FTX Latest: Principal Sam Bankman-Fried Deputies Fired From Company
Buzz Update FTX Latest: Principal Sam Bankman-Fried Deputies Fired From Company
(Bloomberg) – FTX said it fired three senior aides to former CEO Sam Bankman-Fried, The Wall Street Journal reported.
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Meanwhile, the collapse of the crypto empire is turning into a new political battlefront as Republicans highlight the ties between Democrats and their former benefactor Bankman-Fried.
On Friday, Republican Senator from Missouri Josh Hawley sent out a broad request for correspondence between federal agencies and Democrats, including the Biden administration and the House and Senate Democratic campaign committees, regarding the crypto exchange. bankrupt FTX and trading house Alameda Research. Hawley said he’s trying to figure out whether Bankman-Fried’s political donations of more than $37 million to Democrats may have created pressure on regulators to be lenient with the former crypto executive.
The chairman of a House panel is asking FTX to turn over documents and information by December 1 as part of its investigation into the collapse of the crypto platform.
Key stories and developments:
FTX Bankruptcy Bombs Press Crypto Lenders Behind Bull Run
Wall Street Beat: FTX Lesson in Taking Funds Through Debt and Tokens
FTX’s Tipping Point Was Ellison’s Trade Data Show Tweet
Bankman-Fried’s Island Haven Comes Under Heavy Scrutiny After FTX Disappears
Fixed FTX Existential Crisis; TMT’s mega-cap problem (podcast)
(Time references are New York, unless otherwise specified.)
FTX Fires Senior Deputy Sam Bankman-Fried, WSJ Reports (10:07 p.m.)
FTX said it fired three senior aides to former CEO Sam Bankman-Fried, The Wall Street Journal reported.
FTX co-founder and chief technology officer Gary Wang, chief engineering officer Nishad Singh and Caroline Ellison, who led Alameda Research, have been removed from their positions, the newspaper said, citing a spokeswoman for FTX Friday night. The newspaper did not say whether it was trying to reach the executives for comment.
They left those roles after FTX appointed John J. Ray to oversee the bankruptcy, according to the report. The newspaper previously reported that executives were aware of the decision to send customers’ money to trading company Alameda.
Hawley searches for emails from Democrats as FTX meltdown turns political (4:04 p.m.)
The collapse of the crypto empire founded by political mega-donor Sam Bankman-Fried is turning into a new political battlefront as Republicans highlight the ties between Democrats and their former benefactor.
On Friday, Republican Missouri Sen. Josh Hawley sent out a broad request for correspondence between federal agencies and Democrats, saying he was trying to determine whether Bankman-Fried’s political donations of more than $37 million to Democrats might have created pressure on regulators to be lenient with the former crypto executive.
Short Sellers Jump on Crypto Stocks Despite High Betting Costs (2:44 PM)
Short sellers have pounced on crypto-focused stocks as the digital asset space plummets following FTX’s public implosion.
Crypto stocks are almost three times shorter than the average share, even though short sellers pay nearly eleven times more in funding fees to bet against them, according to data compiled by Ihor Dusaniwsky and Matthew Unterman at S3 Partners.
According to analysis by S3, traders betting on losses from a handful of crypto stocks, including Block Inc., Coinbase Global Inc., MicroStrategy Inc. and five others, added $55 million in new shorts to the during the week until Friday. The total crypto short interest for these eight stocks is over $4.5 billion.
Silvergate Shares Slide as FTX Fallout Lures Short Sellers (1:16 p.m.)
Shares of Silvergate Capital Corp. crashed, putting them on course to lose a quarter of their value this week as investors punished the bank for its ties to bankrupt FTX.
Shares of the company, which held deposits for FTX, fell 9.9% to $25.14 at 1:03 p.m. in New York. Thursday’s nearly 11% drop triggered a short selling circuit breaker. Data from S3 Partners indicates that short-term interest levels in Silvergate are around 11% of shares available for trading.
FTX examines years of lawsuits to recover billions from customers (1:12 p.m.)
FTX’s bankruptcy opens the door to likely lawsuits from creditors seeking to recover billions of dollars in assets that customers and insiders withdrew before the crypto firm’s abrupt Chapter 11 filing.
As the company’s advisers scramble to get its finances under control, they will have a list of bankruptcy tools that will allow them to try to funnel funds back into the FTX empire to try and pay all creditors, though. that effort will likely take years.
Crypto Fallout Leaves US Retiree Benefits Virtually Unscathed (12:35)
Most of the largest US state and local government pension funds have dodged the ongoing fallout from the collapse of crypto exchange FTX by not investing directly in digital tokens. For pensions that have plunged into the risky asset class, investments represent only a small portion of the pension fund portfolio, and much of the limited exposure is indirect via crypto-related stocks or other investment products.
According to an informal Bloomberg survey, almost all of the top 10 US pension funds by assets said they were not invested in Bitcoin or any other cryptocurrency.
House Panel Seeks Documents in FTX Explosion Investigation (11:13 a.m.)
The chairman of a House panel is asking FTX to turn over documents and information by December 1 as part of its investigation into the collapse of the once-important crypto platform.
“FTX customers, former employees and the public deserve answers,” Rep. Raja Krishnamoorthi, chairman of the House Oversight Subcommittee on Economic and Consumer Policy, said in a letter to the House Friday. former FTX CEO Sam Bankman-Fried and John J. Ray III, the new CEO and chief restructuring officer who oversaw the liquidation of Enron Corp.
He asked for details about the circumstances surrounding the crypto firm’s bankruptcy last week, including an explanation of the company’s liquidity issues, how those issues at the Bahamas-based parent company affected its US arm and details of how client funds were used. The subcommittee is also looking for internal documents and communications.
FTX auditor defends job as new CEO slams finances (10:57 a.m.)
The auditors of FTX Trading Ltd. are defending their work, even after the imploded crypto exchange’s new management lambasted auditors in a jaw-dropping bankruptcy filing.
“We believe that the financial statements of FTX Trading Ltd. as of 12/31/21 were fair and we support our audit opinion,” New York-based accounting firm Prager Metis CPAs LLC said in a statement. reported to Bloomberg Tax.
FTX CEO Bankman-Fried Dumped By Paul Weiss Over Conflicts (10:47 a.m.)
Paul Weiss said on Friday he had stopped representing crypto mogul Sam Bankman-Fried, citing conflicts of interest.
Bankman-Fried, the former CEO of bankrupt FTX, is losing the firm’s help as the platform’s US lawyers say he is disrupting reorganization efforts with “relentless and disruptive tweets”.
Fed’s Kashkari Says “The Entire Notion of Crypto Is Nonsense” (9:55 a.m.)
Minneapolis Federal Reserve Chairman Neel Kashkari on Friday said the whole cryptocurrency idea was “nonsense” after the FTX Group implosion exposed the industry’s shortcomings.
“This is not a fraudulent company in a serious industry,” Kashkari tweeted, commenting on a post about how investors fell in love with FTX. “The whole notion of crypto is nonsense. Not useful 4 installments. No inflation hedge. No rarity. No tax authority. Just a tool for speculation and bigger fools.