The biggest crypto news and ideas of the day |
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Hello and welcome to The Node. This is Daniel Kuhn and Xinyi Luo, here to take you through the latest in crypto news and why it matters. In today's newsletter: |
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FTX Files for Bankruptcy Protection in US: FTX Group, which includes FTX.com as well as FTX US, Alameda Research and approximately 130 "affiliated companies," has filed for bankruptcy protection in the U.S. and CEO Sam Bankman-Fried resigned. A bankruptcy filing said Alameda Research had between $10 and $50 billion in liabilities and a similar range in assets, and estimated that "funds will be available for distribution to unsecured creditors." - John Ray III, a law veteran of the Enron bankruptcy, will come in as CEO. CoinDesk's Tracy Wang broke news on the cabal of 10 roommates and lovers, including Alameda CEO Caroline Ellison, ran SBF's crypto empire from a penthouse in the Bahamas – often keeping employees in the dark.
So will investors get paid? The size of FTX and Alameda's total losses is unknown, and will likely increase as their token holdings drop in value. FTX holds ~$600 million in wallets tracked by Dune, a 76% decline since last week's $2.6 billion figure. FTX's biggest holding remains its own FTT token, while Alameda's largest holdings are in USDC and other stablecoins. Crypto Lender BlockFi Pauses Withdrawals in Wake of FTX Collapse: BlockFi said it could not conduct business as usual and would pause client withdrawals because of FTX's collapse and "lack of clarity." This comes after the company said Tuesday that "all BlockFi products are fully operational" and the company is functioning independently. - Earlier this year, a cash-strapped BlockFi had made a deal with FTX to backstop losses during a severe market decline.
- Meanwhile, crypto trading firm Wintermute ceased trading and moved all of its funds from FTX US as firms look to salvage what they can. FTX-backed crypto unicorn LayerZer bought out its equity investments from FTX, FTX Ventures and sister firm Alameda Research.
Coinbase Sheds Roughly 60 Jobs as Cost-Cutting Continues Amid Bear Market: The crypto exchange has laid off just over 60 people but said the latest reductions were "isolated and targeted." In June, the company laid off around 1,100 employees, or 18% of its workforce at the time. |
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Putting the news into perspective |
(Nas Daily/YouTube) How SBF's 'Effective' Altruism Blew Up FTX Sam Bankman-Fried, founder of Alameda Research and FTX, believed he was uniquely suited to fix the world's problems. Instead, he wound up exemplifying them. David Z. Morris writes about how SBF's chosen political philosophy – called effective altruism, which encourages people to make as much money as possible to donate later – also provided cover for the former billionaire philanthropist's many moral failings. Read the full article here. |
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Overheard on CoinDesk TV... |
"The SEC would be a good regulator for spot crypto markets if we got our act together." – Securities and Exchange Commissioner Hester M. Peirce, on CoinDesk TV's "First Mover" |
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- The Crypto Ponzi Scheme Avenger (NYT - paywalled)
- Stripe, Deloitte, Sullivan & Cromwell Are Among 53 FTX Advisors, Vendors And Bankers Weathering Exchange's Collapse (Forbes)
- FTX's Bankman-Fried Quietly Invested More than $500 Million in Sequoia and Other VCs (The Information - paywalled)
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