Three biggest crypto stories from the past week

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FTX topped the crypto news cycle for the sixth week in a row, with two key developments. First, US prosecutors are reportedly investigating Sam Bankman-Fried, the disgraced founder of the now-bankrupt crypto group FTX, for a potential fraud case against him, and second, Bankman-Fried has confirmed his willingness to testify before the House Committee on Financial Services in Washington, DC, on December 13. News related to the FTX spinoff domino effects also continued to emerge from key players such as Genesis and Amber.

FTX and SBF Unfolds

After initially ignoring the Senate Banking Committee’s request to testify or otherwise cooperate with an investigation into his bankrupt business empire, Bankman-Fried said he was ready to testify before Congress next week. next on the collapse of FTX.

Bankman-Fried said he still doesn’t have access to a lot of data, so there’s a limit to what he can say, but since the committee still thinks it would be helpful, he’s willing to testify on December 13. whether he actually shows up remains to be seen.

Meanwhile, US prosecutors are reportedly investigating Bankman-Fried for a possible fraud case against him. Prosecutors are reportedly investigating whether hundreds of millions of dollars were improperly transferred to the Bahamas when FTX’s November 11 bankruptcy filing in the United States. They would also investigate whether FTX broke the law by transferring funds to Alameda Research, FTX’s trading and investment sister company which also filed for bankruptcy with FTX last month.

Amber’s Growing Problems

Crypto firm Amber Group, which has exposure to FTX, has seen its troubles rise amid the ongoing crypto winter.

The Singapore-based crypto trading and lending firm, which began downsizing in September, has made more layoffs. Amber’s workforce has already peaked at around 1,100, and now that number is expected to drop to around 400 amid further job cuts. Amber’s US and European offices are now in single digit headcounts.

The company also suspended expansion plans and shifted its global marketing and sponsorship priorities. Amber had agreed sponsorship deals with soccer teams Atletico Madrid and Chelsea, estimated to be around $44 million and $25 million a year. The firm is trying to renegotiate both commitments, sources tell The Block. Bloomberg reported that Amber was looking to terminate her deal with Chelsea.

Earlier this week, Amber said business was “business as usual” following reports of a potential insolvency. When the FTX news hit, Amber was in the fundraising process, looking to raise $100 million at a fixed valuation of $3 billion. The Financial Times reported on Friday that Amber had successfully secured $50 million of the $100 million, with the deal expected to be announced in January.

Adding to her problems, Amber also owes around $130 million to the CEO of struggling crypto lender Vauld, Darshan Bathija, who parked Vauld’s funds in her name with Amber.

Genesis issues

The Genesis crypto lender, which had to halt withdrawals and new lending last month amid the FTX fallout, said it would take weeks rather than days to complete its action plan.

The firm said it was working “in consultation with highly experienced advisers and in close collaboration with our owner, DCG”, as well as holding discussions with customer representation groups.

Genesis owes at least $1.8 billion to its creditors. The company had to halt client withdrawals last month after taking heavy hits from FTX and earlier from Three Arrows Capital. Genesis attempted to raise funds and hired investment bank Moelis & Company to explore its options.

The company had previously warned of potential bankruptcy if it was unable to secure financing.

Disclaimer: As of 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took out a series of loans from former FTX and Alameda founder Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose these transactions.

2022 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended for use as legal, tax, investment, financial or other advice.

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