It's Friday - and this week was full of FLD.
Fraud. Lies. Deception.
My phone won't stop buzzing.
And boy, have things gotten crazier over the last 24 hours.
Prices jumped up (crypto, stocks) as the market reacted to lower-than-expected inflation. Feels nice to see green. I thought the universe stopped making those pigments.
Letβs dive into what everyone is talking about.
FTX FILES FOR BANKRUPTCY
We'll start with the biggest & most recentnews.
- FTX, FTX group (130 affiliated companies), and Alameda Research have all begun filing for bankruptcy
- Samuel Bankman-Fried is out as CEO. John J. Ray III will step in as the new CEO
What a name - "John J Ray III".
Sounds familiar...where have I heard that dope name before? Wait a minute...
Turns out, John is the lawyer that got called in to clean up the whole Enron mess.
This guy is the Better Call Saul of Bankruptcy.
Oh, and look at how similar Enron & FTX described themselves on their website: "built by traders, for traders".
1/ FTX resumed withdrawals!....but only for users in the Bahamas. Thatβs right, only the Bahamas. Sounds a bit, specific right?
Well turns out, most of the main employees (including SBF) all live there.
Hm⦠ya smell that? *sniff sniff* this milk has gone sour!
Some people even started using this as a loophole to withdraw money. Here's how it worked.
Bahamian residents created NFTs, sold them within the FTX marketplace at inflated prices to non-residents, then withdrew the cash for the buyers (for a small $100k fee).
Millions of dollars were transacted before the Bahamas SEC shut this down.
2/ The FTX contagion begins to spread. Here are some companies affected so far:
- Blockfi paused withdraws and hired bankruptcy counsel
- 10% of Multicoin AUM is stuck on FTX
- Galaxy revealed they lost $76M
- Genesis Trading reported a $175m loss. Earlier today they announced a capital infusion of $140m from their parent company, Digital Currency Group
- Rumors spreading about issues with other projects, but unconfirmed (Tether, Crypto.com, KuCoin)
3/ Reports came out that Samuel was a messy mother effer
Turns out he was dating the CEO of Alameda?
WHY DOES SHE LOOK LIKE HERMIONE'S COUSIN?! WHO GAVE THIS CHILD $10B OF CUSTOMER DEPOSITS TO PLAY WITH?!
Oh, and don't get me started on the VC funds that were invested in FTX. Apparently, Sam invested in those funds himself too (Sequoia, etc).
Basically, in exchange for letting them invest in FTX, he got to invest in their fund.
Allow me to explain with a diagram:
4/ Regulators all called crypto out. Gary Gensler. Senator Warren. The White House - they all piled on with the I-told-ya-so's.
Also - in the twist of the century, there are also rumors that Congress is investigating Gensler for helping SBF??? My brain officially hurts.
5/ Then reports came out that SBF lives in a $35m house & owns $200m+ of land in the Bahamas
Thatβs right. The "I drive a Corolla" image wasn't the full picture.
Turns out Bahamas HQ was just a fat mansion where Samuel & all his closest friends/employees lived & ran their scheme. Seriously, just look at this f*cking house.
6/ The entire FTX Venture Team quit
Earlier in the week, most of the legal and compliance team also abandoned ship.
We also got word that Rahul Ligma was fired from FTX.
Former FTX employee, Rahul Ligma, says FTX has just fired an entire team of data engineers at their HQ in the Bahamas.
β Chairman (@WSBChairman)8:12 PM β’ Nov 10, 2022
The guy just canβt catch a break. Last month, he lost his job at Twitter. This month, fired from FTX. Yo Mr. Ligma, hit us up. The Milk Road is hiring!
Yup, that all happened yesterday. Never boring, this crypto thing π
But it's Friday, and we want to be in a good mood. So we're going to give you two things:
- Money
- Memes
1/ Money - we're giving away $250 to someone TODAY. All you have to do is reply to this email with βFRIDAY". The 200th person to reply will be the winner!
2/ Memes - a series of our favorites
when you play the Game of Loans, you either win or you die
β CMS intern (@cmsintern)2:30 PM β’ Nov 11, 2022
Who made this πππ
β sassal.eth π¦π (@sassal0x)12:34 AM β’ Nov 11, 2022
Sam Bankman-Fried is such a committed philanthropist that he donated other people's money without asking them
β John W. Rich (Fake Tech Exec) (@Cokedupoptions)9:42 PM β’ Nov 10, 2022
So it turns out that 10 of the FTX employees/ founders were involved romantically. Weβre talking Sam, Caroline and co Iβm not sure whatβs worse. Losing our money or having to imagine that orgy π π
β Crypto Bitlord π¦πΊ (@crypto_bitlord7)11:27 PM β’ Nov 10, 2022
TODAY'S EDITION IS BROUGHT TO YOU BY AMBIRE WALLET
Houston, we have a problem. Cashing out crypto is getting hard.
Things can get tricky depending on taxes, regulations, and bureaucracy. And I donβt know about you, but Iβm having some trust issues with centralizes exchanges this weekβ¦
It can be easier though. Ambire Wallet, a new breed of self-custodial crypto wallet, lets you convert your crypto to gift cards and vouchers for 1,000s of worldwide retail brands!
The best part? Thereβs no KYC required. You can pick from thousands of tokens, swap them for discount codes and show your mom that your precious βinternet moneyβ can buy real things!
FUNDING FRIDAY
Each Friday we give you a rundown of Web3 companies that got funded during the week.
This week, we saw ~$194m get invested into crypto companies & funds. Hereβs who got the money:
Sepana got $10m to build the decentralized search engine for web3.
Notifi got $10m to build a cross chain messaging and notification protocol. Canβt wait for the first drunk blockchain text.
Xternity got $4.5m to build a no-code web3 gaming platform.
TRM Labs got $70m to prevent fraud and financial crime for digital currencies. Great timing for them.
If you wanna check out the complete database of companies that raised money in 2022, we got 'em for you right here.
MEME OF THE DAY
Well, well, well... How the tables have turned, Mr. Armstrongππ
That's a wrap for today. Stay thirsty & see ya next week!
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A ROADERS REVIEW
VITALIK PIC OF THE DAY
What a week ayeeee? Thank God it's Friday
β The Milk Road (@MilkRoadDaily)4:17 PM β’ Nov 11, 2022
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
