FTX collapse Financial News

According to a November 30 filing by FTX debtors, the IRS tax claims of $24 billion filed in early November are “completely unsubstantiated” and FTX has now requested that the claims be dismissed by the bankruptcy court.

In an X social media post on Wednesday, Jesse Powell, the co-founder of Kraken, criticized venture capital firms for their role in what he described as "obvious fraud" at FTX, led by Sam Bankman-Fried (SBF). 

Sam Bankman-Fried's attorneys have raised concerns regarding the measures taken by authorities for their client's upcoming criminal trial in October. In an August 25 submission to the United States District Court for the Southern District of New York, the legal representatives argued that the measures proposed by the prosecutors were not adequate for the FTX founder to fully prepare for his trial.

FTX Trading on Thursday sued founder Sam Bankman-Fried and other former executives of the cryptocurrency exchange, seeking to recoup more than US$1 billion they allegedly misappropriated before FTX went bankrupt.

cryptocurrencies in the wake of the recent shocks witnessed in the crypto market. Last year's episode of FTX's bankruptcy following a spat with Binance triggered a huge sell-off in the market and reduced liquidity. This event made the world realise the vulnerability of this asset class as they do not have any underlying value.

defunct crypto exchange FTX asked a judge to approve the sale of its interest in a fund of venture capital firm Sequoia Capital to an Abu Dhabi state-backed investment firm, in a deal valued at $45 million. FTX agreed to sell the interest in the Sequoia Capital Fund, which previously belonged to its sister trading outfit Alameda Research’s venture arm, to Al Nawwar Investments RSC Limited on Wednesday, its estate said in a filing to Delaware’s bankruptcy court late that same day. Al Nawwar is a subsidiary of an investment fund wholly owned by the Abu Dhabi government, and is an existing investor in the Sequoia fund. Alameda had acquired the stake in March 2022 for an aggregate capital commitment of $100 million, the filing said. To date, around $50 million of that commitment had been called up by Sequoia for investment in various portfolio companies. Advisers for FTX have been scrambling to raise money from the failed crypto exchange’s wreckage in order to repay creditors, with around $5 billion in cash and cryptoassets located as of January. Liquidators said that it had decided it was in “the best interest” of the estate to sell its Sequoia stake now because of its size, expected management fees and because its value could diminish if Sequoia chose to make more capital calls in the future.

The swift collapse of the cryptocurrency empire FTX is prompting urgent calls in Washington for legislation to rein in the digital asset industry.

At the height of its corporate power, cryptocurrency exchange FTX convened a group of athletes and celebrities for a charity event in March at the Miami Heat’s NBA arena. Local high school students competed for more than $1 million in prizes, pitching “Shark Tank”-style business ideas to a panel of judges that included David Ortiz, a former Boston Red Sox slugger, and Kevin O’Leary, an actual “Shark Tank” host.

Sam Bankman-Fried, founder of the collapsed cryptocurrency exchange FTX, made his first public appearance Wednesday since his business empire imploded this month, insisting that he “did not ever try to commit fraud” and repeatedly saying he didn’t know the extent of what was going on within his crypto businesses.

Indian crypto entrepreneurs said they are implementing measures to provide full transparency on their reserve funds to win back investor confidence after the collapse of FTX, the world’s third-largest crypto exchange by trading volumes.

Brazilian crypto advocates are urging lawmakers to give final approval on a bill aimed at boosting oversight of the sector, after the collapse of FTX – once an industry darling – raised fresh concern about unregulated digital currencies.

In the aftermath of the collapse of FTX, renewed calls have been heard for a more stringent disclosure mechanism to be adopted by cryptocurrency exchanges.

David Yaffe-Bellany

At least $1 billion of customer funds have vanished from collapsed crypto exchange FTX, according to two people familiar with the matter.