Alameda Was Unliquidateable - They Rigged the Game and Still Lost
Daily Bullets: Thursday, November 17th
The bombshells simply do not stop dropping. Each day we find out something more egregious than the last. New developments in the SBF saga:
When even the guy who was brought in to clean up the Enron disaster says he’s never seen such a mess before... You know it’s bad.
FTX Saga Timeline Week 2 continued:
- SBF Twitter DM with Vox journalist article - admits his altruistic facade was a lie
- SBF received $1B in loans from FTX-related silo companies
- Binance role in FTX collapse under congressional scrutiny
- New FTX CEO - “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here”
- Multicoin Capital lost more than half of its flagship fund’s capital in about two weeks
- Gemini saw a $485M rush of outflows amid contagion fears. Operations returned to normal
- OKX and Crypto.com also experienced 'severe' outflows
- Deposits of Solana USDC & USDT temporarily suspended by Binance, OKX, KuCoin and ByBit
- Binance.US is preparing to bid for bankrupt lender Voyager Digital - previously made a $50M bid
- Other bidders: crypto investment manager Wave Financial and trading platform CrossTower
- Analytics firm Chainalysis is owed money in the FTX bankruptcy proceedings
- FTX exploiter again swapped thousands of stolen BNB into ETH, BUSD
- Bahamian liquidators say FTX wasn’t authorized to file for bankruptcy in the US
- Troubled Asian crypto lender Vauld has about $10M stuck on FTX
- Avalanche founder says they had very little exposure to FTX
- Circle Yield had Genesis as a counterparty with $2.6M in customer loans outstanding
- Paxos customer assets not impacted by FTX/Alameda
- Canadian exchange Bitvo terminated its expected acquisition agreement with FTX
Neat visual graphic:
Now for a more expanded and detailed look at the day…
Crypto News:
- Neobank Revolut to launch a lightweight version of its app in the coming months with features such as instantaneous cross-border transfers targeting lower-income countries such as Latin America, Southeast Asia, and the Middle East
- El Salvador’s president Nayib Bukele announced that the Central American nation will begin purchasing one Bitcoin every day
- Youtube vid - What the Media Refuses to Say About FTX
- Arbitrum Decentralization Update - Expanded Validation on Arbitrum One
- ConsenSys is launching the Ethereum Climate Platform (ECP) at COP27’s UN Climate Change Global Innovation Hub - the initiative aims to address Ethereum’s excess energy consumption before it went through the Merge
- Cardano blockchain builder Input Output Global (IOG) funded a $4.5M research hub at the University of Edinburgh. Made similar investments at Stanford and Carnegie Mellon
Economic/Government/Regulatory:
- U.S. prosecutors have asked a court to sentence Greg Dwyer, Bitmex's former head of business development, to 12 months of probation for violating the U.S. Bank Secrecy Act
- A South Korean court has approved a request by prosecutors to seize and pre-trially secure the assets of Terraform Labs co-founder Daniel Shin about $104M for allegedly selling pre-release Luna
- Silvergate Bank, a provider of financial services to the digital currency industry, was recently subpoenaed and found to have $425M in transfers among its crypto bank accounts to South American money launderers
- Australian Securities Exchange (ASX) shelved its seven-year-long project to ramp up the exchange’s CHESS clearing and settlement system using blockchain after an independent audit by Accenture reported issues - writes off $170M
- Wells Fargo and HSBC expanded their blockchain-based system for settling foreign exchange transactions to include the offshore yuan
Exchange News:
- SBF Twitter DM with Vox journalist article - admits his altruistic facade was a lie
- Binance role in FTX collapse under congressional scrutiny
- Crypto exchange Gemini saw a $485M rush of outflows amid contagion fears however operations returned to normal. OKX and Crypto.com also experienced 'severe' outflows
- A bankruptcy filing from FTX chief restructuring officer John Ray III highlights that SBF received $1B in loans from FTX-related silo companies
- Binance.US is preparing to bid for bankrupt lender Voyager Digital - previously made a $50M bid for Voyager but lost it to FTX.US. Other bidders included crypto investment manager Wave Financial and trading platform CrossTower
- Troubled Asian crypto lender Vauld has about $10M stuck on FTX
- New FTX CEO John J. Ray III issued a scathing assessment of "unprecedented" poor management practices by his predecessor, SBF. “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here”
- Analytics firm Chainalysis is owed money in the FTX bankruptcy proceedings
- Binance deposits of USDC (SOL) and USDT (SOL) have been temporarily suspended. OKX will delist USDC-Solana and USDT-Solana. KuCoin and ByBit as well
- FTX exploiter again swapped thousands of stolen BNB into ETH, BUSD. The attacker appears to convert the illicitly gained funds around the same time every day
- Bahamian liquidators say FTX wasn’t authorized to file for bankruptcy in the US since everything falls under the “FTX Digital Markets” umbrella - a Bahamian entity, subject to Bahamian law. They also cite ‘serious fraud and mismanagement’ in court filings
- Avalanche founder says they had very little exposure to FTX
- Cryptocurrency-focused asset manager Multicoin Capital lost more than half of its flagship fund’s capital in about two weeks. Excludes illiquid, side-pocketed, investments. 9.7% of fund assets, including derivatives, that were custodied by FTX
- Circle Yield, an overcollateralized fixed-term yield product, had Genesis as a counterparty. Total Circle Yield customer loans outstanding are $2.6M
- Paxos customer assets are always segregated, bankruptcy remote and were not impacted by FTX/Alameda
- Canadian cryptocurrency exchange Bitvo terminated its expected acquisition agreement with FTX to continue operating independently
- 0xScope launches exchange transparency dashboard on 0xWatchers
- Coinbase assets added to the roadmap: MultiversX (Previously Elrond) (EGLD)
DeFi News:
- Uniswap suffered an outage affecting some users caused by a routing problem at internet infrastructure firm Cloudflare
- Goober is a farm for fractional Gobblers & Goo. It allows users to permissionlessly swap Art Gobblers & Goo as well as deposit Goo and fractionalize their Gobblers in order to maximize their Gobbler & Goo accrual without the need for active management
- Yearn <> CoW Swap - allows complex swaps in CoW Swap like, 3CRV <-> yvSNX
- Sushi past 2-3 weeks of software/biz dev, & DAO activity update
- MakerDAO holds ~483M GUSD the PSM, a module fully controlled by MakerDAO and the Maker Protocol
- Introducing yBribe. Yearn’s new bribe platform for Curve gauge voting
NFT/Gaming/Metaverse News:
- Adidas unveils its first NFT wearable collection, Virtual Gear, which includes 8 silhouettes within 16 variations
- Chainlink launches NFT floor price feed service on Ethereum, which will first support 10 NFT series, including Azuki, BAYC, CloneX, Cool Cats, etc - supported by Coinbase Cloud’s aggregation algorithm and Chainlink’s oracle infrastructure
- First ever Sei NFT is here. Wallet addresses that made 10+ transactions on Seinami testnet after Nov. 8th are eligible to mint a "Dawn" Sei NFT
- Red Bull Racing will close out a successful Formula 1 season with an NFT emblazoned on both drivers’ vehicles at the Abu Dhabi Grand Prix
- Justin Bieber paid $1.3M for a Bored Ape NFT that’s now worth $69K
- Coachella NFTs sold for $1.5M and are now stuck on FTX. FTX NFTs users say they can’t withdraw assets from the platform
Fundraises:
- Binance signed 8 investment deals
- ADDX raised $20M in an upsized Pre-Series B funding round. Joining their board is new shareholder KB Securities, subsidiary of Korea’s largest banking group KBFG
- As part of its partnership with the TON Foundation, DWF Labs has announced a commitment to allocate $10M to support the TON ecosystem
- Virtualness, a mobile-first platform designed to help creators and brands navigate the complex world of Web3, secured over $8M in seed funding. The fundraise was led by Blockchange Ventures, and joined by Polygon Ventures, F7 Ventures, Micron Ventures, Oceans Ventures
- Web3 Music Platform Element Black raised $6M from Central Research Capital, JKL Group, Aralern Capital and other institutions
- Heroic Story, a web3 gaming and entertainment studio, has raised $6M in a seed round led by Upfront Ventures
- Revv comes out of stealth with $5.5M seed raise to build out marketplace infrastructure in DeFi
- Colombia-based crypto wallet platform Zulu raised a $5M seed round led by Cadenza Ventures
- Development company Anode Labs has raised $4.2M in a seed round to build a decentralized network that will pay individuals and small businesses for their energy storage assets
Early Stage Projects:
- Humanode Mainnet is live and ready for participation. Claim tokens needed to deploy the node
- Announcing SSX: Self-Sovereign Anything - the easiest way to get started with decentralized identity and install Sign-In with Ethereum
- Lemma Finance v2 protocol: LemmaSwap - a completely new protocol for swapping spot assets using perpetual futures liquidity
Data:
TL;DR: Over the past 7 days, Nansen Smart Money has primarily been moving into BUSD, cbETH, USDT, MATIC and USDC and has moved primarily out of cUSDC, cETH, WETH and WBTC. Despite the uncertain environment, there was a volume spike for NFT project Rarepass however the floor price is down 50% in the past 24 hours.
- Nansen Smart Money Holdings Token Inflow and Outflows: Tracking what the whales are up to...
Weekly:
- Inflow (7D):
- Outflow (7D):
- Nansen NFT Hot Contracts:
Research/Reads:
- Sam Bankman-Fried tries to explain himself - source
- a16z - Achieving Crypto Privacy and Regulatory Compliance - source
- Jarvis Labs - Welcome to the Jungle - Market Update: The Danger That Sits Above - source
- WuBlockchain - Lawyer: Taiwan FTX Victims' Status, Causes and Subsequent Events - source
- The World Cup is approaching: Will football-themed Tokens become hot? - source
- Ultimate Guide to Undercollateralized Lending in DeFi - source
Crypto Twitterverse:
More bad behavior…
Co-mingling user deposits between FTX & Alameda wasn't enough.
They embezzled billions for themselves.
SBF: $1b
Nishad Singh: $540m
Ryan Salame: $55m (People keep forgetting he was one of the largest donors to the republicans)When clawback from politicians?
— Hsaka (@HsakaTrades)
Nov 17, 2022
When you rig the game and still lose
Alameda was secretly exempted from FTX's auto-liquidation protocols.
LITERALLY GOD MODE.
— wassielawyer (@wassielawyer)
Nov 17, 2022
Elon Musk’s rules
Elon Musk’s leaked email.
His 6 rules for insane productivity:
(Used at Tesla, Space X & now Twitter)
— Liam “The Cleaning Guy” (@LiamKircher)
Nov 16, 2022
Dark pools is such a shady sounding name
Schwab, Fidelity, and Citadel launch EDXM cryptocurrency exchange with plans to internalize trades. Partners include Sequoia, Paradigm, and Virtu⚠️
Ladies and Gentlemen, I introduce your first Crypto Dark Pool. And the gang is all here.
— M.B. (@741trey)
Nov 16, 2022
Thank you for another long thread
1/82
I'll be pinning this detailed timeline, as my final piece covering this topic, as now the case is closed in my mind.
This was a crime plain and simple and I'll put no more wind in this criminals sails:
FTX: Meltdown.
The definitive and chronological thread.
— Adam Cochran (adamscochran.eth) (@adamscochran)
Nov 16, 2022
Nice little visual guide
I've started a chart to track the FTX contagion.
mollywhite.net/etc/ftx-contag…
— Molly White (@molly0xFFF)
Nov 16, 2022
Did we miss anything or is there anything you want to discuss? We’d Love to hear your feedback and engage with the community! Feel free to leave a comment and let us know your thoughts on the Crypto market!
Subscribe to receive our brief daily and extended weekly newsletter along with in-house research content!