US financial watchdog the SEC (Securities and Exchange Commission) has filed charges against crypto lending firms Gemini and Genesis.

On 12 January, SEC sued the firms over their crypto lending product, Earn, for allegedly breaching investor protection laws.

## The Gemini SEC lawsuit

The [Gemini](https://www.gemini.com/) SEC civil lawsuit has been filed in the Federal Court of Manhattan. As per the SEC, both companies did not register their product before offering them to individual investors. The regulator claims that the Earn program has been used to sell unregistered securities. 

The crypto lending program allowed the exchange’s customers to lend their assets to [Genesis](https://genesistrading.com/) to earn up to 8% interest. The crypto exchange also profited by charging a fee of around 4.29% through this program.

Both these partner firms are under scrutiny after Genesis paused withdrawals unexpectedly in November. Interestingly, it happened right after the FTX exchange crashed. As per the SEC, at that time, the cryptocurrency lending program had more than [$900 million worth of crypto assets](/news/article/genesis-brokers-owes-gemini) of their customers. With this lawsuit, the commission is looking to recover illegal profits and fines for the offence. 

## Tyler Winklevoss's statement on Gemini SEC charges

Soon after the Gemini SEC lawsuit was filed, Gemini’s co-founder, [Tyler Winklevoss](/news/article/tyler-winklevoss-twitter), issued a statement via [Twitter](https://twitter.com/tyler/status/1613674691507679233). He said, "We look forward to defending ourselves against this manufactured parking ticket...".

He also showed his resolve to continue work to recover customers' assets.

On the other hand, Genesis Global Capital is yet to comment on the issue. 

Since the pause of withdrawals, the lending partner has been seeking ways to recover. However, the Wall Street Journal recently reported that the firm might have to file for [Chapter 11 bankruptcy](https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics). The firm has already laid off more than 30% of its workforce in the last week.

Gemini and Genesis have ties with the [fallen exchange](/news/article/gemini-crypto-exchange-falls-prey), FTX, and have been in losses since its decline.



gemini and Genesis logos over red image of US SEC building

Genesis and Gemini: SEC Takes Action

The [latest FTX news](/news/tag/ftx) could be positive for customers, investors, and lenders – $5B of assets, such as liquid cryptocurrency, liquid investment securities, and cash, have been recovered, according to Andy Dietderich, an FTX attorney.

Dietderich revealed this information to Judge John Dorsey in a Delaware bankruptcy court. The recovered assets do not include those confiscated by the Securities Commission of the Bahamas – where the crypto exchange is headquartered and former FTX boss Sam Bankman-Fried (SBF) was located at the time of his arrest.

## FTX news: who has been named in court filings?

Celebrities such as American football legend Tom Brady, Brazilian fashion model Giselle Bündchen (Brady's former wife), and CEO of the Kraft Group, Robert Kraft, were among those named in the hearings.

Most of FTX's investors and customers facing unfortunate losses have not been mentioned in court filings. At the time of writing, an estimated $8B of customer funds is missing (factoring in the latest recovered funds).

## FTX news: a timeline of events

Here is a timeline of events involving the cryptocurrency exchange and SBF:

•	On 11 November, 2022, FTX, valued at $32B just a year ago, [filed for bankruptcy](/news/article/ftx-bankrupt-who-to-blame).

•	On 12 December, 2022, [SBF was arrested](/news/article/former-ftx-ceo-sbf-arrested) in the Bahamas and extradited to the US.

•	On 13 December, 2022, US federal prosecutors announced eight criminal charges against SBF, including campaign finance violations, money laundering, and wire fraud. This includes allegations of using customer funds to settle debts at his crypto trading firm, Alameda Research, and indulging in other investments.

•	Co-founder of FTX Gary Wang and former head of Alameda Research Caroline Ellison (SBF's rumoured ex-girlfriend) have also been charged [over their purported role](/news/article/sam-bankman-fried-crypto-execs-admit-fraud) in FTX’s calamitous downfall.

•	On 22 December, 2022, SBF was released on a $250M bail bond – one of the largest in US history.

•	SBF, who was [once worth $26B](https://news.yahoo.com/sbf-once-worth-26-billion-092740219.html), pleaded ‘not guilty’ to each criminal charge against him.

In an interview with BBC news before his arrest, Sam Bankman-Fried claimed he had "unknowingly" committed fraud. He did not want the events that unfolded to happen and admitted to being "not nearly as competent" as he thought.


ftx logo on red background with billions of dollars falling from the sky

FTX News: $5B of Assets Recovered

Silvergate bank declared on Thursday that it would fire at least 200 employees besides halting plans to develop a blockchain payments network. The drastic action is a consequence of its association with the recent [FTX fiasco](/news/article/ftx-bankrupt-who-to-blame). 

A Wall Street Journal (WSJ) [report](https://www.wsj.com/articles/silvergate-raced-to-cover-8-1-billion-in-withdrawals-during-crypto-meltdown-11672895207) stated that the crypto-focused Silvergate Capital Corp experienced a surge in withdrawals following the collapse of FTX. Consequently, the bank was forced to liquidate $5.2 billion in digital assets it held on its balance sheet leading to losses amounting to $718, which exceeded its cumulative profit since 2013.

## Silvergate Bank sells assets at steep loss

A corresponding 68% decline in deposits during Q4 2022 saw Silvergate's $11.9 billion deposits slashed to a paltry $3.8 billion on 31 December. The bank has been forced to downsize its workforce and sell off its assets at a steep loss to try and rein in costs amidst the ongoing industry downturn. 

The downfall of Sam Bankman-Fried’s FTX, once the world’s second-largest cryptocurrency trading platform, and his subsequent arrest in the Bahamas and [extradition to the USU](/news/article/sbf-agrees-to-return-to-us-for-fraud-charges) has rattled parts of the banking industry.

The events rippling across the budding sector have eroded some people's confidence in crypto platforms. Silvergate bank is among the institutions bearing the brunt. Crypto brokerage Genesis also seems to have 'caught a similar cold’ as it [announced](https://www.bloomberg.com/news/articles/2023-01-05/crypto-brokerage-genesis-eliminates-30-of-staff-in-latest-cuts?srnd=premium) on Thursday of plans to let go more than 60 employees representing at least 30% of its workforce.

## Bullish on crypto

The setbacks suffered by Silvergate haven't gone unnoticed by US regulators, with three Senators asking for more information in a letter addressed to the bank last December asking about the extent of customer losses as FTX went under.

The [letter](https://www.warren.senate.gov/imo/media/doc/Letter to Regulators re Banking System Exposure to Crypto.pdf) hints that there may have been a lapse in Silvergate’s capacity to monitor and report suspicious activity. The bank played a significant role in assisting FTX in transferring customer funds to Alameda. 

Despite the preceding, Silvergate has remained bullish on digital assets and claims to have sufficient funding to manage a "sustained period of transformation".

The bank [stated](https://www.businesswire.com/news/home/20230104005963/en/Silvergate-Announces-Select-Preliminary-Fourth-Quarter-2022-Financial-Metrics-and-Provides-Business-Update): “While Silvergate is taking decisive action to navigate the current environment, its mission has not changed. Silvergate believes in the digital asset industry.”

Silvergate bank said it remained committed to crypto and its recent moves were necessary to survive a tumultuous phase in the crypto economy.


red image of silvergate bank building with dollars falling

Silvergate Bank Loses $718m in Asset Sell-Off

United States financial regulators have issued their first-ever combined warning to banks regarding cryptocurrency risks and the potential dangers of crypto markets and digital assets.

The regulators warned the financial institutions to guard against fraud, legal uncertainty, and deceptive disclosures by digital asset companies. [A notice was also sent to banks over the "contagion risk" posed by the sector](https://www.bbc.com/news/business-64159452).

It comes less than two months after the trading platform FTX went offline, which sent shockwaves across the cryptocurrency market. The joint statement from the Federal Reserve and Federal Deposit Insurance Corporation, alongside the Office of the Comptroller of the Currency, stated that they were closely watching the activity of banking organizations regarding cryptocurrencies.

According to the statement, "The events of the previous year have been characterized by high volatility and the exposing of weaknesses in the crypto-asset industry."

The authorities also stated that it was "very likely inconsistent with safe and sound banking procedures" to issue or hold tokens stored on public, decentralized networks.

## US regulators issue warning to banks on cryptocurrency risks

In addition, banks were encouraged to take action to prevent issues in the digital asset market from spreading to the broader financial system.

"Risks associated with the crypto-asset sector that cannot be mitigated or managed mustn't move to the financial system," it continued.

"The banking system is not a suitable environment for these risks."

The statement released on Tuesday follows several months of reluctance by watchdogs of the US financial industry to publish universal recommendations on cryptocurrencies, even though institutions have requested clearer advice from authorities.

[The failure of the FTX exchange](/news/article/is-crypto-dead) in November sent shockwaves through the sector. It was the second-largest cryptocurrency exchange in the world, serving as the gateway for millions of consumers to enter the market for digital assets.


sign pointing to safe or risky over red image of american flag and cryptocurrency coins

Cryptocurrency Risks Warning Issued to US Banks

[Crypto.com](https://crypto.com/) was one of the sponsors of the 2022 [FIFA World Cup](/news/article/world-cup-vr-viewing) in Qatar. The initiative was taken to promote its Cronos crypto (CRO). It was expected that the publicity campaign at the biggest sports tournament would boost the coin's value.

However, the tournament offererd little exposure to CRO. It failed to trigger any significant price action for the coin. While many cryptocurrencies were consolidating their positions before a potential rally during Christmas, CRO is still bearish. Currently, the trading price of Cronos is only $0.064.

## CRO’s market value dropped by 50% in November

Instead of getting a boost, the Cronos crypto price fell by more than 50% in November. The FIFA World Cup did not benefit Crypto.com in providing global exposure. It is partly because of the politicisation of this sports event. The ban on wearing LGBTQ+ armbands and the prohibition of alcohol at tournament venues created controversy. 

Currently, the media is mainly generating negative headlines for FIFA and the Qatari Government. It has taken the limelight from the sponsors and has somewhat affected their reputation. 

## The effect of FTX contagion

The [collapse of the FTX exchange](/news/article/ftx-collapse-blockfi-suspend-withdrawals) also played its part in the price decline. It has become an unstoppable contagion that has affected numerous DeFi projects. The entire cryptocurrency market experienced the impact of its collapse in November.

CRO suffered from the FTX crash as it is an exchange token like FTT. The FTT token was the native token of the FTX exchange. Likewise, CRO powers the Crypto.com exchange. Cronos felt burnt as investors lost trust in tokens dependent on exchanges' performance.

Unfortunately, CRO remains one of the coins that failed to recover. It was trading at around $0.12 at the start of the month. But after the first week, it saw a sharp decline that persists. At the end of the month, it had shed more than 50% of its market value. It is now trading at around $0.064, according to [CoinMarketCap](https://coinmarketcap.com/currencies/cronos/).

## Cronos crypto price prediction

Currently, Cronos’ crypto price is less than its 200-day and 50-day simple moving averages (SMA). It is showing a continuous bearish trend while indicating high selling pressure. Moreover, the trends are neutral to bearish for the coming weeks. 

Now, let’s see the long-term price predictions for Crypto.com coin. The forecast from [PricePrediction.net](https://priceprediction.net/en/price-prediction/cronos) shows that next year, CRO’s price will average $0.098. Besides, it may top the price charts with $0.11. Moreover, in 2025 it is likely to maintain the average market value of $0.22. According to these insights, it is expected to reach the $1 mark in 2030 and will average $1.44 in the year. 

In comparison, [Coin Codex](https://coincodex.com/crypto/cronos/price-prediction/) predictions are slightly bullish. It predicts that in 2023, CRO’s value may reach $ 0.193269 to $ 0.332090. Moreover, it suggests that the token may hit $1 in 2025. Potentially, its price may reach $ 1.634169 in the new year. 

## Is Cronos crypto a good investment?

The [Crypto.com coin](/news/article/crypto-com-card) blockchain introduces an open-source protocol. It allows the mass adoption of digital assets and promotes the benefits of ownership. The token also has the backing of one of the most influential exchanges in the market. 

Unfortunately, at the moment, investor confidence is relatively low in such exchange-backed tokens. It is showing bearish trends and has already shed 50% of its value in a month. It seems highly unlikely that the coin will recover in the near future. That's why it does not seem like a good time to buy Cronos.


green glowing cronos crypto logo on black background

Cronos Crypto Publicity Falls Flat at World Cup

Millions are searching for the answer to the question, 'is crypto dead?'. This key phrase brings forth millions of results in articles covered by reputable financial news outlets across the globe because of the liquidity issues that have mired the crypto finance industry in November 2022.

The second-largest cryptocurrency exchange, [FTX](/news/article/ftx-bankrupt-who-to-blame), which recorded at least $1 billion in daily volume and trailed only Binance in exchange rankings, filed for Chapter 11 bankruptcy protection in the US on 11 November. Filing for Chapter 11 bankruptcy means that FTX has many creditors who have poured liquidity into the company, but it has taken this step so that it can propose a reorganization plan to keep the business alive and pay creditors over a given period. The Sam Bankman-Fried-led company has seen the freezing of its assets by the Bahamas government, while provisional liquidators chosen by the country's securities have agreed to continue the [bankruptcy proceedings](https://www.cnbc.com/2022/11/22/ftx-lawyer-says-in-first-bankruptcy-hearing-this-is-different-animal.html) in Delaware, US.

Following the collapse of FTX and its bankruptcy filing on 11 November, the total market capitalization of the entire crypto industry plunged by more than $100 billion in 10 days. There was a 13% decrease from 11 November's $840 billion to approximately $728 billion on 21 November. Due to interest in tokens such as Trust Wallet Token (TWT) - which has risen by more than 100% in the last two months due to increased demand for crypto wallets as a result of its self-custody purposes - the markets have made some gains.

It recouped more than $50 billion in the three days towards the close of 24 November, which saw capitalization climb up to $791 billion, data from [Trading View](https://www.tradingview.com/x/4jMz1P1X/) showed. 

![Picture2.png](https://s3.eu-west-2.amazonaws.com/prod-monitalks-media/Picture2_36e7999c8f.png)
 
Despite the billions of dollars of liquidity that poured into the market from 21 November to 24 November, the industry had not accounted for the remaining $50 billion that had left the market.

These metrics have become a major cause for concern for many stakeholders in the industry, prompting the question, 'is crypto dead?'. But the roots of FTX's demise were sown 12 months ago.

## Terra Luna's collapse

The seeds for the contemplation of the question 'is crypto dead?' were sown in 2021. This was a period where sophisticated (traders and investors who conduct fundamental and technical analysis before making decisions) and unsophisticated (those who do NOT) saw multiple percentage gains within a short time. 

Cryptocurrencies such as SAFEMOON and meme-inspired digital currencies such as Shiba Inu (SHIB) and Dogecoin (DOGE) brought more than 10,000% gains to their holders. Low-cap digital assets by market capitalization (coins with less than $2 billion in value) were not the only assets to see gains. Medium (digital assets with more than $2 billion but less than $10 billion in market cap) and large (coins and tokens with more than $10 billion in market value) such as Bitcoin (BTC), Ethereum (ETH),

Cardano (ADA), Ripple (XRP), Solana (SOL), Polkadot (DOT), Litecoin (LTC), and Dash (DASH) also brought triple-digital percentage gains to investors.

After the industry reached a peak of $3 trillion in November 2021, the fear of missing out (FOMO) set in. With reports of millions of dollars being made within a short time circulating on pro-crypto news forums and websites across the globe, millions more joined to milk the cow. Unfortunately, whatever goes up also comes down. During the pandemic's peak in March and April, the financial markets were brought to their knees, with BTC trading below $4,000. What followed was a bullish market that saw decentralized finance (DeFi) tokens such as Compound (COMP), Aave (AAVE),

Uniswap (UNI), and Yearn Finance (YFI) lead a turnaround towards the end of 2020. It was that turnaround that led to the record highs achieved by the crypto market in 2021.

At the beginning of 2022, there was the invasion of Ukraine by Russia, and this led to a rise in commodity prices. Industry-wide reports of inflation began circulating online in February and March. This was a time when the roots of bearishness which commenced after the highs in November started showing their branches.

What followed was the increase of interest rates by the Federal Reserve in the US. Millions of people jumped onto the crypto bandwagon, and DeFi especially, because of the above-average returns it promised. Since the US is the financial capital of the world, a rise in interest rates in the country led to a significant spike in interest rates in many developing countries whose citizens rely on crypto for passive income. Many of these residents and some crypto holders in developed economies began dumping the highly volatile asset class for safe and risk-free government bills and bonds that can add three, six, nine, and 12 months of passive income to their regular salaries.

In the middle of May, the shaky market saw the collapse of one of its new major assets in the form of [TerraUSD (UST)](/news/article/terra-luna-collapse), an algorithmic stablecoin that supported the Terra project. As one of the major projects in the industry with more than $30 billion in total value locked (TVL), the collapse of the token wiped more than $40 billion off the market within two weeks. 

As of 24 November, around $2.2 trillion had been wiped off the market since November 2021's highs. Holders of BTC, ETH, ADA, the old Terra (LUNA), and now FTX Token (FTT) have taken the biggest hit. The industry-wide bloodbath was captured by [TradingView](https://www.tradingview.com/x/bcnxPIIH/).

![Picture3.png](https://s3.eu-west-2.amazonaws.com/prod-monitalks-media/Picture3_fe5af36b85.png)

## So, is Crypto Dead in 2022?

To outsiders of this broad industry, crypto is on its knees in 2022. Unfortunately for the same outsiders, crypto is more than some virtual assets on screen being traded by millions of people daily. Its underlying infrastructure, blockchain technology, has been tapped by many financial institutions to improve their systems.

A cryptocurrency like Ripple's XRP is used in the company's on-demand liquidity (ODL) feature during cross-border payments. This has helped millions of remittance companies that have partnered with Ripple meet their customers' demands.

One of the emerging sectors of the crypto industry is non-fungible tokens (NFTs). As of 24 November, NFT global market sales had surpassed $40 billion with projects such as [Axie Infinity](/news/article/axie-infinity-coin), Bored Ape Yacht Club (BAYC), CryptoPunks, and NBA Top Shots among highest selling collections. Blockchains such as Ethereum, Avalanche, Binance, and Solana continue to play an integral part in NFT creation and sales. 

Aside from that, sports clubs have also tapped into the industry to improve fan engagement. Global Fan Tokens have surpassed more than $100 billion, with football clubs such as Paris Saint Germain, Lazio, AC Milan, AS Roma, and FC Barcelona among the top teams whose tokens lead the ranks of the most purchased.

Is crypto dead? In a nutshell, no. The market is going through a phase where shady projects are being thrown out, while others are being restructured to protect investors from losing billions of dollars of their hard-earned money.



Is Crypto Dead After FTX Collapse?

Key takeaways on why Aptos crypto is a good investment case for 2023 and beyond:

•	Based on Web3 technology, which is the future of the blockchain.

•	Aptos blockchain is built to provide a low latency, high throughput system which caters to different use cases and is resource-constraint-tolerant.

•	[Several projects are signing up to the Aptos platform](https://cryptotvplus.com/2022/10/5-nft-projects-on-the-aptos-blockchain/), deepening Web3’s adoption.

## What is the Aptos crypto all about?

The Aptos crypto token APT was listed on some exchanges in October 2022. A month later, the second largest crypto exchange, [FTX](/news/article/ftx-bankrupt-who-to-blame), collapsed. The scandal continues to unfold, and the public is learning more about how the lack of proper management brought that exchange to its knees. The damage to the crypto market is undeniable. As the FTX saga has clearly shown, there is much folly in simply speculating on tokens with no structure or foundation. 

This event may have a silver lining and will allow crypto enthusiasts to move away from the speculative activity on crypto tokens and get back to the essence of the blockchain. Aptos's Web3 offering is one project that can take the crypto industry in the proper direction and create value for stakeholders in this ecosystem.

The Aptos blockchain is a project that aims to promote rapid adoption and deployment of Web3 technologies using cloud infrastructure. Based on the Move language, Aptos presents a new way of designing smart contracts and enhancing system security and decentralization of blockchains.

Decentralization is at the very core of the Aptos network. Web2 versions of internet-based services feature a lot of centralization, where companies control the data and decide who can be on their platforms. This opens the door to abuse. Facebook, Amazon, and other companies have, at one time or another, faced accusations of competition-unfriendly practices and misuse of user data. These companies come under some form of regulation. Regulators have stepped in once in a while to reign in the excesses of these companies. But in the blockchain world, an ecosystem that promotes decentralization, the existence of centralized entities that operate without regulation makes for a dangerous combination. The collapse of FTX typifies such dangers.

## FTX's collapse will hasten Aptos crypto's Web3 drive

Despite the decentralization feature of distributed ledger technology, many crypto exchanges continue to operate as centralized organizations, representing a significant failure point. If there is a hack, a run on the exchange, or customer funds vanish (as in the FTX example), users lose everything. This goes against the very notion of distributed ledger technology.

The concept of Web3 is a direct response to the problems associated with centralized internet-based networks. As a Web3 blockchain project, Aptos aims to be the backbone on which several other Web3 projects will spring up. The Aptos crypto airdrop has been concluded, and the Aptos blockchain platform already has several hundred projects waiting to launch.

The only way to stop the crypto market from being the cesspool of centralized, corporate degeneracy is by shifting focus away from undue market speculation. FTX fell into this trap by [moving billions to Alameda](https://www.theguardian.com/technology/2022/nov/11/cryptocurrency-exchange-ftx-files-for-bankruptcy-protection-in-us) and losing these in risky speculative bets.

Some investment banks thronging into the crypto market in late 2020 and 2021 are starting to rethink their focus. CoinDesk cited an 18 November, 2022, investment note by Bank of America (BofA) analysts Andrew Moss and Alkesh Shah, in which investors were reminded that the development of applications that leverage distributed ledger technology continues to advance, irrespective of FTX's collapse. 

To buttress the point made by the BofA analysts, on-chain data show that DeFi protocols continue to enjoy steady revenue growth. [DeFi's revenue](https://www.fxstreet.com/cryptocurrencies/news/polygon-ranks-third-in-top-defi-projects-by-revenue-what-this-means-for-matic-price-202211172222) during a week in early November is demonstrated in this snapshot, taken from Token Terminal. It shows that Ethereum netted more than $555m in that week. OpenSea and Illuvium earned $73.5m and $73.3m, respectively. Next are dYdX and PancakeSwap, with revenues of $39.6m and $34.9m.

![aptos.png](https://s3.eu-west-2.amazonaws.com/prod-monitalks-media/aptos_5595e79820.png)
 
## DeFi Network Earnings, Early November 2022

The problems seen in the crypto market are more of a failure of corporate structure and not an issue with the technology on its own. Decentralized exchanges like PancakeSwap and decentralized finance networks like Ethereum and dYdX still make money even when centralized exchanges and their tokens are bleeding. It is an obvious pointer that we should be looking for ways to expand the technology and not be fixated on speculating on the native tokens.

The Aptos crypto token has lost much of its value within a month of listing on major exchanges. From a Binance-listed high of $100 on 19 October, 2022, the token is struggling to stay above the $4 mark. This may be a disguised blessing, as it makes the APT token unattractive to speculators, given the spreading contagion of the FTX collapse. This will redirect focus back to the essence of the distributed ledger technology. 

Distributed ledger technology was not created as an exotic financial asset for market speculation. Bitcoin certainly wasn't, as Satoshi Nakamoto envisaged its use as a means of peer-to-peer payments. True decentralization lies at the core of the Web3 drive, and Aptos is positioned to lead the way in this direction.


Is Aptos Crypto a Good 2023 Investment?

Two top officials of Sam Bankman-Fried's cryptocurrency empire have admitted to committing fraud. [The Southern District of New York US Attorney announced on Wednesday night](https://www.nytimes.com/2022/12/21/technology/ftx-fraud-guilty-pleas.html) that two former employees of Sam Bankman-Fried crypto businesses had pled guilty to federal criminal fraud charges and are collaborating in prosecuting the disgraced crypto entrepreneur.

Gary Wang, 29, founded the exchange FTX, and Caroline Ellison, 28, ran the cryptocurrency hedge fund Alameda Research. They played pivotal roles in the development of the global Sam Bankman-Fried crypto empire, which he launched with the creation of Alameda and FTX.

Following last week's fraud complaints against Mr. Bankman-Fried, two federal regulatory agencies, the Commodity Futures Trading Commission and the SEC (Securities and Exchange Commission), filed civil fraud charges against Mr. Wang and Ms. Ellison and Mr. Wang on Wednesday.

## Facing further legal trouble as former employees plead guilty to fraud

[Mr. Bankman-Fried is in detention](/news/article/former-ftx-ceo-sbf-arrested) in the Bahamas after agreeing to be extradited to face trial in the US. The 30-year-old is in an especially precarious legal position due to the criminal and civil allegations leveled against the former top executives.

The US Government has accused him of perpetrating a massive fraud lasting for years that led to FTX filing for bankruptcy last month.

Two of his closest advisors are now helping federal prosecutors with their investigation. The friendship between Mr. Bankman-Fried and Mr. Wang and Ms. Ellison extended beyond that of close colleagues. He lived with them in a lavish condominium on Paradise Island, the Bahamas, where FTX was headquartered.

Prosecutors and regulators have filed charges against Mr. Bankman-Fried, alleging that he misappropriated billions of dollars from his customers to fund his activities. These include purchasing real estate in the Bahamas, trading cryptocurrencies at Alameda, funding political campaigns, and investing in other cryptocurrency companies. They say he bilked crypto trading company clients, financiers, and lenders.


Sam Bankman-Fried's Crypto Execs Admit Fraud

BlockFi, a cryptocurrency [lender](/news/article/crypto-lender-voyager-sells-assets) that declared bankruptcy on 28 November, has filed a plea with a US court to allow withdrawal for clients who have crypto locked in its wallet accounts.

The [bankrupt](https://www.forbes.com/sites/ninabambysheva/2022/12/20/blockfi-motion-to-allow-withdrawals-for-some-customers-poised-for-success/) firm filed the request with the US Bankruptcy Court for the District of New Jersey on 19 December. If authorised, members can withdraw the cryptocurrency stored on the site. According to the motion, cryptos are kept in wallets belonging to consumers, and the firm has had no legal or equitable interest since it ceased operations on 10 November.

In addition to permitting withdrawals from clients' wallets, the crypto lender is working to enhance the user interface to display transactions accurately. The corporation also intends to perform routine account reconciliation.

## BlockFi withdrawal request applies to particular customers

To clear up any confusion, the firm aims to erase any "attempted" withdrawals from the user interface following the platform pause. The business also noted in the statement that to avoid all doubt, the debtors do not seek to reverse any customer deposits from outside the platform to wallet accounts received post the Platform Pause Time Stamp. 

According to [Twitter](https://twitter.com/TiffanyFong_/status/1604994112943374337?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1604994112943374337%7Ctwgr%5Ee9d42b4167970655ff8ca4c0ccc32bd1b7282d29%7Ctwcon%5Es1_&ref_url=https://cointelegraph.com/news/blockfi-files-motion-to-return-frozen-crypto-to-wallet-users), the crypto company issued an email informing users of the recent court filing. It further stated that it believes clients clearly control their wallet accounts' digital assets. 

“We will seek similar action from the Supreme Court of Bermuda concerning BlockFi Wallet Accounts maintained at BlockFi International Ltd”, the crypto lender added. This motion does not affect withdrawals or transfers from Interest Accounts currently in suspension.

## BlockFi withdrawal halt stems from crypto crash

BlockFi was one of the first companies to fall victim to the early November crypto crash headed by crypto exchange FTX. The crypto lender arranged a $680 million transaction with [FTX](/news/article/ryan-salame-exposed-ftx-truth). As FTX's financial situation deteriorated, the impact on the US grew. 

According to the company's bankruptcy filing, the corporation claimed more than 100,000 creditors and $1 billion to $10 billion in assets and liabilities.


blue image of blockfi logo on image of someone withdrawing crypto

BlockFi Withdrawal Could Resume

Sam Bankman-Fried, the detained founder of the bankrupt crypto exchange FTX, reportedly signed documents on 20 December that will see SBF handed over to Federal Bureau of Investigation (FBI) agents and taken to the United States, where he will face criminal charges.

Bankman-Fried was [reported](https://cointelegraph.com/news/sbf-signs-extradition-papers-set-to-return-to-face-charges-in-the-us) to have agreed to be [extradited](/news/article/former-ftx-ceo-sbf-arrested) to the US just hours after his lawyer told a judge in the Bahamas that he was not ready to consent.

## SBF is to be taken to the US to face criminal charges

According to Bahamas Acting Commissioner of Corrections Doan Cleare, Bankman-Fried signed his surrender documents on Tuesday. Today, SBF will sign separate papers finalising his waiver of rights to fight extradition at the Magistrate's Court in Nassau.
[Bankman-Fried](/news/article/sam-bankman-fried-lost-billions) is expected to be accompanied by FBI agents on a private flight back to the US, where he faces eight counts in an accusation by the US Attorney for the Southern District of New York. 

According to the [New York Times](https://www.nytimes.com/2022/12/20/technology/sam-bankman-fried-bail.html), Bankman-Fried's legal team is negotiating with federal prosecutors to allow him to be released on bail if he is extradited to the US.

According to sources, the agreement, which requires the approval of the federal judge overseeing the SBF case, could include highly restrictive conditions such as home custody and electronic monitoring.

## Allegations on SBF 

The Department of Justice has accused SBF of campaign finance violations, commodities and securities fraud, conspiracy to commit wire and money laundering, and wire fraud.

If found guilty of all charges, he could face up to 115 years in prison.

[The Commodity Futures Trading Commission and SEC (Securities and Exchange Commission) have filed additional charges](/news/article/ftx-boss-denied-bail-in-bahamas) against the founder of FTX for allegedly breaking commodity laws and defrauding investors.

After three years of rapid growth, FTX and numerous related companies filed for bankruptcy last month. The exchange was worth US$32 billion at its peak.

Authorities in the Bahamas and the US continue to investigate the involvement of SBF in FTX's collapse last month. The exchange was headquartered in the Bahamas.



SBF Agrees to Return to US to Face Fraud Charges

According to recent reports, authorities were alerted of the FTX's fraud before it made headlines. [Co-CEO Ryan Salame alerted Bahamian authorities](https://cointelegraph.com/news/ftx-bahamas-co-ceo-ryan-salame-blew-the-whistle-on-ftx-and-sam-bankman-fried) a few days before FTX filed for [bankruptcy](/news/article/ftx-bankrupt-who-to-blame) in November.

He alleged that founder Sam Bankman-Fried might have defrauded investors by [transferring money](https://cointelegraph.com/news/alameda-had-unfair-trading-advantage-special-access-to-ftx-funds-cftc-filing) to his sister company, Alameda Research.

## Ryan Salame takes on FTX and Sam Bankman-Fried

Contrary to the vast majority of market rumours, one of the company's top executives, not Changpeng Zhao (CZ) of Binance, was the one who brought down SBF and FTX. The declaration made on Wednesday is the first time an insider's turn against Bankman-Fried has been acknowledged publicly.

According to Bahamian court documents filed on 14 December, Ryan Salame, the former co-CEO of FTX Digital Markets (FDM), informed the SCB (Securities Commission of the Bahamas) on 9 November that the company was sending client funds to its sister trading company Alameda Research.

Salame claimed that the transfer was neither authorised nor approved by clients and that the money was intended to compensate for Alameda's financial losses. Furthermore, he disclosed to the SCB that only three people had the authority to transfer client assets to Alameda: the engineer Nishad Singh, the former CEO Sam Bankman-Fried, and Zixiao “Gary” Wang, the other co-founder of the company.

Salame claimed that he informed Bankman-Fried and Alameda executives that it was against "normal corporate governance" for client funds to have been mixed with Alameda's.

Following that, Christina Rolle, executive director of the SCB, requested an [investigation](/news/article/ftx-exchange-under-investigation) from the commissioner of the Royal Bahamas Police Force because the information “may have held misappropriation, theft, fraud, or some other crime".

The following day, 10 November, the [SCB froze FDM's assets](https://cointelegraph.com/news/bahamas-securities-regulator-freezes-ftx-assets) and suspended its registration in the country. A provisional liquidator was appointed by the Bahamian Supreme Court to try to save the company's assets.
According to the filings, Salame is believed to be in Washington, DC, and has not spoken publicly since the exchange's downfall.

His most recent public tweet was on 7 November, when he responded "lol" to Binance co-founder Yi He after He explained why the exchange [sold its FTX Token FTT holdings](/news/article/ftx-vs-binance-liquidate-funds).

## The collapse of FTX has had an absurd impact on the industry

Mixing SBF's companies' funds was a significant issue in the FTX scandal. In recent weeks, another former executive from FTX's affiliated companies is thought to have been assisting authorities.

On 4 December, images purportedly showing Alameda CEO Caroline Ellison in a coffee shop near the US Attorney's Office fueled rumours. Following the company crash, the cryptocurrency community believes she may have made a deal with authorities. 

Bankman-Fried is, to date, the only person charged in connection with FTX and Alameda so far. He is [accused](/news/article/ftx-boss-denied-bail-in-bahamas) of money laundering, political campaign finance violations, and wire and securities fraud.

Bankman-Fried, Wang, Singh, and Ellison are said to have run a "wirefraud" group chat on Signal, the encrypted messaging app, to send sensitive information about FTX and Alameda's operations. Bankman-Fried denied any knowledge of or participation in the group.


red image of ftx logo on mobile phone. Ryan Salame sitting in foreground. 

Co-CEO Ryan Salame Exposes FTX Truth

A [judge in the Bahamas has refused bail for Sam Bankman-Fried](https://www.bbc.com/news/technology-63967010.amp), the founder and former boss of the bankrupt crypto exchange FTX. According to the most recent sources, he will be detained by Bahamian authorities following his [arrest](/news/article/former-ftx-ceo-sbf-arrested) on 12 December, 2022.

Joyann Ferguson-Pratt, the judge in the case, has scheduled an extradition hearing for 8 February, 2023. The hearing was arranged in response to the decision to deny the former FTX boss bail.

## Ex-FTX boss in court

During the hearing, the attorney for the former FTX boss asked the judge whether SBF might be released on a $250,000 bond. The lawyer argued that his release is required since he requires daily medication.

Prosecutors in the Bahamas resisted the proposal, claiming it violated a treaty with the United States. The attorneys also stated that defendants should be imprisoned while extradition procedures were underway under the treaty provisions.

Bankman-Fried notified the judge that he would not forgo his right to contest the extradition. He then hinted that he could desire to stay in the Bahamas on purpose.

Bankman-Friend, wearing a blue suit without a tie, dropped his head and hugged his parents when the judge ruled that his danger of flight was "very severe". The judge ordered him to be detained in the Bahamas until 8 February.

## Allegations on FTX boss

After the Royal Bahamas Police was informed of a secret indictment by US prosecutors, they arrested SBF on Monday. The arrest was sparked by an unsealed indictment which included eight charges against SBF. These included conspiracy and wire fraud, for allegedly abusing billions of dollars in client payments before his cryptocurrency empire's stunning collapse last month.

Furthermore, the [SEC](/news/article/sec-crypto-enforcement-warning), CFTC, and the US Department of Justice filed complaints against Bankman-Fried on Tuesday for suspected securities and commodities fraud. Bahamas government officials are conducting civil and criminal investigations against him and FTX.

The day's events concluded a remarkable fall from grace for SBF, who created a fortune worth more than $20 billion as he rode a cryptocurrency boom to grow FTX into one of the world's largest exchanges.


red image of bankman fried in front of image of man in handcuffs. 

Former FTX Boss Denied Bail in the Bahamas

The founder and disgraced CEO of the failed crypto exchange FTX, Sam Bankman-Fried, was arrested on Monday after the US Government filed a criminal indictment.

These charges follow weeks of speculation that the FTX CEO misused customer funds.

## FTX CEO arrested

Sam Bankman-Fried, popularly known as SBF, was arrested by the Royal Bahamas Police Force. The police said that the arrest was initiated following receipt of formal notification from the US Government that it filed criminal charges and is likely to request that SBF be extradited.

In a statement, the Bahamas Police confirmed that Bankman-Fried was taken into custody without a hitch at his Albany apartment complex at 6pm.

SBF's arrest resulted from financial offences alleged in the US which would also be offenses in the Bahamas, the statement said.

A sealed indictment filed by the Southern District of New York was the basis for the arrest. US Attorney Damian Williams confirmed this in a [tweet](https://twitter.com/SDNYnews/status/1602451395910803457). 

Last month, the exchange filed for bankruptcy in the US after it imploded [almost overnight](/news/article/sam-bankman-fried-lost-billions), leaving customers unable to access their funds. According to court filings, FTX owed its largest creditors around $3.1 billion.

The dramatic fall from grace has been the talk of the market. The exchange's CEO was expected to testify about the [company's collapse](https://www.nytimes.com/2022/12/09/technology/ftx-text-messages.html) in Congress on Tuesday.

## Bankman-Fried future looks clouded

According to the [New York Times](https://www.nytimes.com/2022/12/12/business/ftx-sam-bankman-fried-bahamas.html), the charges filed against Bankman-Fried include wire fraud, wire fraud conspiracy, securities fraud, security fraud conspiracy, and money laundering.

However, it's still unclear whether customers will be able to recover some, if not all, of their funds. A 2 November report on ties between FTX and Alameda, a trading company also controlled by the FTX CEO, exposed that Alameda's balance sheet was overexposed to FTT currency (FTX's token).

According to the extradition treaty between the US and the Bahamas, defendants may be returned to the US provided their offenses carry a minimum one-year sentence in both countries.

The 30-year-old has recently disregarded legal counsel and increased his public appearances, providing his version of his company's abrupt failure and typically portraying himself as an inept CEO.

"I didn't knowingly commit fraud," he said during a BBC at the weekend. SBF told the interviewer he didn't want any of this to happen and added that he was "not nearly as competent" as he believed himself to be.



red image of crime scene with pictures of Sam Bankman-Fried and a sign that says "bahamas"

Former FTX CEO Sam Bankman-Fried Arrested

Following the collapse of FTX last month, pressure is rising on US regulatory body the SEC to beef up enforcement of major crypto sector centres. 

The failure of [FTX](https://www.wsj.com/articles/sec-faces-calls-to-boost-crypto-exchange-enforcement-after-ftx-collapse-11670474070) focused attention on crypto exchanges, which serve as key hubs for individual investors and provide services such as digital-coin sales, financing, and asset storage. Despite spending more than six years studying various sector aspects, the Securities and Exchange Commission regulatory agency still needs to sue a major cryptocurrency exchange.

According to sources familiar with the topic and regulatory disclosures, the [SEC](/news/article/xrp-vs-sec-lawsuit-update) is investigating exchanges such as Coinbase Global Inc. and the US operations of Binance and FTX. It has penalised or sued dozens of token creators over the past six years.

According to the SEC, several cryptocurrencies qualify as [securities](/news/article/sec-vs-ripple-news) that should have traded under stock and bond laws. The firm's Chair Gary Gensler says that exchanges are breaching the law by selling unregistered securities and failing to follow standards that the NYSE and Nasdaq Stock Market follow.

## Lawyers believe SEC crypto enforcement is not enough

Some attorneys argue that, despite such claims, regulatory enforcement measures have yet to go far enough as the sector has matured and ordinary people are committing their assets to crypto enterprises. Mr Gensler risks substantial criticism if he does not get things going", according to the report "former SEC enforcement attorney John Reed Stark.

It was a flaw in their plan not to pursue these entities, Mr. Stark explained. 

The exchange kept trading six assets after the SEC sued a former Coinbase employee in July, alleging that the business sold seven improperly issued securities. They could have sued Coinbase, but they chose not to. According to a Coinbase spokesperson, the company thinks that none of the six digital currencies are securities.

## Crypto exchanges believe SEC is using the wrong crypto enforcement laws

According to industry lawyers, the SEC crypto enforcement approach is exhibiting signs of wear and tear after years of the SEC utilising its enforcement arm to drive the industry into its supervision.

According to some industry attorneys, the activities of cryptocurrency exchanges are so unlike those of stock exchanges that compliance with their standards is impossible.


sec logo with hands shaking in the background

SEC Crypto Enforcement Warning

A [report](https://www.wsj.com/amp/articles/ftx-hires-forensic-team-to-probe-money-trail-11670446435?mod=lead_feature_below_a_pos1) from the Wall Street Journal (7 December) claims that FTX has formed a team of financial experts to trace billions of dollars in “missing” customer funds from the company.

The new management at FTX is looking to get to the bottom of the entire crisis, and they’re not aiming for a slow process. The team has outsourced the matter to a group of financial forensic experts to find out how and where the funds could have gone missing.

To be specific, [AlixPartners](https://www.alixpartners.com/), a firm that specialises in financial matters, has been trusted with this mountain of a task. This advisory committee will be led by Matt Jacques, formerly with the US Securities and Exchange Commission (SEC) as a chief accountant.

FTX will try to recover as many of the missing assets as possible with the help of this newly formed committee. Furthermore, the crypto company will need further assistance to rebuild its financial infrastructure from the ground up.

## Summary of the FTX crash

If you're even the slightest bit involved in the crypto industry, you've probably heard the name FTX pop up a few times over the last couple of months - and not in a good light. The crypto company has been under fire for letting almost $450 million of customer funds disappear.

The whole debacle and the story of "[who’s to blame](/news/article/ftx-bankrupt-who-to-blame)" is a mystery, even after months of speculation.

It's not the first time the company's CEO, Sam Bankman-Fried, has been alleged to have mismanaged customer funds. In an interview with [Vox](https://www.vox.com/future-perfect/23462333/sam-bankman-fried-ftx-cryptocurrency-effective-altruism-crypto-bahamas-philanthropy), Bankman-Fried claimed to have passed customer funds through Alameda Research, FTX’s sister company. He did admit his lack of control over his company’s operations, as he [tweeted](https://twitter.com/sbf_ftx/status/1590709166515310593?s=46&t=Br1_HGNzUBwspKZ7pF6myA), "I'm sorry. I f--d up" after the fiasco broke.

The company filed for bankruptcy in November. It's difficult to see them making a comeback, largely due to two major factors:

•	The global negative PR that the company has been a victim of over the period of several months.

•	A low probability of recovering the lost funds.

FTX’s new management will need a miracle to even get crumbs from this entire mess.



red image of money with sam bankman-fried in the foreground

FTX Brings in Financial Experts

Elon Musk, the CEO of both Tesla and Twitter, [tweets his thoughts on Sam Bankman-Fried's reported donation to the Democratic Party](https://twitter.com/elonmusk/status/1598993109786189826). Musk believes the co-founder and former CEO of the defunct cryptocurrency exchange FTX sent far more money to the party than what was officially acknowledged.

Replying to a tweet by Will Manidis, CEO of ScienceIO, which mentioned that SBF donated $40M to the Democrats, Elon said he believes the amount contributed by the former CEO of the fallen crypto exchange FTX is far bigger than what has been publicly announced.

![elon.PNG](https://s3.eu-west-2.amazonaws.com/prod-monitalks-media/elon_2943e6d6a1.PNG)

## SBF donating to political parties - Not for the first time

It is not the first time San Bankman-Fried has donated to a political party. He has previously acknowledged giving to the Republican Party in a covert manner.

 In 2020, he was reported to have given $10 million to assist Carrick Flynn, a failed Democratic candidate for a House seat in Oregon, while also giving $5.2 million to Joe Biden's presidential campaign.

He gave Democrats $39,884,256, according to Opensecrets, before FTX collapsed and had to file for [bankruptcy](/news/article/ftx-bankrupt-who-to-blame). The exchange meltdown caused millions of dollars in losses for investors and users. A probe into FTX's handling of consumer money improperly is now underway. The fall of FTX sparked a contagion that has caused several other platforms and [companies to struggle and some to collapse](https://cryptopotato.com/how-wide-does-ftx-contagion-spread-the-affected-companies-so-far).

Then Elon Musk tweets his allegation that the publicly declared $40M donation is incorrect and the actual amount could be anything above $1B. The internet is already flooded with articles and comments alleging that Bankman-Fried donated this amount to a political party to avoid going to jail.

Meanwhile, SBF has been invited to participate in an investigational hearing set on 13 December, 2022, by Democratic House Financial Services Committee Chair Maxine Waters and Republican Ranking Member Patrick McHenry.

The crypto community, alongside investors who lost their money in the FTX fall, is angry and waiting for justice. What is the future of SBF and will the investors get their money back? These are some of the questions people are looking to get answers to. Clarity will only come after a proper investigation.


Elon Musk Tweets 'Where Did the Money Go?'

US Deputy Treasury Secretary Wally Adeyemo has emphasized the need for the United States to collaborate with other countries to develop cryptocurrency regulations effectively.

This development comes a few weeks after FTX, the second most popular crypto exchange, based in the Bahamas, [became insolvent](/news/article/ftx-bankrupt-who-to-blame). CEO Sam Bankman-Fried declared that the protocol did not have sufficient assets to meet customers' demands.

Speaking at the [Reuters NEXT](https://events.reutersevents.com/next) conference, Adeyemo said countries must enact regulatory laws to protest investors, promote financial stability, and block illicit crypto users.

"This is a global phenomenon," Adeyemi said. He added that the US would work closely with international partners to design a regulatory framework to protect the global economy, especially with crypto innovations.

The Deputy Treasury Secretary noted that since FTX was not based in the US, regulatory efforts must be broadened.

## Crypto regulation post-FTX collapse

FTX declared insolvency and Bankman-Fried resigned from his position as CEO on 11 November, a few days after the world's biggest crypto exchange, Binance, dumped a deal to rescue the exchange. This was followed by angry traders pulling $6 billion out.

As a result, Rostin Behnam, chairman of the Commodity Future Trading Commission (CFTC), urged lawmakers on Thursday to quickly design a regulatory framework for crypto assets.

After several congressional hearings to examine the collapse of FTX, members of the Senate Agriculture Committee asked Behnam if the FTX collapse would have been controlled with better oversight.

However, the recent setback in the crypto market has not affected the banking sector. This is according to Janet Yellen, the US Treasury Secretary, who remains skeptical about the crypto industry. She believes in the need for adequate regulation.

While speaking at the DealBook event hosted by New York Times, the Treasury Secretary said adequate customer protection is needed in the crypto sector.

Just like Wally Adeyemo, she agrees that it is important to remain open to financial innovations, given that cryptocurrencies can lower the cost of cross-border transactions and promote financial inclusion.

"I have been skeptical, and I remain quite skeptical," Yellen said. She noted that recent developments are not centered on financial inclusion and cross-border payment.



Wally Adeyemo Calls for Crypto Regulation

The crypto winter has been a bloodbath for Bitcoin investors. Many have depleted their portfolios as they scramble to save what is left. However, following the fall of FTX, there's been an uptick in Bitcoin holders accumulating BTC in cold storage.

## FTX fall motivates self-custody

Recently, new highs were reached in the number of wallets holding 1 BTC or more. This is a positive indication that investors are determined to keep their Bitcoin holdings even when the price declines. Likewise, the number of wallets holding 10 BTC or less has also reached a record high.

The recent problem of insolvency among centralized exchanges has been linked to this recent accumulation in cold storage. The recent crashes of [FTX](https://www.theguardian.com/technology/2022/nov/18/how-did-crypto-firm-ftx-collapse), Voyager, Genesis, and other crypto firms have triggered negative sentiments in the market. Investors are increasingly worried they might lose their BTC if the exchange goes out of business.

Data from [Glassnode](https://studio.glassnode.com/metrics?a=BTC&m=distribution.BalanceExchanges&s=1570361904&source=content_type%3Areact%7Cfirst_level_url%3Aarticle%7Csection%3Amain_content%7Cbutton%3Abody_link&u=1587222400&zoom=) shows that, as a result, exchange balances have drastically decreased, with more than 177.9k BTC removed from exchanges in the last month. This trend will likely continue as investors become more aware of the risks of putting their money in centralized exchanges.

Bitcoin investors' withdrawals from centralized exchanges have also impacted exchange supply. Bitcoin available on exchanges has fallen to 11.99%, its lowest since December 2017.

Checkmate, the lead analyst at Glassnode, noted that this looks like at least a short-term movement towards self-custody, partly out of concern for CEX solvency.

## Hardware wallets enjoy good sales

A downturn in the market generally doesn't inspire the spirit of accumulation among investors. However, hardware wallets like [Trezor](/news/article/why-consider-a-trezor-wallet), Ledger, and ColdCard have experienced a surge in demand for their products.

Josef Ttek is a Bitcoin analyst at Trezor, one of the leading hardware wallet providers. He said there had been a 'dramatic increase' in demand for Trezor devices and the Trezor Suite.

"Normally, a bear market is rather a quiet period for us," he added. "This uplift in sales only shows how big of an impact the collapses of FTX and BlockFi have on people's trust in custodian services."

Trezor noted a [300% increase](https://cointelegraph.com/news/trezor-reports-300-surge-in-sales-revenue-due-to-ftx-contagion) in hardware sales following the FTX fiasco. Also, Relai, a Bitcoin exchange headquartered in Switzerland, has seen a similar rise in users and Bitcoin investors using their platform to trade.



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