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16 Dec 2022

The Friday Focus: Issue 64

Sam is finally arrested and is now facing numerous charges in another FTX-related week. Let’s dive into it!
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Top storiesSam Bankman-Fried and FTX are the main talking points again this week. SBF got arrested this week in the Bahamas and both the Department of Justice, the SEC, and the CFTC have filed charges against him, FTX and Alameda. Simultaneously, two FTX hearings took place in the US. The testimony from the new FTX CEO indicated that user funds were commingled with Alameda assets, that the firm had extremely sloppy accounting practices, and revealed that FTX US was not, in fact, operated independently of FTX.com. Moreover, one FTX executive outed SBF to Bahamian regulators two days before the bankruptcy filing and Alameda CEO Caroline may be working against SBF as a witness already.In other FTX news, the company has now asked for court permission to sell off four businesses, and a committee to represent creditors has been formed. The contagion also continues, with crypto trading firm QCP supposedly having almost $100 million stuck on FTX. Embattled crypto lender Amber Group is now raising $300 million, mostly for customers who lost money on Amber’s product as a result of FTX’s collapse. It was also revealed last week that the CEO of The Block had secretly raised capital from SBF/Alameda to fund the company. He has now resigned, and other The Block employees said they had no knowledge of the investment.Lawmakers in the US are pushing for new regulation, with US senators Warren and Marshall introducing a new digital assets AML bill and other senators voicing broad concerns and specifically mentioning Binance during this week’s hearing. Binance is reportedly also facing a probe from the US Justice Department, something Binance denies. In addition, a new digital assets guidance for banks was issued this week by regulators in New York.Regulators are also active outside of the US, with Canadian regulators tightening their grip on trading platforms and banning leverage. In Hong Kong, regulators warn investors about the risk of staking, and in Australia, regulators are planning for a crypto regulatory framework in 2023.Miners are still going through a challenging crypto winter, and B. Riley offered Core Scientific $72 million this week. The share price has increased more than 160% on the news. TeraWulf’s share price, on the other hand, fell 30% on the news of a $10 million raise to pay a convertible promissory note and increased hashrate guidance. The mining company Argo accidentally announced a filing for Chapter 11 bankruptcy protection but is actually trying to sell machines and get a loan to avoid precisely that. A warning of what’s to come?In other crypto industry news, Paypal is working with MetaMask, and Crypto.com received a payments license in Brazil. The Brazilian central bank is reportedly also planning for a CBDC launch in 2024. A holding company called Bitcoin Group has agreed to buy a German bank that BitMEX also tried to buy, and last, but not least, former US president Donald Trump unveiled an NFT collection.Let’s leave it with that! Until next time folks.
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