12pm: SBF slapped with US$1bn lawsuit
Bankrupt cryptocurrency exchange FTX is suing its founder and former head Sam Bankman-Fried and other executives in a plan to recoup over US$1bn allegedly fraudulently siphoned from the company.
Led by former Enron administrator John J. Ray III, FTX’s bankruptcy estate filed the suit before the bankruptcy court in Delaware, naming Bankman-Fried’s former executive colleagues Caroline Ellison, Zixiao ‘Gary’ Wang and Nishad Singh as co-defendants.
Bankman Fried and co’s allegations are well documented. They are accused of misappropriating as much as US$8bn worth of FTX customers’ funds through sister platform Alameda Research.
Caroline Ellison, who was romantically involved with Bankman-Fried, was head of quant trading firm Alameda Research at the time.
She has pleaded guilty to conspiracy to commit wire fraud and is expected to testify against former lover and boss Bankman-Fried when his trial commences this October.
Wang and Singh have also pleaded guilty to fraud charges for their involvement in the multi-billion-dollar alleged fraud.
10am: Crypto down across the board
The cryptocurrency markets are down across the board this Friday, with benchmark cryptoasset bitcoin (BTC) failing to sustain the US$30,000 support line as the week comes to a close.
Following a volatile Thursday session, the BTC/USDT pair ended 0.4% lower at US$29,800, where it has stayed during this morning’s Asia trading window.
This comes as a concern for the bulls, who have largely managed to keep bitcoin above 30k over the past month. Furthermore, a swathe of 30k sell orders on the Binance order book could provide stiff resistance.
Bitcoin heads below 30k – Source: currency.com
Long liquidations on the futures market have shot up to US$13mln in the past 24 hours compared to US$4.8mln of short liquidations.
As for the world’s second-largest cryptocurrency, Ethereum (ETH) also had a volatile Thursday session, hitting a high of US$1,930 before closing approximately 0.15% higher at US$1,891.
Week on week, bitcoin and ether are now 4.6% and 5.4% lower respectively.
Even Ripple (XRP), which has been on an absolute rip of late following a partial win in its long-running dispute with the US Securities and Exchange Commission (SEC), has tipped into the week-on-week red.
Though with a market capitalisation above US$40bn, XRP remains the fourth-largest cryptocurrency, having flipped former fourth, Binance’s BNB token.
The global cryptocurrency market capitalisation currently stands at US$1.2tn, with bitcoin dominance at 49.83%.
FTX back in the news
The FTX spectre has reared its ugly head again, with the New York Times publishing diary entries written by Caroline Ellison, a former executive of Sam Bankman-Fried’s collapsed crypto empire.
Ellison, a former partner of Bankman-Fried, was head of Alameda Research, a sister hedge fund to Bankman-Fried’s FTX cryptocurrency trading desk.
The entries paint a picture of an executive ill-equipped to run a multi-billion-dollar corporation.
“Running Alameda doesn’t feel like something I’m that comparatively advantaged at or well suited to do,” she wrote in April 2022, seven months before FTX and Alameda collapsed with a US$8bn deficit.
She expressed elation when it became apparent that FTX and Alaedma were on the brink of destruction.
Ellison is expected to act as a star witness in Bankman-Fried’s trial commencing in October.