For a third week in a row, FTX dominated the crypto news circuit with even more startling revelations emerging from the now-bankrupt exchange.
From bankruptcy protection proceedings in the U.S. and The Bahamas to rumblings from Capitol Hill, there was no escaping the FTX saga this past week. Here are some of the major developments that caught the eye:
New FTX CEO
FTX got a new CEO this week in “Enron guy” John Ray III, so-called because he helmed the Enron cleanup after its highly publicized scandal. Ray did not waste much time in taking the previous FTX leadership to task. Founder Sam Bankman-Fried and his leadership team were described as displaying a “complete failure of corporate controls.”
The FTX bankruptcy filing also yielded several startling revelations. For one, Alameda Research, FTX’s sister firm, was secretly exempted from liquidations on the exchange. The document also showed that unsecured group emails were used to access confidential and sensitive data like private keys.
Another salvo in the FTX saga saw a significant update this week. This time it was the entity believed to have hacked the platform during the initial collapse. Dubbed “FTX drainer,” this wallet is now a major ether (ETH) whale, having swapped tokens siphoned during the heist to ETH.
Fallout and contagion
The FTX collapse elicited comments and reactions from policymakers in Washington. The House Financial Services Committee announced on Wednesday that it will hold a hearing on the matter in December.
Congressman Jake Auchincloss said that FTX’s alleged crimes were illegal a century ago. Treasury Secretary Janet Yellen called for “more effective oversight” of the crypto space in the wake of the exchange’s collapse.
The web of exposure spun by the FTX collapse was revealed to be much larger. Several companies and organizations came out to declare how they were impacted by the exchange collapsing. Genesis halted its lending product and paused withdrawals on Wednesday, with the problem also spreading to Gemini. Genesis Block HK, a crypto trading firm based in Hong Kong, said that it has $50 million stuck in FTX.
What about Binance?
Binance and its CEO Changpeng Zhao have had a major role in the FTX saga from the beginning. Now, policymakers in the U.S. and the UK are checking to see what role, if any, it may have played in its rival’s demise. Senator Ted Cruz suggested on Friday that Binance had “at minimum ill-intent” when it exited a proposed plan to buyout FTX last week.
The crypto exchange giant is moving ahead with plans to offer some support for affected firms. The platform also halted stablecoin deposits on the Solana blockchain.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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