bankruptcy Interlinked?

The transfers occur on the same day that the exchange formally filed for Chapter 11 bankruptcy protection after losing allegedly billions of dollars in user payments. The transfers have not been officially acknowledged by the firm’s leadership.

Numerous owners of the exchange’s wallets have also reported seeing $0 balances in their firm’s website and the firm’s US wallets. This can be due to the FTX API being unavailable.

FTX founder Sam Bankman-Fried was the target of filthy jokes and insults that were apparently included in some of the transactions. This led to quick speculation on Twitter from members of the cryptocurrency community that the funds had been syphoned off as part of some sort of attack.

Some others hypothesized that someone in Bankman-inner Fried’s circle was behind the outflows, citing the simultaneous and sophisticated hacks of the exchange and its US branch as evidence of a possible inside job. ” Multiple former FTX employees confirmed to me that they do not recognize these transfers,” Twitter sleuth ZachXBT wrote in a tweet on Friday night.

With names like “cumsock.eth” and “downsyndromemonkey.eth,” many of the transactions seemed to be trolls when the wallet address became known, seeking to have their vanity names permanently inscribed in a ledger that would likely be submitted as a court document and read aloud by a judge.

By midnight Eastern Time, FTX’s login interface was down (the website is still up), and anyone who attempted to log in received a 503 error. A 503 error occurs when the server is down, usually because it is being serviced or is not accessible.

FTX Saga: Bahamas Calls For Liquidator And Freezes Assets

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The honeymoon between FTX CEO, SBF, and the Bahamas appears to be ended. On Thursday, the West Indian country’s Securities Commission issued a directive to freeze the assets of the troubled cryptocurrency exchange FTX.

The Securities Commission of The Bahamas stated in a statement, “Today the Securities Commission of The Bahamas took action to freeze assets of FTX Digital Markets and related parties.” The commission also suspended FTX’s operation registration and requested that a provisional liquidator be appointed by the Supreme Court of The Bahamas, according to the statement.

The letter, which was shared by the Nassau Guardian on Twitter, comes after a week of difficulties for Sam Bankman-Fried, a former cryptocurrency darling, and SBF’s exchange, previously among the biggest cryptocurrency exchanges in the world.

The organization claimed to be aware of claims that FTX’s assets were handled, managed, or given to Alameda Research improperly. The commission stated that FTX Digital Markets should be placed into provisional liquidation to “preserve assets and stabilize the company” and that these activities may have been illegal.

The agency further stated,

“The Commission is committed to working with the provisional liquidator to endeavor to obtain the best possible outcome for the customers and other stakeholders of FTX.” 

On November 6, 2022, Binance CEO Changpeng “CZ” Zhao announced that the largest cryptocurrency exchange in the world was selling its holdings of FTT, the native token of competitor exchange FTX. This is when the global exchange’s problems started.

Approximately 23 million FTT tokens, valued at $529 million, were held by Binance, according to Investopedia. FTT’s value dropped by 85.6% and is currently trading at $3.43, down from $24.01 the previous week, when Binance said it was liquidating its entire investment, triggering a run on the exchange.

FTX And Bahamas: A Short Lived Love Story

After relocating from Hong Kong, SBF’s exchange inaugurated its new offices there in September 2021, citing the Bahamas as one of the few nations that have established a thorough framework for cryptocurrencies.

The Bahamas has embraced digital currency, even introducing the Sand Dollar as its official digital currency. Companies like OKX and SBF’s global exchange built headquarters in the island nation thanks to welcoming crypto rules.

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FTX CEO Sam Bankman-Fried

Sam Bankman-Fried conducted a four-day seminar in the Bahamas in May of this year while the exchange was still settling into its new home there. Along with Wall Street, other notable attendees included Tom Brady, Gisele Bundchen, Bill Clinton, Tony Blair, Andrew Yang, Orlando Bloom, Apolo Ohno, Rick Fox, Udonis Haslem, and Liam Payne from One Direction.

Tether Will Not Succor FTX; $46M Frozen As Per Law Enforcement Request

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Tether has indicated that it has no plans to invest cash into FTX, despite the CEO allegedly approaching many companies for assistance. As it struggles to close a purported multi-billion dollar hole in its financial sheet, cryptocurrency exchange FTX has lost at least one possible savior.

On November 10, Tether’s CTO, Paolo Ardoino, affirmed the company has no plans to invest or lend money to FTX/Alameda.

Ardoino made his remarks in response to a Reuters report from Nov. 10 that said the $9.4 billion gap at FTX had FTX CEO Sam Bankman-Fried reaching out to many businesses for funding to keep the exchange solvent.

Tether, the cryptocurrency exchange OKX, and the venture capital firm Sequoia Capital are among the businesses that Bankman-Fried is said to have approached for funding. It is said that he has requested at least $1 billion from each of the organisations.

The sentiment expressed in a blog post by Tether on November 9 that assured the community that it has no exposure to Alameda or FTX appears to be reflected in the CTO’s answer.

In order to cooperate with law authorities, the stablecoin issuer reportedly frozen 46,360,701 USDT held by FTX in its Tron blockchain wallet on November 10.

It is unclear at this time whether OKX or Sequoia Capital are thinking about supporting the troubled exchange.

To aid with FTX’s liquidity concerns, Bankman-Fried requested up to $4 billion from the exchange, although Lennix Lai, director of financial markets at OKX, earlier told Reuters on Nov. 9 that the company had not yet decided whether or not to support FTX.

Tether Freezes $46M USDT

According to a recent report, Tether has recently frozen $46 million USDT at the request of the police. The trustworthy stablecoin has cooperated with the demand, which might be related to the FTX exchange.

There isn’t much information available about the investigation’s scope or goals; we just know that it’s happening. “We are starting to receive requests from LE to temporarily freeze assets while an investigation occurs,” a Tether executive told local media.

“USDT tell 3% from its $1 peg earlier today as contagion continues to spread following FTX’s woes,” was also mentioned to the statement. The USDT is marginally anchored below $1, according to the report’s conclusion.

Then word spread that the USDT that had been frozen belonged to one address that belonged to FTX. A halt to withdrawals due to liquidity difficulties has shaken the platform just days after the Binance saga.

It is unclear whether this probe is anyway connected to FTX or if it has something to do with Tether only. Tether has not yet made a formal announcement on its own behalf.

BlockFi Halts Operations In Wake Of FTX Collapse

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BlockFi, a cryptocurrency-related financial service provider, announced via Twitter on Thursday that due to the downfall of FTX, they were incapable of conducting business as usual and had thus limited their activities.

According to their statement:

We are shocked and dismayed by the news regarding FTX and Alameda. We, like the rest of the world, found out about this situation through Twitter.

The company asserts that its top priority is the protection of its customers and assets. In response, they are pausing client withdrawals until there are more clarifications on FTX status. They also advised clients against depositing money into their wallets or Interest accounts.

Furthermore, they claimed they would provide additional updates as soon as possible. In the meantime, they also plan to stay in close contact with its clientele and other shareholders as often as possible.

Well, it’s not clear whether BlockFi has a financial stake in FTX, and it’s also not apparent whether the two companies have any other unspecified connections. 

Earlier this week, Flori Marquez, Co-founder of BlockFi, highlighted in its tweet that “BlockFi is an independent business entity.” She also clarified that they have a $400 million line of credit from FTX.US, not from FTX.com.

BlockFi In Limbo As FTX Folds

FTX, one of the largest crypto exchanges, has been facing liquidity issues and allegations of misuse of funds over the last week. It was preceded by an unexpected rise in investors withdrawing funds from FTX after learning about the exchange’s potential risks.

Additionally, the price of FTX’s FTT dropped drastically, taking other cryptocurrencies, including the two most prominent coins, Ethereum (ETH) and Bitcoin (BTC), down with it. As of Wednesday afternoon, both two major currencies hit a two-year low. 

The fall of FTX has caused panic in the crypto market. Cryptocurrencies and exchanges with exposure to FTT and FTX will continue to face crashing prices, financial difficulties, and other negative outcomes.

Therefore, investors are worried about what will happen to their assets on other exchanges because of the significant volatility and the large number of clients who are unable to withdraw their money from FTX.

However, a notice stating that trading may be paused on the platform in the next few days was put on FTX.US’s website on Thursday for users on the log-in screen. Users were instructed to cancel any open positions and were informed that withdrawals would not be affected.

Sam Bankman-Fried, the CEO of FTX, also announced on Twitter that the FTX.US exchange is “100% liquid,” which means customers may freely withdraw all of their deposited cash.

Nevertheless, reports from Bloomberg show that FTX has said they would need to file for bankruptcy- unless they get a bailout. The future of all three brands (FTX, FTX.US, and FTX International) is uncertain at the moment.

Related Reading | TRON-Centric Tokens Inflated Prices Comes At The Expense Of FTX Users

FTX Future Fund’s “Philanthropic Arm” Resigns

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FTX Future Fund’s leadership quit on Thursday in an open letter that was shared on Twitter by journalist Teddy Schleifer, one of the exchange giant’s charitable arms. The letter stated,

“Devastated that it looks like there are many committed grants that the Future Fund will be unable to honor.”

The letter went on to say that they were sorry this situation had arisen and that, to the extent that the FTX leadership may have acted dishonestly or deceitfully, they strongly condemn that conduct. They also think that acting honestly and morally involves trying to be a decent actor in the world.

The judgment intensifies the effects of FTX’s severe liquidity issues. Following allegations that the balance sheet of its sister business, Alameda Research, included an excessive amount of FTX’s FTT token, the company came under fire last week.

Sam Bankman-Fried, the founder and CEO of FTX, has made promises to contribute a sizable portion of his money and to make sizable corporate gifts in an effort to position himself as the “most generous billionaire” in the world. The exchange operated two charitable entities.

Fate Of FTX Future Fund investment of $1B

Traditional charity The FTX Foundation has contributed to projects addressing pollution, climate change, and health. In areas including biosecurity and AI safety, the FTX Future Fund has backed moonshot initiatives aimed at “long-term improvements for humanity.” The global exchange announced in March that it would invest $1 billion through the Future Fund at a pace of $100 million annually.

The team will support both for-profit and nonprofit endeavors, according to the release, as long as they are in line with the fund’s objective, which includes preserving the environment and protecting future generations. Additionally, the fund seeks out initiatives that advance technological development.

The company emphasizes that it wants to support “massively scalable” initiatives. This was described as “projects that could grow to productively spend tens or hundreds of millions of dollars per year.”

Some believed that Web3 riches would fuel a new wave of generosity during the bull market, just like Web2 money did when it came to establishing institutions like the Bill & Melinda Gates Foundation.

Bankman-personal Fried’s fortune has decreased by about 94% due to the swift devaluation of FTX and FTT, and he disappeared from the Bloomberg Billionaires Index earlier this week. Given how one well-known VC who invested in FTX marked down its investment value to zero, he might be worth even less at this point.

FTX US Will Start Ethereum [ETH] And Polygon [Matic] Withdrawals Soon

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After a brief delay, FTX US will shortly begin Ethereum [ETH] and Polygon withdrawals, asking MATIC users to cancel their pending withdrawals and initiate a fresh request.

Earlier, FTX US alerted users that trading may be suspended on its platform in a few days. “Please close down any positions you want to close down. Withdrawals are and will remain open. We will give updates as we have them.”

Sam Bankman-Fried, the company’s founder and CEO, tweeted about his plans to rescue the troubled firm, insisting that FTX US is a different entity from its global business and is doing just well. “FTX US was 100% liquid and not affected “by this shitshow. Every user could fully withdraw.”

This is in contrast to FTX International, the global crypto trading company that’s currently seeking funding to fill a reported $10 billion deficit.

Although FTX US has been described as a separate entity from the global operation, the two businesses are in reality closely related.

This is because the FTX brand as a whole has been frequently utilized in sponsorship agreements in the US, for instance, and some of those deals have specifically been made with both FTX and FTX US.

Additionally, a report from Bloomberg on 9 Nov. stated that the U.S. Securities and Exchange Commission [SEC] and Commodity Futures Trading Commission [CFTC] is investigating FTX, its handling of customer funds, and the degree of closeness between the two entities.

The situation became even more problematic when Bankman-Fried allegedly leaked Slack messages in his public tweets indicating prospective fundraising that would inject money into both FTX and FTX US at the same time.

Meanwhile, the price of Bitcoin and Ethereum has fallen significantly over the previous 24 hours, resulting in a 10.6% decline in the overall market capitalization of cryptocurrencies, which now stood at $914 billion.

Ethereum Trading At Premium Range On FTX

Data showed Ethereum‘s price has dropped 8% in the previous 24 hours and is currently hovering at $1,274. As a result, the market value of the second-largest cryptocurrency has decreased by 74% from its previous peak.

Compared to Binance and other platforms, ETH was fetching greater prices on FTX. as traders are perplexed by the peculiar market dynamic. According to data from the graphing tool TradingView, ether traded at a premium of $1307 on FTX.