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FTX fallout leaves blood in its wake

garretschoenbergNovember 18, 2022
FTX fallout leaves blood in its wake

Bitcoin (BTC) is the biggest currency revolution of our time. By simply buying and holding bitcoin, citizens are making a peaceful protest against indentured servitude brought on by statutory economics. In the process, they initiated one of the greatest wealth transfers of all time. It’s a process that takes decades to fully execute.

Bitcoin has also inspired the trillion dollar cryptocurrency and blockchain industry. This is an exciting and terrifying double-edged sword. Sam Bankman-Fried, the disgraced founder of his now bankrupt FTX Group, is a case study on what can go wrong when a marginalist is in charge of a big company. Sam Bankman-Fried, or his SBF as he often calls it, ‘proudly apologizes’ for cheating investors, cheating auditors and using client funds to support his FTX sister hedge fund Did. We couldn’t even untangle the political web that SBF found itself in—maybe include his Gary Gensler at the U.S. Securities and Exchange Commission.

This week’s Crypto Biz continues to unravel the implosion of FTX, the world’s second largest digital asset exchange as of 10 days ago.

Sam Bankman-Fried is ‘under supervision’ in Bahamas, looking to flee to Dubai

After denying rumors that he fled to Argentina over the weekend, SBF was said to be under supervision in the Bahamas with FTX executives Gary Wang and Nishad Singh. A source familiar with the matter told Cointelegraph that it would be difficult for the trio to leave the country without permission. The same source, who chose to remain anonymous, claimed that Alameda Research CEO Caroline Ellison was trying to flee to Dubai to avoid extradition to the U.S. In an attempt to communicate a low-key lifestyle to the public. Despite this, SBF lives in her $40 million penthouse in the Bahamas.

FTX Impact Continues: BlockFi Reportedly Considering Bankruptcy, SALT Suspending Withdrawals And Deposits

The impact from the FTX debacle was immediate and devastating as Bitcoin lender BlockFi shut down its platform, leading to credible rumors that it was on the brink of bankruptcy. In an official update to clients on Nov. 14, BlockFi said he has “substantial exposure” to FTX and its affiliates. Meanwhile, the cryptocurrency lending firm also revealed this week that SALT has also suspended platform activities, including a suspension of all deposits and withdrawals, due to the FTX outbreak. As reported by Cointelegraph, SALT CEO Sean Owen has denied claims that his company will “go bankrupt.” But at the moment things don’t look good for SALT users.

Genesis Global suspends withdrawals due to ‘unprecedented market turmoil’

On November 16th, the FTX contagion spilled over into institutional markets as liquidity provider Genesis Global announced a temporary suspension of withdrawals due to “unprecedented market turmoil”. Genesis Global is not a household name in the crypto industry, but currently provides liquidity to Grayscale Bitcoin Investment Trust, whose net worth is over $20 billion. Genesis managed to survive the collapse of his Three Arrows Capital earlier this year as he filed a $1.2 billion claim against the failed hedge fund. It’s unclear if Genesis will be able to survive the FTX meltdown as his $175 million worth of funds was stuck on exchanges.

FTX bankruptcy freezes millions of dollars worth of crypto firm funds

In addition to BlockFi, SALT and Genesis Global, several companies were held responsible for FTX’s bankruptcy. Hedge fund Galois Capital told FTX that he has $50 million worth of cryptocurrency. New Huo Technology, which owns Hong Kong cryptocurrency exchange Hbit, said he was unable to withdraw $18.1 million in digital assets from FTX. His Nigerian Web3 startup, Nestcoin, has reported similar issues, but has not disclosed how much funds are locked on SBF’s exchange. FTX touched every corner of the cryptocurrency market and put millions of people at risk. More details will be revealed in the coming weeks and months.

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