The Securities Commission of The Bahamas said it moved $3.5 billion from FTX’s Bahamian subsidiary, FTX Digital Markets, into its own digital wallets.
The watchdog said the funds are being held on a “temporary basis” until it is directed by the country’s Supreme Court to deliver them to customers and creditors, or to liquidators.
The regulator took the funds after receiving information from Sam Bankman-Fried concerning cyberattacks on the systems of FTX’s Bahamian unit, it said.
The FTX logo on a laptop screen.
Andrey Rudakov | Bloomberg via Getty Images
The Securities Commission of The Bahamas says it seized $3.5 billion worth of cryptocurrency from collapsed crypto exchange FTX.
In a media release late Thursday, the watchdog confirmed the total sum taken from FTX’s Bahamian subsidiary, FTX Digital Markets, and added that the funds were moved into its own digital wallets “for safekeeping.”
The regulator had previously confirmed it was holding some of FTX’s digital assets but did not specify the amount.
The funds were valued at more than $3.5 billion, based on market pricing at the time of transfer, according to the commission. The transfer took place on Nov. 12, the day after FTX filed for Chapter 11 bankruptcy protection in the U.S.
The Bahamian securities commission said the funds are being held on a “temporary basis” until it is directed by the Bahamas’ Supreme Court to deliver them to customers and creditors, or to liquidators of the insolvency estate.
The regulator said it took the funds after receiving information from Sam Bankman-Fried, FTX’s disgraced co-founder, concerning cyberattacks on the systems of FTX’s Bahamian unit.
There was “significant risk of imminent dissipation” of the assets under FTX Digital Markets’ control, it said.
After FTX filed for bankruptcy, it was targeted in a suspected hack that saw $477 million drained from the firm’s crypto wallets. The identity of the perpetrator is not yet known.
The Bahamian regulator has been scrutinized over its role in the FTX collapse and subsequent legal proceedings.
The commission wanted to handle insolvency proceedings for FTX in the Bahamas. But FTX’s U.S. lawyers contested the move, alleging in a Nov. 17 filing that the regulator coordinated with Bankman-Fried to gain “unauthorized access” to FTX systems to transfer digital assets to its own custody.
In response, the Bahamian regulator said the claims were “inaccurate,” and that its decision to move the funds was taken to protect the interests of clients and investors.
Bankman-Fried, 30, also FTX’s former CEO, was arrested in the Bahamas and subsequently extradited to the United States, where he is awaiting trial on charges of fraud, conspiracy to commit money laundering, and conspiracy to defraud the U.S. and violate campaign finance laws.
He was released last week on $250 million bail, and has reportedly been receiving visitors at his parents’ California home, including “The Big Short” author Michael Lewis.
Bankman-Fried is expected to be arraigned and enter a plea in federal court in Manhattan on Jan. 3.
Alameda wallets liquidated millions of thousands of Ether based token for Bitcoin in past 24 hours
- On-chain data shows that Ethereum-based assets were added from several wallets and kept in two wallets before the firm later exchanged these assets for Tether’s USDT stablecoins.
- Arkham intelligence data revealed that Alameda Research still holds sizable crypto assets comprising various tokens worth more than $112 million.
On-chain data shows that the embattled trading company, Alameda Research, sold a massive stash of its holdings on December 29, which runs into millions of dollars. The Sam Bankman-Fried-founded crypto trading firm is bankrupt after filing for bankruptcy proceedings along with the FTX exchange in mid-November.
The company’s founders are facing criminal charges from Bahamian and United States authorities over their roles in the spectacular crash of FTX and its sister company, Alameda Research. According to the crypto research firm Arkham Intelligence, about $1.7 million worth of crypto assets from wallets linked to Alameda Research were sold in the crypto market within hours on Wednesday.
Furthermore, the on-chain data showed that Ethereum-based assets like USDC, DAI, CRV, CVX, ETH, and a host of others had been joined from several wallets and kept in two wallets, and the firm later exchanged these assets for Tether’s USDT stablecoins.
Meanwhile, the value of these assets ranged from a fraction of ETH to more than 15 ETH. In addition, the holdings were later converted into BTC from USDT via token-swap service platforms like FixedFloat or ChangeNow, as revealed by the on-chain entity, ZachXBT on Twitter.
Still More to Hold
Furthermore, the Arkham intelligence data revealed that Alameda Research still holds sizable crypto assets consisting of various tokens worth more than $112 million. Before its November bankruptcy filing, Coindesk reported that the company’s previous crypto holdings were at $140 million.
On the other hand, the FTX exchange caved into the liquidity pressure in November after revelations spread that Alameda Research, the hedge fund manager, was heavily backed by the FTX’s native token, FTT. FTX allegedly created the FTT tokens out of thin air to accelerate the ecosystem’s growth and revenue generation.
Launched in 2019, the token initially got significant support from investors because FTX offered some rewards in exchange for possession of the asset. According to previous reports, Sam Bankman-Fried has revealed that FTT comes with “guaranteed liquidity,” indicating no risks in buying the token.
Solana Crumbles under FTX Exposure
Since 2020, Solana, the Layer-1 smart contract protocol, has been the subject of debate about becoming the next competitor to Ethereum. The chain saw immense growth at the peak of the 2020–2021 bull run. However, the recent projects’ withdrawals from the Solana ecosystem were followed by a massive drop in the value of SOL, raising questions about its future projections.
Apart from being unable to displace Ethereum, observers revealed that the fall of Bankman-Fried and FTX is the greatest threat to Solana’s progress. The embattled former FTX owner has been the network’s greatest supporter, and critics argue that Bankman-Fried may be the reason behind SOL’s price appreciation during the 2020–2021 bullish trend.
Solana saw its sharpest price decline in November after the FTX collapse, lending credence to its relationship with the disgraced FTX and Alameda Research founder.
Paul is a cryptocurrency enthusiast from Canada, and since 2021 he has been writing about cryptocurrency for online news portals. He writes mostly news-related articles. Stay tuned to his posts to stay up to date with the crypto world.
FTX founder reportedly cashes out $684K after being released on bail
SBF has allegedly cashed out $684,000 from a crypto exchange in Seychelles while being under house arrest, according to an on-chain investigation.
FTX founder Sam Bankman-Fried is reportedly cashing out large amounts of cryptocurrency soon after being released on bail, on-chain data suggests.
SBF has cashed out $684,000 in crypto to an exchange in Seychelles while being under house arrest, according to the on-chain investigation by DeFi educator BowTiedIguana.
Decentralized finance (DeFi) analyst BowTiedIguana took to Twitter on Dec. 29 to report on a series of obfuscated wallet transactions allegedly linked to SBF, suggesting that the former FTX CEO could have violated release conditions to not spend more than $1,000 without permission from the court.
According to BowTiedIguana’s analysis, SBF’s public address (0xD5758) on Dec. 28 sent all remaining Ether
to a newly created address (0x7386d). BowTiedIguana noted that SBF took over the address that was originally owned by Sushiswap creator from Chef Nomi in August 2020.
Within hours, 0x7386d received transfers totaling $367,000 from 32 addresses identified as Alameda Research wallets, with an additional $322,000 coming from other wallets. All funds were sent to a centralized crypto exchange in Seychelles and to the crypto bridge RenBridge, according to the DeFi analyst.
0x7386d sent a total of 519.5 Ether
, or around $629,000, to 0x64e9B, which also received funds from addresses labeled as Alameda Research. BowTiedIguana also identified five separate transactions of less than 51 ETH ($61,000) that were used to move funds to newly created wallets and then “onwards to a Seychelles-based exchange.”Additionally, the SBF-linked wallet 0x64e9B sent three tranches of 200,000 Tether (USDT) to the FixedFloat exchange.
“As the Ethereum blockchain is an immutable public ledger, this on-chain evidence is permanently available to law enforcement and the courts,” BowTiedIguana stated, calling attorneys from the United States Securities and Exchange Commission to look at the issue.
Confirmed to be related to SBF or not, the transactions do not necessarily mean that FTX founder has violated bail release conditions, according to some industry enthusiasts.
“I don't know that this necessarily qualifies as ‘spending’ money. They're his assets already,” one industry observer suggested.
Related: SBF met with Biden’s senior advisers 2 months before FTX’s collapse: Report
A number of online commenters also speculated that SBF himself was Chef Nomi, the anonymous co-founder of Sushiswap. Coinbase head of strategy Conor Grogan stressed that many of the recent SBF-linked transactions were heavily related to early Sushiswap activity. “These wallets — assuming they all belong to him — were heavily involved with LPing Sushi early on, well before Chef Nomi handed off the project to SBF,” Grogan stated.
SBF himself claimed in September 2020 that he didn’t have anything to do with building Sushiswap.
The alleged SBF-linked transactions occurred about a week after SBF was granted bail with a $250 million bond secured by SBF’s parents paid with the equity in their house. SBF previously claimed that he only had $100,000 in his bank account after the collapse of FTX.
The news comes soon after the government of Bahamas officially announced that local authorities seized $3.5 billion worth of crypto from FTX on Nov. 12. The authorities claimed that the action was taken in order to avoid a risk of “imminent dissipation” of funds after SBF warned about cyberattacks on FTX in mid-November.
‘Wall Street Wolf’ J. Belfort calls FTX ‘slaughter’ drug-related, says SBF is ‘done’
Ana Nicenko
CRYPTOCURRENCY
As the consequences of the collapse of FTX, what used to be one of the largest crypto exchanges in the world, are still felt across the cryptocurrency market, and after the arrest of its founder Sam Bankman-Fried, former stockbroker Jordan Belfort had a few things to say about the whole situation.
Commonly known as the “Wolf of Wall Street,” Jordan Belfort said that SBF was “done” and that the implosion of the FTX ecosystem was largely fuelled by the amphetamine use of Caroline Ellison, the former CEO of Alameda Research, who was arrested alongside SBF, as he told in the interview with Newsmax’s Eric Bolling published on December 23.
According to Belfort, the situation is playing out exactly how he thought it would, which is the cooperation of SBF and the other persons involved in the scandal.
“They have copped pleas, which means that they’re giving a roadmap to the U.S. attorney and the FBI right now. This guy has got no shot. He has no defense. He’s gonna plead guilty at some point and cop a plea. He’s not going to go to trial, and he’s going to get sentenced. My guess is somewhere north of 50 years in jail, maybe even more.”
‘Open-and-shut case’
Comparing the alleged scheme with that of Bernie Madoff, the former stockbroker said that this was “really an open-and-shut case” of stealing people’s money, for which there’s no defense.
“So people were depositing money into FTX, thinking they were putting money into a brokerage firm and the money was being segregated into each person’s account, and he had a backdoor, taking the money out into Alameda which was his trading arm.”
Belfort also said that the FTX leadership were “the worst traders on the planet,” losing billions of dollars in the bet that was “being propped up by customer funds.” As he added, losing a couple of billion dollars is “actually really easy because they were trading with leverage, and that’s the disaster.”
Ellison and amphetamines
Referring to Ellison, he also commented that “it’s very easy to lose massive sums of money” when drugs are involved, explaining that:
“The thing about amphetamines and cocaine is that you think you’re sharper when you’re on them, but you’re actually not nearly as sharp, but you really think you’re brilliant, so in her own mind, she thinks she’s got this collective brilliance around her by being high on amphetamines.”
On top of that, he believes that Ellison was lulled into the “false sense of security from when anyone could make money in crypto trading,” but that later on, “the way they make money starts to collapse and now she has to be a real trader, (…) and she got absolutely, positively slaughtered on leverage fuelled by methamphetamines.”
Missed red flags and bad trading
Earlier in November, Belfort expressed his view that the FTX collapse was likely premeditated, labeling SBF as a sociopath, and comparing FTX’s business model to a ‘frat house,’ while questioning why its backers had failed to notice the red flags, as Finbold reported.
It is also worth noting that Gregory Coleman, the retired FBI agent who was involved in the cases of the Bernie Madoff Ponzi scheme and Belfort’s prosecution, said that prosecuting SBF was simple and that investigators only needed to follow the money while treating the situation as bad trading.
Watch the entire interview below:
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