Crypto Fintech & e-commerce Web3

Web3 Weekly: The New Year Ushers In More FTX Intrigue

This is a weekly feature that will look back at the week that was in crypto, blockchain and Web3, and offer insights and analysis. Check out our previous column here.

Normally the beginning of the year can be sluggish for news, but the crypto industry has never followed traditional trends.

On Tuesday, disgraced FTX founder Sam Bankman-Fried pleaded not guilty to eight criminal counts involving FTX’s and Alameda Research’s collapse in a New York federal court.

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Of course, that is only one aspect of the myriad of legal issues Bankman-Fried finds himself facing now, as both the SEC and the Commodity Futures Trading Commission also wait their turns.

While Bankman-Fried’s plight in a courtroom likely will continue to make most of the headlines involving FTX’s dramatic fall, another intriguing — albeit likely less newsworthy — drama is playing out in the Bahamas.

Through the past few weeks, both Bahamian regulators and FTX’s new management issued releases disputing each other’s take on the company’s assets, among other interesting issues.

The main issue of contention centers on money transferred to the Securities Commission of The Bahamas after FTX declared bankruptcy in November.

The commission said it received $3.5 billion worth of FTX’s assets at that time (obviously it would be a lesser number now considering the state of the crypto market).

However, FTX management has challenged that assessment, saying the assets seized were worth about $296 million at the time.

The commission already has accused new FTX CEO John J. Ray III of “key misstatements” as he attempts to clean up the exchange’s mess for debtors.

In the commission’s most recent news release, it accused FTX’s new management of a “lack of diligence” when making public statements and having “a cavalier attitude towards the truth and towards the Bahamas.”

The release also disputed what it said were public statements made by Ray alleging the commission gave instructions to FTX to mint as much as $300 million in FTT tokens.

While it’s true no one knows for sure what this new year will bring, it’s a near lock to have a lot of FTX-related headlines, intrigue and lawsuits.

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Illustration: Dom Guzman

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