🥛FTX Bankrupt. SBF out as CEO. What now? 👀
- Writer Milk Man
- November 11, 2022
- •3 Min Read
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.
Let’s dive into what everyone is talking about.
FTX FILES FOR BANKRUPTCY
We'll start with the biggest & most recent news.
- 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. That’s 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
That’s 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.
The guy just can’t 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 😅
But it's Friday, and we want to be in a good mood. So we're going to give you two things:
1/ Money - we're giving away $250 to someone TODAY. All you have to do is reply to this email with “FRIDAY". The 200th person to reply will be the winner!
2/ Memes - a series of our favorites
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 don’t know about you, but I’m having some trust issues with centralizes exchanges this week…
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? There’s no KYC required. You can pick from thousands of tokens, swap them for discount codes and show your mom that your precious “internet money” can buy real things!
This month you can win $1,000 in BNB if you deposit tokens to your Ambire Wallet and purchase any gift card - just in time before Thanksgiving.
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. Here’s 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. Can’t 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. Armstrong😂😂
That's a wrap for today. Stay thirsty & see ya next week!
If you want more, be sure to follow our Twitter (@MilkRoadDaily)
A ROADERS REVIEW
VITALIK PIC OF THE DAY
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.
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