FTX latest: Bankruptcy lawyers accuse former CEO of undermining case

Sam Bankman-Fried is undermining efforts to reorganize his crumbling empire with “incessant and disruptive tweeting,” US lawyers for the bankrupt crypto platform FTX said in a court filing.

The tweeting appears to be aimed at moving assets away from the control of a US court in favor of one in the Bahamas, the lawyers said. FTX—under the control of a new CEO—asked a federal judge in Delaware to transfer a competing bankruptcy case filed in New York by Bahamian liquidators to Delaware.

Earlier, Sam Bankman-Fried said in a tweet that he made a mistake on the crypto exchange’s leverage levels—it was $13 billion, not about $5 billion. FTX will be in Congressional crosshairs next month as House and Senate panels probe the collapse. But Bankman-Fried was blunt about his views on regulators in an interview with via Twitter direct message with Vox’s Kelsey Piper, saying: “F—- regulators” and “they make everything worse.”

Meanwhile, Binance CEO Changpeng Zhao told CNBC his company “would be interested in looking at the assets, buying assets, especially some of the better ones” that may be sold in the form of bankruptcy.

More crypto lenders are feeling the pain as contagion spreads. BlockFi Inc. is preparing to file for bankruptcy, according to people with knowledge of the matter. Gemini Trust Co., the crypto platform run by the Winklevoss brothers, paused withdrawals on its lending program. Coindesk reported that bankrupt lender Voyager Digital may find a new rescuer in Binance.

Binance evidence on FTX collapse unacceptable, UK lawmakers say

Binance sent news articles—rather than internal records—to a UK Parliamentary committee probing the collapse of FTX.com and its planned sale of FTT token, a move that some UK lawmakers called disappointing and unacceptable.

Alison Thewliss, a member of the UK’s Treasury Committee, said in an interview on Bloomberg Radio that Binance sent news articles to the committee, while it had expected to receive internal records about the potential market consequences of Binance’s announced divestment of FTT. Thewliss said that Binance’s lack of transparency would influence the committee’s recommendations to government on regulating the crypto industry.

Fresh test of nerves for Asia regulators

Crypto’s latest existential crisis flared amid far-reaching planned changes in the digital-asset rulebooks of Asian centers including Hong Kong and Singapore. Officials in both jurisdictions and further afield face calls to ensure greater transparency, especially on customer assets.

Hong Kong two weeks ago pivoted to a more welcoming stance, detailing plans to become a crypto hub with legalized retail trading and dedicated exchange-traded funds. Singapore, in contrast, is clamping down on retail crypto trading, focusing instead on productive applications of blockchain technology.

Both appear to be sticking with their diverging regulatory paths.

Bankman-Fried tells his side of FTX collapse story in tweets

On Wednesday, Bankman-Fried added a further 18 tweets to a meandering thread he started at the beginning of the week.

The posts, published at sporadic intervals, have combined apologies for his failings with his perspective on what went wrong at the companies he founded and ran. They add to a previous series of cryptic posts. “We got overconfident and careless,” he said.

Congress to probe FTX collapse

FTX and its former chief executive officer, Democratic mega-donor Bankman-Fried, will be in congressional cross hairs next month as House and Senate panels probe the company’s collapse.

The House Financial Services and Senate Banking committees plan December hearings that will look at FTX’s sudden demise and its ripple affects in the broader digital asset industry. Democrats and Republicans alike have expressed anger about the current state of the crypto marketplace.

SBF Mistaken About FTX’s Leverage Levels

Bankman-Fried says he was mistaken about the cryptocurrency exchange’s leverage levels, thinking it was about $5 billion when it was $13 billion.

In his latest series of tweets explaining how FTX imploded, Bankman-Fried says the company got “overconfident and careless.”

With assistance from Sunil Jagtiani and Dara Doyle.

2022 Bloomberg L.P.

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