Demond Cureton

FTX attorney Andy Dietderich recently stated the bankrupt crypto exchange “recovered $5 billion in cash and liquid cryptocurrencies,” media reported this week.

In an 11 January statement to US bankruptcy judges in Delaware, FTX was “working to rebuild transaction history.” The collapsed exchange’s total amount of missing funds was also “still unclear,” it added.

Reports show recovered assets do not include the Bahamian Securities Commission’s seized assets from FTX. This mostly includes the exchange’s native FTT token.

He also noted FTX would sell $4.6 billion in non-strategic investments such as subsidies from its Japanese and European branches. The two segregated from FTX’s main operations.

FTX Japan previously had a sponsorship agreement with online multiplayer game League of Legends. Following the collapse, the branch pledged to return funds to affected clients.

Judge John Dorsey, who presides over the case, also approved FTX’s request to sell off FTX Europe and other branches. According to Dietderich, FTX has not committed to a sale to date.

Background on FTX Crisis

The news comes after FTX faced a massive liquidity crisis in November. This triggered a huge bank run on its FTT token and the subsequent collapse of the firm, leaving over $8 billion in liabilities.

Courts later approved FTX’s request to anonymise client names for three months after identity theft claims. Currently, US courts have organised a task force to recover the crypto funds.

The news comes after the exchange’s disgraced ex-chief executive, Sam Bankman-Fried, pleaded not guilty to all criminal charges. According to reports, the crypto exchange splurged $40 million on travel, hotels, and

Caroline Ellison, research wing Alameda Research’s ex-CEO, struck a plea deal with courts. This would drop seven of the eight charges previously faced, which totalled 110 years in prison.

Crypto exchange Zipmex has become the centre of a new Securities and Exchange Commission of Thailand (Thai SEC) investigation, reports have found.

According to Bloomberg, Thailand has been monitoring Zipmex for suspicious activities that could breach local regulations. Such restrictions apply to digital asset service providers operating in the country.

The ongoing developments between the two entities began later in 2022. On 7 September the same time, the government agency filed police reports stating Zipmax provided “incomplete” details on its compliance materials.

The organisation has set a 12 January deadline to determine whether it operates as a “digital asset fund manager without permission.” The cryptocurrency exchange could be forced to obtain permits to continue functioning in the Southeast Asian nation.

Lock Out, Crack Down on Crypto?

The news comes as Thoresen Thai Agencies PCL subsidy V Ventures aims to buy out Zipmex for roughly $100 million USD. This could potentially unlock client accounts in April this year with acquisition funds.

Financial woes hit the embattled cryptocurrency exchange on 21 July last year, forcing the firm to block access to accounts and funds. Subsequently, the firm reopened withdrawals the following day.

The incident exposed nearly $53 million USD to risk, hitting crypto lending firms Celsius and Babel Finance. This has prompted Thailand, Australia, Israel, South Korea, the United States, and others to crack down on crypto providers with tougher regulations.

Governments have voiced concerns amid the ongoing bear crypto market and collapse of now-bankrupt crypto firm FTX, sparking calls for tightened restrictions.

Internet investigator Stephen “Coffeezilla” Findeisen has received lawsuit threats due to a row on YouTube, recent tweets have found.

YouTube personality Logan Paul threatened the lawsuit in a recent video, triggering social media to erupt over the matter. Findeisen released a three-part video series accusing Paul’s CryptoZoo crypto project as a “scam,” leading to the online row.

Making Amends

In a 6 January tweet, Paul pledged to rescind a potential defamation lawsuit for Findeisen’s videos. The former later apologised for his video response to the Coffeezilla videos.

In a statement, Paul said: “It was rash and misaligned with the trust issue at hand, so I called him today and apologized. The war is not with Coffee. In fact, I’m grateful he brought this to light. I will be taking accountability, apologizing, and coming forward with a plan in the near future.”

Responding to the apology, Coffeezilla replied: “I believe he’s making a 3rd response, which I’ll be delaying my video to include. Hopefully this time he takes accountability and refunds the victims of CryptoZoo. That’s what matters.”

Now-bankrupt cryptocurrency platform FTX spent millions of dollars on food, swanky accommodation, and flights around the world nine months before it went into administration, documents reveal.

According to court filings cited by the Business Insider report, FTX Digital Markets stumped up over $40 million USD. This took place from January to September last year, just months ahead of its collapse on 11 November.

Room and Board (of Executives)

Despite the company citing alleged “liquidity issues” for its bankruptcy, it spent over $15 million for luxury accommodation. The Albany Hotel, where disgraced chief executive Sam Bankman-Fried resided prior to his arrest, cost roughly $5.8 million of the firm’s hotel expenses.

Business Insider explained:

“In 2021, one of the Albany’s founders told Fortune that in high season, accommodation at the resort can cost as much as $60,000 per night. $3.6 million of FTX’s hotel spend went to the Grand Hyatt, a 4-star hotel where the cheapest room costs $369 a night. In March 2022, the hotel hosted the Caribbean reception for Prince William and Kate, Princess of Wales. FTX spent $28,954 at the hotel the same month”

FTX splashed out a further $3.6 million to the four-star Grand Hyatt, where Britain’s Royal Family stayed in March last year. Executives and others from the company racked up $800,000 in expenses at the five-star Rosewood Resort.

Living La Vida Loca

Also, the firm spent nearly $7 million on food and leisure, where half of the bill paid for catering. FTX staff also spent around $4 million on travel costs and $500,000 on deliveries and donated regularly to charities and organisations in the country.

The Bahamian company also provided local staff with a “full suite of cars and gas covered for all employees [and] unlimited, full expense covered trips to any office globally,” the report said.

Additional expenses included private flights for Amazon orders to Miami as the firm does not deliver to the island country. According to a former staff member, FTX’s lavish expenditures were “cult-like” and the business was “iconically and moronically inefficient.”

Room Without a View

Bahamian authorities arrested Sam Bankman-Fried from his luxury accommodation in mid-December last year. He has plead not guilty in early January to eight charges, which include fraud, defrauding investors, and others. He awaits further hearings from at the US District Court in the Southern District of New York.

Caroline Ellison, the former chief executive for Alameda Research, agreed to a plea deal with courts to eliminate seven of eight counts of fraud, funds mismanagement, and other offences.

New York Attorney General, Letitia James, filed a lawsuit on Thursday against a former executive of bankrupt cryptocurrency lending platform Celsius.

Alex Mashinsky, the founder and ex-chief executive of the crypto platform, issued “false and misleading statements,” leading to massive losses for investors, she said in her lawsuit.

In a tweet on Friday, she said that “defrauding hardworking New Yorkers is not only shameful, it’s also illegal.”

The fraud issues have cost over 26,000 residents in New York billions in cryptocurrency investments, litigation said. It added the company failed to represent its financial health and follow regulations at the time.

She said in her statement,

“As the former CEO of Celsius, Alex Mashinsky promised to lead investors to financial freedom but led them down a path of financial ruin. The law is clear that making false and unsubstantiated promises and misleading investors is illegal. Today, we are taking action on behalf of thousands of New Yorkers who were defrauded by Mr. Mashinsky to recoup their losses.”

She continued: “Today, we are taking action on behalf of thousands of New Yorkers who were defrauded by Mr. Mashinsky to recoup their losses. My office will stay vigilant and ensure that bad actors trying to take advantage of New York investors are held accountable.”

The news comes after Celsius declared Chapter 11 bankruptcy in July last year, locking scores of customers from their accounts and forcing Mashinsky to resign.

Courts issued a verbal order for Celsius to pay back its clients a total of $44 million USD, reports revealed. The company recently struck a deal with advisors and stakeholders to declare custodial accounts as the property of users and not centralised wallet holders.

Singaporean courts subpoenaed Three Arrows Capital (3AC) founders Kyle Davies and Zhu Su on Thursday last week.

In a public tweet, 3AC Liquidation, the official court-appointed joint liquidators of the firm, published the documents on their feed at the time.

The court order shows authorities summoning Davies, a US citizen, to appear before judges to resolve concerns over the collapse of the Singaporean firm.

Liquidators for the massive company aim to receive key evidence from the company, including accounts, private keys, wallets, and seed phrases, among others. It also aims to investigate data on the firm’s securities, unregistered shares, and accounts on its exchanges.

It said that the founders should “produce at the time, date, and place set forth below the following documents, electronically stored information, or objects, and to permit inspection, copying, testing, or sampling of the material.”

The subpoena requested that Su and Davies “furnish all documents available to you regardless of whether this information is possessed directly by you, your agents, representatives, employees, or investigators; or by any other legal or non-legal entities controlled by or in any manner presently or precisely affiliated with you.”

The news comes after the firm filed for bankruptcy in July last year, triggering Singapore’s Monetary Authority (MAS) to crack down on cryptocurrency platforms.

The government body passed several measures to regulate digital payment token service providers (DPTSP) and stablecoin issuers. Coins affected included Bitcoin, Ethereum, and XRP, and aim to protect consumers from risk and boost stablecoin transactions.