More from Crypto collapse: FTX’s fall is one piece of a long, cold, contagious crypto winter
Gary Wang, cofounder of FTX, isn’t as famous as Sam Bankman-Fried — but he might be the most important part of the government’s case against SBF. The two met in math camp, and this Bloomberg report traces their history together until SBF got a note explaining a witness was cooperating against him:
Reading the cable from the US, Bankman-Fried realized who CC-1 was: Gary Wang.
The former FTX crypto tycoon is living with his parents in California instead of sitting in jail, thanks to a $250 million bail secured by his parent’s home as well as two people who had been kept anonymous.
Today, after news organizations argued for the information to be released, the court revealed Stanford research scientist Andreas Paepcke put up $200,000 and former Stanford Law School dean Larry Kramer put up $500,000. SBF’s parents teach law at Stanford.
Remember when I told you Binance has a target on its back? It might not be in the US, but its partner on a stablecoin sure is. And if regulators can’t hit Binance, they can hit its partners.
Paxos not only has to stop issuing BUSD, its Binance-affiliated stablecoin, the SEC may take action against it: a Wells Notice suggests the agency thinks BUSD is an unregistered security.
Scam hunter Coffeezilla decided to see if influencer Dillon Danis really meant what he said about feeling bad about people who got NFT scammed. So he set up an obviously-fake NFT project to see if Danis would promote it.
Personally, my favorite part of this was discovering the going rate for NFT project promotion. It’s very cheap!
Founders Alex Mashinsky and Daniel Leon also sold the token while this all was going on, according to a court-ordered report on Celsius. If you don’t have time for the full filing, Reuters summarizes its results.
“When you look at what the banks pay, you say to yourself, ‘Somebody is lying. Either the bank is lying or Celsius is lying,’” Mashinsky said in 2021. Guess we know who it was now!
“Bankman-Fried’s use of Signal to reach out to the current general counsel of FTX US, who is a witness, was ‘merely an innocuous attempt to offer assistance in FTX’s bankruptcy process and does not reflect misconduct that warrants the restriction the Government proposes here,’” Bloomberg reports.
At this point, I wonder if the government has let him out on bail just so he’ll further incriminate himself.
[Bloomberg.com]
Bennett Tomlin of Crypto Critics Corner takes you through it and uh, it’s maybe not great. “Their entire claimed segregation of client crypto assets depends entirely on Binance having perfect, or very, very good internal accounting records,” Tomlin says.
Yikes.
The White House has noticed the crypto shenanigans of the last year, and presumably its denizens are not especially pleased about them.
Of particular note: “While congressional action in these areas would be welcome, Congress could also make our jobs harder and worsen risks to investors and to the financial system.”
...And violating its own guidelines in the process.
The commingled funds make it difficult to sort out whether Binance can meet redemption requests for its 94 B-tokens. Good luck out there — I think a lot of you will need it.
As Reddit points out, today is the one-year anniversary of “Line Goes Up,” Dan Olson’s long investigation/treatise on what NFTs really are... and why there’s really not much value in them at all. Twelve months later it’s amazing how much the video gets right, and how little has changed since. Still a fun watch, too!
If so, this deep dive from the podcast Odd Lots is fantastic.
Three Arrows Capital and BlockFi were both borrowing from Genesis in order to get involved with a Grayscale arbitrage trade... and now Genesis is bankrupt. Of course, this is also why CoinDesk is up for sale, since Genesis, Grayscale, and CoinDesk share a parent company.
Charles Hoskinson, co-founder of the Cardano blockchain, is threatening to buy and ruin CoinDesk, which is probably my favorite source for crypto journalism. I hope he stubs his toe very hard and that someone worthwhile buys CoinDesk.
Heather Morgan, aka the cringe rapper Razzlekhan, wants to alter her 24-hour house arrest so she can go to her job in New York as a “growth marketing and business development specialist,” Bloomberg reports, citing a legal filing. Morgan’s house arrest stems from allegedly trying to launder a bunch of hacked crypto.
Which one of you hired her?
A step-back from Forbes on the deeply weird banking relationships at FTX notes that the exchange’s accounts at Moonstone Bank, supposedly worth almost $50 million, didn’t appear in the FTX bankruptcy proceedings.
What if Inspector Gadget was the bad guy all along?
Two juicy stories in the Bloomberg reporter’s latest Money Stuff newsletter, with one about the CEO of Frank being sued by JP Morgan over the user base of her financial loan application startup:
So, in essence, [Frank] paid a total of $175,000 for a list of email addresses, and then sold that list to JPMorgan for $175 million, for a perfect 99,900% return on its investment. What an arbitrage!
And more on Sam Bankman-Fried’s unusual Substack defense strategy.
At least, that’s what Sam Bankman-Fried seems to have done. The dog is a German shepherd named Sandor, and — unforgivably — Puck’s Teddy Schleifer has not taken a photo for his post.
Yes, SBF is still giving interviews. There isn’t a lot of meat in this one, and not just because dude’s a vegan. But he tells Schleifer that’s he’s planning to battle this all the way out in court.
The twin sea gods famously shafted by Mark Zuckerberg? Inexplicably involved in the tech industry despite having dominion over the sea floor?
Anyway they’re beefing with the Digital Currency Group now, Bloomberg says their reputation has been tarnished, and their rock band, The Mars Junction, is the lede of the story. Perhaps they have been cursed, and the only thing that will free them is breaking some magical conch shell, who can say!
