© Reuters
Investing.com – The dramatic fall of cryptocurrency exchange FTX has extended to the NBA with the announcement of the Miami Heat that it will rename its home arena, FTX Arena.
Well-known investor Kevin O’Leary, head of a financial firm and well-known TV personality, has called on FTX officials to impose more guarantees and regulations in the financial sector.
O’Leary said, “It’s time to set some rules. We are at the bottom of the cryptocurrency market today with the collapse of a major player. I have lost money, but I will continue to invest in this sector.”
Comment from the American Securities Commission
“We know what happened, but there seems to have been a lot of misconduct,” said Howard Fisher, a lawyer with the US Securities and Exchange Commission, the regulator of the US stock market.
The attorney condemned the SEC, noting that he also expected clients to go to court to recover their investments.
“I can’t comment on any potential investigations,” said SEC Chairman Gary Gensler, who has called for more transparency in the cryptocurrency industry since taking office.
“When you mix client money with lack of transparency and lending versus that money and brokerage, investors pay the price,” Gary Gensler added.
The group is under investigation by the Securities Commission and the New York Department of Justice, the New York Times reported, citing people with knowledge of the investigation.
Neither the SEC, which generally does not comment on any ongoing investigations, nor the Justice Department, have commented.
rescue attempts
The new head of LuffTX said the cryptocurrency giant is “doing everything possible to ensure the safety of all assets after unauthorized operations that could lead to the disappearance of hundreds of thousands of dollars”.
“FTX-US and FTX.com are continuing their efforts to protect all assets everywhere,” John Ray, the company’s new president, said in a tweet.
Bankruptcy declaration
John Ray added that “there has been unauthorized access to certain assets,” voluntarily under the protection of Chapter 11 of the US Bankruptcy Code.
The company said on its account on Friday that “+FTX Trading+ and approximately 130 companies associated with the +FTX Group+ have initiated the voluntary +Chapter 11+ process” of the Bankruptcy Code in order to “evaluate their assets.”
This system allows any company to restructure its debts under court supervision while continuing its operations. Company officials did not specify the volume of transactions in which unauthorized access was detected, but hundreds could have gone missing. of thousands of dollars.
663 million stolen
Cryptocurrency analyst firm Elliptic said in an analysis that just 24 hours after filing for bankruptcy, more than 663 million FTX wallets were emptied.
In detail, “Elliptic” said that “$447 million appears to have been stolen, while +FTX+ itself has transferred the rest to a safe place for storage”.
Just 10 days ago, FTX was considered the second largest cryptocurrency exchange in the world and its president, Sam Bankman-Fried (SPF), is the best interlocutor for regulators around the world.
The group’s value was estimated at about $32 billion, but US media reported that SPF’s wealth alone of about $16 billion evaporated within days.
Offers not allowed
Legal officer Ryan Miller reported on an investigation into improper wallet transactions related to the consolidation of FTX+ balances between exchanges and pointed to facts that lack clarity because other transactions are unclear.
Miller confirmed that unauthorized transactions have been observed and added that the platform has taken preemptive steps to move all digital assets to cold storage, as the process has been expedited to mitigate damage by monitoring unauthorized transactions.
Binance withdrawal
The trouble started with the publication of media information that the fund of the company Alameda Research is investing in cryptocurrencies issued by FTX.com in a financial transaction that involves risks that could reveal a significant conflict of interest.
What has exacerbated the chaos at the company, the largest group in this sector, Binance, announced the sale of a cryptocurrency linked to FTX, then offered to buy the company on Tuesday and withdrew from the offer the next day.
Bankman Fred’s resignation just hours after the platform announced it had filed for bankruptcy, in the latest rapid fall of a major player in the unregulated cryptocurrency sector, has led to a sharp drop in the prices of digital currencies.
The beginning of the collapse
According to reports, Sam Bankman-Fried’s FTX Trading held $900 million in liquid assets against $9 billion in liabilities the day before it filed for bankruptcy on Friday.
Most of the assets recorded were either illiquid venture capital investments or cryptocurrency tokens that aren’t widely traded, according to the spreadsheet.
The largest asset listed on Thursday was $2.2 billion of a cryptocurrency called Serum.
Global reports from a person involved in the negotiations revealed that Benckmann-Fried was also looking to sell $472 million in Robinhood Markets stock at $9 a share as of Friday afternoon.
The filings also revealed that Bankman-Fried was seeking to raise between $6 billion and $10 billion, including the issuance of convertible preferred stock, at 10% interest to convert into FTX International common stock, between $12 billion and $15 billion.
Also according to the spreadsheet there is an indication of $5 billion in withdrawals last Sunday and $8 billion in passive income.
Pinkman-Fried told the Financial Times he was connected to money given “by mistake” to his trading company, Alameda.
