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By Verge Staff
On January 1st of 2022, one Bitcoin would cost you about $46,000. By November 8th, that same coin went for about $18,500. And that’s when the year’s most dramatic crypto story was just starting: the collapse of the FTX exchange, which brought yet another round of existential threats to the crypto industry as a whole.
Now, SBF has been arrested by the Bahamian authorities and extradited to the US to face pending civil suits and criminal charges. To make things worse for the former crypto billionaire, federal prosecutors revealed that two top executives from companies in his crypto empire, Gary Wang and Caroline Ellison, have pleaded guilty to fraud charges and are cooperating with the government.
This year has looked like death by a thousand scandals for crypto. There was the Luna / Terra crash, which wiped out billions in value practically overnight. There was Axie Infinity, the once-hot NFT game that lost $625 million in a hack and has struggled to recover. Celsius collapsed. Three Arrows Capital collapsed.
Remember when NFTs were cool and people thought their JPGs were worth millions?
All this happened, of course, as the overall economy began to crash back down to earth after a pandemic-created spike in stock prices — which also dampened society’s overall tolerance for chaotic, nonsensical gambling on internet money. As the economy began to even out and our collective risk tolerance went down, crypto went for many investors from a fun plaything to a dangerous bet.
Crypto has crashed before, and as ever, the HODLers are saying there’s upside left to come. But right now, the future for cryptocurrencies of all kinds looks pretty bleak.
Jan 24, 2023, 6:30 PM UTCElizabeth Lopatto
…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.
[Bloomberg.com]
Jan 23, 2023, 11:06 AM UTCJess Weatherbed
An SEC order claims that the company’s EIP was an unregistered security. Nexo has agreed to pay, but has not admitted fault.
Jan 21, 2023, 8:36 PM UTCDavid Pierce
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!
Jan 20, 2023, 11:28 PM UTCElizabeth Lopatto
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.
[Bloomberg.com]
Jan 20, 2023, 4:54 PM UTCElizabeth Lopatto
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.
[Bloomberg.com]
Jan 20, 2023, 9:57 AM UTCMitchell Clark and Jon Porter
The fallout from FTX going down continues, and it doesn’t seem like Genesis will be the last domino.
Jan 19, 2023, 3:45 PM UTCJess Weatherbed
The US DOJ alleges Bitzlato crypto firm was a ‘safe haven’ for cybercriminals.
Jan 17, 2023, 8:00 PM UTCElizabeth Lopatto
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?
[Bloomberg.com]
Jan 17, 2023, 6:56 PM UTCElizabeth Lopatto
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?
[Forbes]
Jan 13, 2023, 2:11 PM UTCRichard Lawler
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.
Jan 12, 2023, 3:11 PM UTCRichard Lawler
A Substack newsletter from the former exec accused of orchestrating a massive fraud makes extraordinary claims about what went on within FTX and Alameda Research.
Jan 11, 2023, 5:41 PM UTCElizabeth Lopatto
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.
[Puck]
Jan 11, 2023, 5:18 PM UTCElizabeth Lopatto
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!
[Bloomberg.com]
Jan 11, 2023, 3:29 PM UTCEmma Roth
Tom Brady and supermodel Gisele Bündchen had almost 2 million shares in FTX combined — and they may not get it back.
Jan 10, 2023, 12:47 PM UTCJon Porter
The company plans to let go 950 employees, with its CEO citing a difficult crypto market and ‘the fallout from unscrupulous actors in the industry.’
Jan 5, 2023, 3:49 PM UTCRichard Lawler
Exactly one month ago, Silvergate’s CEO insisted things were ok, despite the problems with FTX, a major customer.
Today its Q4 filing reveals deposits from crypto customers shrank from $11.9 billion to $3.9 billion in three months, $150 million of the bank's deposits are held by customers who’ve filed bankruptcy, and it’s laying off 200 employees.
The company’s stock price is down 46 percent.
[CNBC]
Jan 4, 2023, 4:14 PM UTCEmma Roth
As part of a settlement with New York regulators, the cryptocurrency exchange must also invest an additional $50 million in a compliance program.
Jan 3, 2023, 10:54 PM UTCMitchell Clark
‘The agencies have significant safety and soundness concerns with business models that are concentrated in crypto-asset-related activities.’
Jan 3, 2023, 7:40 PM UTCRichard Lawler
The former crypto billionaire pleaded not guilty to eight criminal charges, with the trial set to begin on October 2nd.
Jan 3, 2023, 3:31 PM UTCRichard Lawler
We may not find out which two parties will “sign separate bonds in lesser amounts” in addition to the $250 million personal recognizance bond co-signed by Bankman-Fried’s parents. SBF’s lawyers are requesting to keep their info private.
That arrangement has allowed the FTX co-founder to stay with his parents in California after being extradited from the Bahamas, although he is due to appear in court in New York City again today at 1:05PM ET. As Bloomberg reports, he is expected to plead not guilty to the many criminal charges he’s facing.
Dec 30, 2022, 7:45 PM UTCRichard Lawler
According to out-on-bail FTX co-founder Sam Bankman-Fried, discussing suspicious transactions on crypto wallets linked to him and FTX / Alameda Research.
We don't know who is moving the funds, but we do know that SBF just can't shut up, apparently even while his former associates are copping pleas for fraud and cooperating with prosecutors.
Dec 30, 2022, 2:12 PM UTCJustine Calma
The country’s Securities Commission took control of the assets soon after the crypto exchange filed for bankruptcy in the US in November, and the value is based on crypto prices at the time — it’s likely changed significantly since then.
The regulator “determined that there was a significant risk of imminent dissipation as to the digital assets under the custody or control of FTXDM to the prejudice of its customers and creditors,” it said in a Dec. 29 media release. That tracks.
[Reuters]
Dec 29, 2022, 3:04 PM UTCRichard Lawler
I think that’s everything for now, but follow our stream for more updates.
Bloomberg digs into the $546 million loan Sam Bankman-Fried used to buy a piece of Robinhood.
CNBC follows $200 million diverted by FTX to invest in crypto companies.
NBCNews looked at North Dimension, a fake electronics retailer that somehow helped SBF redirect money wired in by FTX customers.
Investors in the Winklevoss’ twins Gemini Trust Earn say they were wiped out when it abruptly shut down after FTX folded, and now they’re suing.
And someone leaked API keys for thousands of crypto traders who used a service called 3Commas. CoinDesk reports dozens of users have lost millions in hacks over the last few months, with 3Commas claiming they must have been victims of phishing attacks.
Oh, and the feds are investigating the $372 million in crypto that conveniently went missing just after FTX shut down.
[Bloomberg.com]
Dec 28, 2022, 4:50 AM UTCRichard Lawler
Reuters reports that authorities in Puerto Rico have arrested Avraham Eisenberg for the October incident referenced in his tweet below.
By his own admission, he used a cryptocurrency protocol for the MNGO token in a way that flattened the Mango Markets exchange, draining $110 million before negotiating the return of $67 million to Mango to make its users whole.
While some might say this is legal because “code is law,” the FBI apparently disagrees. Eisenberg faces charges of commodities fraud and commodities manipulation, which you can read in the now-unsealed complaint (pdf).
Dec 27, 2022, 5:31 PM UTCMitchell Clark
Bloomberg has produced a great mini-documentary on Heather Morgan and Ilya Lichtenstein, a couple accused of attempting to launder billions in Bitcoin from the 2016 Bitfinex hack — crypto scheming that well predates Sam Bankman-Fried and the FTX meltdown.
You may remember Morgan better as Razzlekhan, the name she used to release rap songs about being the “Crocodile of Wall Street,” among many other things. Earlier this year, I listened to all of her publicly-available songs and watched hours of her TikTok and YouTube videos to write an explainer — if you’d like a sample of what my therapist has to hear about, you can read that here.
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