Ornella Hernandez

More and more details of the now-insolvent crypto exchange FTX surface every day, and the spillover effects are ever more unfortunate.&nbsp;



The timeline below tracks major events <a href="https://blockworks.co/news/ftx-bankrupt-hacked-investigated-a-timeline-of-events" target="_blank" rel="noreferrer noopener">since</a> the Bahamian police began investigating FTX on Nov. 13 up to the revelations from the latest bankruptcy filings that Sam Bankman-Fried and other executives received personal loans totaling $1.5 billion.



<h3 class="wp-block-heading">Nov. 14 — Monday: Time out</h3>



The sports partnerships continued falling. The Golden State Warriors, the San Francisco-based NBA team, <a href="https://blockworks.co/news/golden-state-warriors-and-miami-heat-axe-ftx-deals" target="_blank" rel="noreferrer noopener">paused all FTX-related promotional deals</a>. Warriors point guard Stephen Curry was a global ambassador for FTX, and FTX US and its NFT marketplace were the Warriors’ official cryptocurrency platform. All these deals ceased to exist.&nbsp;



This move followed the Miami Heat NBA team ending its naming rights deal with FTX for its home stadium — FTX Arena. Additional partnerships with Major League Baseball to place the FTX logo on the uniforms of umpires and with the Mercedes-AMG Petronas F1 Team to add the FTX logo to the cars and uniforms of drivers were terminated.



<h3 class="wp-block-heading">Nov. 15 — Tuesday: Another FTX casualty&nbsp;</h3>



Bankman-Fried <a href="https://twitter.com/SBF_FTX/status/1592710177152995328?s=20&amp;t=afXyF7_qOhKdnJNbGdcKLA" target="_blank" rel="noreferrer noopener">tweeted</a> on this day that he was going to try “raise liquidity, make customers whole, and restart” as part of a days-long thread. Despite FTX’s Chapter 11 bankruptcy filing, he was reportedly in talks with <a href="https://blockworks.co/news/sbf-attempts-to-find-ftx-investors" target="_blank" rel="noreferrer noopener">investors who might help fund the $8 billion</a> that the company owes its traders and institutional clients — but the writing was on the wall.&nbsp;



Cryptocurrency lender, <a href="https://blockworks.co/news/blockfi-eyes-bankruptcy-as-ftx-fallout-continues-report" target="_blank" rel="noreferrer noopener">BlockFi announced it was likely to file for bankruptcy</a> on this day. The firm had earlier begun preventing withdrawals and it disclosed &#8220;significant exposure&#8221; to FTX the previous day. At one point in July, FTX had planned to acquire BlockFi outright for up to $240 million.



<h3 class="wp-block-heading">Nov. 16 — Wednesday: Class action lawsuit filed against SBF</h3>



The first <a href="https://blockworks.co/news/what-do-tom-brady-steph-curry-and-naomi-osaka-have-in-common-an-ftx-lawsuit" target="_blank" rel="noreferrer noopener">class action lawsuit against Bankman-Fried</a> was filed on this day, claiming that the insolvent crypto exchange violated Florida law and demanding $11 billion in damages on behalf of its customers. A number of its high-profile backers were named in the lawsuit, including Tom Brady, Gisele Bundchen, Stephen Curry, Shaquille O’Neal, David Ortiz, Naomi Osaka, Larry David and Kevin O’Leary, among others.



Using “the largest and most well-known marketers and celebrities was the only way that this massive fraud could have been successful,” one of the lawyers behind the case told Blockworks.



Also on Nov. 16, crypto lender Genesis, a subsidiary of Digital Currency Group, <a href="https://blockworks.co/news/genesis-halts-lending" target="_blank" rel="noreferrer noopener">halted withdrawals</a> to customer redemptions and new loan originations. This move caused the exchange, Gemini, to cease processing redemptions for clients using the Gemini Earn program in partnership with Genesis. Gemini said regular crypto withdrawals, however, are unaffected.



Additionally, Vox published an interview with Bankman-Fried, in which he blamed an ex-employee for malware on a device owned by an ex-employee for the hacking. He also <a href="https://blockworks.co/news/as-sbf-disses-regulators-ftx-disowns-sbf" target="_blank" rel="noreferrer noopener">criticized regulators and expressed regrets</a> about filing for bankruptcy.



FTX’s new CEO John J. Ray, III tweeted in response that, “Mr. Bankman-Fried has no ongoing role at [FTX], FTX US, or Alameda Research Ltd. and does not speak on their behalf.”&nbsp;



<h3 class="wp-block-heading">Nov. 17 — Thursday: ‘A complete failure of corporate controls’</h3>



Ray, who was brought in as a liquidator, stated in a sworn declaration submitted in bankruptcy court that according to FTX&#8217;s records, its subsidiary Alameda Research had made personal loans totaling $1 billion to Bankman-Fried and more than $500 million to FTX co-founder Nishad Singh.&nbsp;



Ray <a href="https://blockworks.co/news/worse-than-enron-sbfs-ftx-has-a-complete-absence-of-trustworthy-information" target="_blank" rel="noreferrer noopener">added</a> some harsh words. Despite having been involved in the bankruptcies of Enron: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”



Additional insight into the case confirmed that <a href="https://blockworks.co/news/5-highlights-ftx-bankruptcy" target="_blank" rel="noreferrer noopener">FTX did not comply with security controls</a> with respect to digital assets, misused customer funds, had unaudited financials and almost nonexistent employee management.&nbsp;&nbsp;



FTX’s local Bahamas arm, <a href="https://blockworks.co/news/ftx-bahamas-unit-filed-bankruptcy" target="_blank" rel="noreferrer noopener">FTX Digital Markets, filed for bankruptcy</a> protection in New York on this day. It opted for Chapter 15 bankruptcy, while FTX and 134 affiliate companies opted for Chapter 11 protection.&nbsp;



Another Digital Currency Group subsidiary, Grayscale, saw the value of its publicly traded <a href="https://blockworks.co/news/sec-grayscale-exploring-bitcoin-trust-options" target="_blank" rel="noreferrer noopener">Grayscale Bitcoin Trust (GBTC) decline by 20%</a> on Nov. 17.&nbsp; (GBTC) has persistently traded at a wide discount to the price of the spot bitcoins it holds, with its net asset value (NAV) hovering around 40% below the value of its Bitcoin.



<h3 class="wp-block-heading">Nov. 18 — Friday: Bahamas regulators custody FTX assets</h3>



Securities regulators in the Bahamas confirmed that they’re holding some of FTX’s assets in a press statement released on Nov. 18. They acknowledged transferring assets from of FTX Digital Markets into their custody after an emergency filing from FTX’s U.S. attorneys accused them of having directed former CEO Sam Bankman-Fried to do so. They added that they did not believe that FTX’s Bahamas subsidiary was subject to the US’ Chapter 11 bankruptcy proceedings.



The value of the assets was not confirmed, and it was unclear just how much of the cryptoasset movements could be attributed to actions by Bahamian regulators.



<h3 class="wp-block-heading">Nov. 19, 20 — Saturday and Sunday: Following the hacking trail</h3>



Over this weekend, on-chain analysts observed the FTX hacker, dubbed “FTX Accounts Drainer,” dumping ether for bitcoin. This caused the price of the ether to start dipping.&nbsp;



The <a href="https://twitter.com/kamikaz_ETH/status/1594293500451106816?s=20&amp;t=katw78Z4qb1jshgVJT0DmQ" target="_blank" rel="noreferrer noopener">hacker moved ether in different lots</a> — $186 million were moved into crypto cold storage, while $477 million was transferred to ether and stablecoin DAI.&nbsp;



On Nov. 20, the attacker transferred 50,000 ETH to a separate wallet and then converted it to BTC via renBTC — the Ren protocol bridge.



As the crypto community was monitoring hacked FTX funds, FTX <a href="https://twitter.com/FTX_Official/status/1594354846370758657?s=20&amp;t=ESxOHHGQRNgWxkiZ8fbvwA" target="_blank" rel="noreferrer noopener">urged</a> exchanges to cooperate by halting funds and returning them to “the bankruptcy estate.”



<h3 class="wp-block-heading">Nov. 21 — Monday: Pls-help</h3>



Etherscan data showed that the attacker moved a total of 180,000 Ether ($199.3 million) on Nov. 21 across 12 wallets. Each newly created wallet received 15,000 ETH.&nbsp;



By subdividing the total amount into smaller amounts, a process known as “peel chaining,” it not only confuses investigators but suggests the attacker could use a mixing service at some point.



Meanwhile, one user registered as ftx-rekt200k-pls-help.eth, sent an encoded message via ether to the hacker, claiming to have lost money from the FTX collapse and asking for a reimbursement. They even <a href="https://etherscan.io/address/0xb937eb52cfed2edc08d9d26bd7d40b4aea9b61b4" target="_blank" rel="noreferrer noopener">sent</a> 20 transactions of 0.000001 ETH to the hacker’s address.



<h3 class="wp-block-heading">Nov. 22 — Tuesday: SBF apologizes again, court hears from bankruptcy lawyers</h3>



A letter that Bankman-Fried <a href="https://twitter.com/lizrhoffman/status/1595183732989779970?s=20&amp;t=afXyF7_qOhKdnJNbGdcKLA" target="_blank" rel="noreferrer noopener">shared</a> with FTX employees was made public on Nov. 22. His opening line states that he feels “deeply sorry about what happened.” Finance journalist Liz Hoffman <a href="https://twitter.com/lizrhoffman/status/1595183732989779970?s=20&amp;t=afXyF7_qOhKdnJNbGdcKLA" target="_blank" rel="noreferrer noopener">tweeted</a> screenshots of the letter.



Along with the apologies and a list of collateral and liabilities under the FTX, Bankman-Fried said that “maybe there still is a chance to save the company.”



He did not, however, address allegations that FTX diverted customer and corporate funds to Alameda Research or that he and other executives took personal loans.



“None of this changes the fact that this all sucks for you guys,” added Bankman-Fried. In <a href="https://blockworks.co/news/ftx-run-by-inexperienced-unsophisticated-traders-court-hears" target="_blank" rel="noreferrer noopener">the first bankruptcy hearing</a> for FTX and its affiliated entities, lawyers told the court that a “substantial amount of assets” held by FTX cannot be accounted for. FTX now has a cash balance of $1.24 billion in total, they said.



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The Last 10 Days in the FTX Saga: A Timeline

David Canellis

Sebastian Sinclair

Bankruptcy lawyers are battling Bahamian regulators over crypto tied to former billionaire Sam Bankman-Fried’s FTX empire — raising questions about a peculiar half-billion-dollar hack on the exchange last week.



Last weekend, blockchain analytics unit <a href="https://hub.elliptic.co/analysis/477-million-moved-out-of-ftx-in-suspected-theft/" target="_blank" rel="noreferrer noopener">Elliptic</a> reported that $663 million in various cryptocurrencies had been drained from FTX wallets just 24 hours after 134 affiliated entities had filed for Chapter 11 bankruptcy on Nov. 11.



Elliptic at the time attributed $186 million of those outflows to FTX personnel, who’d appeared to be securing compromised funds to avoid further losses. The remaining $447 million in digital assets were said to have been siphoned in “unauthorized transfers,” with $220 million cashed out for ether and stablecoin DAI. Blockchain data shows the attacker interacting with decentralized exchanges such as Uniswap alongside aggregators 1inch and CoW Protocol.



At the time of the attack, FTX representatives in the firm’s Telegram channel characterized the situation as a hack and urged FTX users not to interact with the exchange’s website and apps for fear of malware.



FTX US general counsel Ryne Miller later shared a statement from FTX’s appointed restructurer John J. Ray III, who confirmed that “unauthorized access to certain assets has occurred.”



Fast forward to Thursday, and the Securities Commission of the Bahamas announced via Twitter it had assumed control of assets belonging to FTX Digital Markets, leading onlookers to question whether the commission was the hacker — albeit a “white hat” — all along.



“On [Nov. 12], the Commission, in the exercise of its powers as regulator acting under the authority of an Order made by the Supreme Court of the Bahamas, took the action of directing the transfer of all digital assets of FTX Digital Markets to a digital wallet controlled by the Commission, for safekeeping,” the Commission said.



It went on: “Urgent interim regulatory action was necessary to protect the interests of clients and creditors of FTX Digital Markets.”&nbsp;



The statement aligns with evidence provided by FTX representatives in their court filing, released shortly after the Commission’s tweet. They say government officials allegedly directed Bankman-Fried and co-founder Gary Wang — described as “effectively in the custody of Bahamas authorities” — to make the presumably unauthorized transfers.



According to FTX lawyers, the crypto is being kept with New York-based direct custody-service startup Fireblocks under control of the Bahamian government. Fireblocks declined to comment on the record.



FTX hacker could’ve been in waiting for a long time



The question remains: Was FTX actually hacked? On-chain data reviewed by Blockworks does indeed show addresses linked to an attacker draining almost half a billion dollars in various cryptocurrencies from FTX hot wallets — including FTX US — on Nov. 12.



Tokens were apparently siphoned across multiple blockchains including Ethereum, Solana and Binance Chain. Cryptocurrencies such as gold-pegged asset pax gold, tether, ether, chainlink, shiba inu and bitcoin all featured prominently in the haul, as well as aave and apecoin.



As earlier noted by Elliptic, much of the funds in question were quickly sold for MakerDAO’s decentralized stablecoin DAI and ether — assets considered uncensorable. Notably, no funds were sent to crypto mixers such as Tornado Cash. Read more: <a href="https://blockworks.co/crypto-mixers-and-privacy-coins-can-they-resist-censorship/" target="_blank" rel="noreferrer noopener">Crypto Mixers and Privacy Coins: Can They Resist Censorship?</a>



Tether, on the other hand, quickly moved to freeze around $47 million in USDT, rendering the tokens moot and valueless.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Multiple former FTX employees confirmed to me they do not recognize these transfers for ~$383m <a href="https://t.co/YcqT0jrqIQ">https://t.co/YcqT0jrqIQ</a>&mdash; ZachXBT (@zachxbt) <a href="https://twitter.com/zachxbt/status/1591276687228035074?ref_src=twsrc%5Etfw">November 12, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



But Tom Robinson, chief scientist at Elliptic, isn’t totally convinced the incident was a hack. In an email to Blockworks, Robinson explained that based on the information shared publicly it&#8217;s still not clear exactly what happened. But his interpretation would be that the Bahamian regulator gave instructions to convert the stablecoins and other tokens into ETH and DAI to avoid them being frozen by their issuers.



“That or whoever was directed to move the assets took it upon themselves to perform the conversion. But that&#8217;s just speculation on my part at the moment,” Robinson said.



Bankman-Fried addressed the apparent hack in recent <a href="https://www.vox.com/future-perfect/23462333/sam-bankman-fried-ftx-cryptocurrency-effective-altruism-crypto-bahamas-philanthropy" target="_blank" rel="noreferrer noopener">conversations</a> with Vox journalist Kelsey Piper, saying that the hacker was either a disgruntled employee or a bad actor who had smuggled malware onto an employees machine, leading to compromised hot wallet private keys.



Indeed, court filings recently showed just how lax FTX cybersecurity practices were. Lawyers maintain that former CEO Bankman-Fried and chief technology officer Wang used an “unsecured group email account to access confidential private keys and other critically sensitive information.”



Retrieving FTX’s stolen crypto could take years — if at all



To Nick Bax, head of research at crypto research and development startup Convex Labs, this leaves open the possibility that a company insider was phished — which could’ve directly led to the hack last week. Similar prominent thefts have been linked to the <a href="https://blockworks.co/tag/lazarus" target="_blank" rel="noreferrer noopener">Lazarus hacking group</a> affiliated with the North Korean government, which has <a href="https://arstechnica.com/information-technology/2022/11/how-north-korea-became-a-mastermind-of-crypto-cyber-crime/" target="_blank" rel="noreferrer noopener">cultivated vulnerabilities</a> within crypto companies, although there has been no direct evidence or allegations made by law enforcement in this case.



Bax remained confident that the initial Ethereum wallet labeled as <a href="https://etherscan.io/address/0x59ABf3837Fa962d6853b4Cc0a19513AA031fd32b" target="_blank" rel="noreferrer noopener">FTX Account Drainer</a> on Etherscan was a black hat hacker. He described a scenario where a hacker had gotten to FTX’s unsecured email account and FTX private keys.&nbsp;



“Like everybody else, you think FTX has $10 billion or $20 billion — what do you do? Stay in the network and wait for your opportunity to steal it all,” Bax said.



“We do know in other cases, sophisticated or state-sponsored hackers, they had an opportunity to steal a life-changing amount of money, but they stayed and maintained their foothold in the network for months and months, waiting for the opportunity to maximize their theft. In the case of FTX, they could’ve realized that FTX was actually insolvent at the same time as everybody else, and just pulled what they could.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Imagine they’re referring to the tokens sent by the FTT deployer/ last withdrawal from FTX and not 0x59 Bahamians prob wouldn’t have been sporadically moving funds across chains, selling for DAI/ETH, and dumping coins for losses from slippage. <a href="https://t.co/7dd2HFK5wu">https://t.co/7dd2HFK5wu</a>&mdash; ZachXBT (@zachxbt) <a href="https://twitter.com/zachxbt/status/1593390778222518275?ref_src=twsrc%5Etfw">November 17, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Kraken Chief Security Officer Nick Percoco <a href="https://twitter.com/c7five/status/1591434844760076290" target="_blank" rel="noreferrer noopener">tweeted</a> at the time of the attack that the exchange knew the identity of the attacker, as Kraken accounts had funded certain transaction fees for some illicit transactions. Percoco later appeared to walk those comments back, <a href="https://twitter.com/c7five/status/1591498142578515971">tw</a><a href="https://twitter.com/c7five/status/1591498142578515971" target="_blank" rel="noreferrer noopener">e</a><a href="https://twitter.com/c7five/status/1591498142578515971">eting</a> that the accounts in question may have belonged to FTX, and the cited transactions may have been part of efforts to safeguard crypto from the attack. Blockworks has reached out for comment.



But whether it was a disgruntled employee, North Korean hackers or someone else, the matter of whether the funds could eventually be retrieved and returned to FTX creditors is unclear.&nbsp;



Bax, who has worked extensively in cryptoasset recovery on behalf of hacking victims, explained that retrieving the funds begins with identifying the hacker.&nbsp;



“There’s been several large recoveries from the Silk Road hack and those took years. There’s been a partial recovery from the North Korean hacks of the Ronin network, but they only got around 20% back,” Bax said.



“It really depends on who it is, if it’s an insider — it’s not that hard. If it’s the North Koreans who hacked the insider, then good luck.”



Macauley Peterson contributed reporting.



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White Hat v. Black Hat: What Really Happened With the FTX Hack?

FTX Group has filed for Chapter 11 bankruptcy in the US, and customers have been scrambling to get their money off the platform — by any means necessary.



The crypto exchange had <a href="https://cms.blockworks.co/news/ftx-re-enables-withdrawals-but-only-in-bahamas/" target="_blank" rel="noreferrer noopener">re-enabled withdrawals</a> on Thursday, but only in the Bahamas, the location of its headquarters and many employees. 



Some users without a Bahamian account themselves found a way to circumvent the system by using FTX&#8217;s NFT marketplace.



The marketplace tracked over $50 million in volume in the past 24 hours despite a Bahamas securities regulator <a href="https://cms.blockworks.co/news/bahamas-regulator-freezes-ftx-assets/" target="_blank" rel="noreferrer noopener">freezing the assets</a> of local subsidiary FTX Digital Markets (FDM).



Bahamian residents were buying NFTs on the FTX marketplace at inflated prices and withdrawing the cash for non-residents, UpOnlyTV host Cobie tweeted.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Apparently this is a Bahamas account withdrawing other people&#39;s funds for them. They are likely bypassing the internal balance transfers block by selling NFTs on FTX&#39;s NFT marketplace &#8212; eg. Bahamas account creates an NFT, the stuck user buys the NFT with their full balance. <a href="https://t.co/VphzwQprdQ">https://t.co/VphzwQprdQ</a>&mdash; Cobie (@cobie) <a href="https://twitter.com/cobie/status/1590974648552148992?ref_src=twsrc%5Etfw">November 11, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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A closer look at collections on the marketplace showed some extreme price jumps for some otherwise unremarkable NFTs. 



For instance, on Nov. 10, FTX Crypto Cup 2022 Key #25162 <a href="https://ftx.com/nfts/token/373684342259715392" target="_blank" rel="noreferrer noopener">sold</a> for $2.5 million when days earlier the NFTs in this collection were being traded for less than $1. Activity for the collection picked up only between Nov. 10 and Nov. 11 when it saw dozens of trades in the six and seven digit range. 



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="636" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ftx-crypto-cub-nfts-1024x636.jpg" alt="FTX Crypto Cup NFT sales" class="wp-image-38639" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ftx-crypto-cub-nfts-1024x636.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ftx-crypto-cub-nfts-1024x636.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ftx-crypto-cub-nfts-1024x636.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ftx-crypto-cub-nfts-1024x636.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ftx-crypto-cub-nfts-1024x636.jpg?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ftx-crypto-cub-nfts-1024x636.jpg?w=414 414w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ftx-crypto-cub-nfts-1024x636.jpg?w=420 420w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ftx-crypto-cub-nfts-1024x636.jpg?w=352 352w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ftx-crypto-cub-nfts-1024x636.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ftx-crypto-cub-nfts-1024x636.jpg?w=50 50w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>FTX Crypto Cup NFT sales</figcaption></figure>



The Great Ape collection and its Ape Art NFTs saw its first jump from $1 to a $500 trade, while the most expensive Ape Art #312 <a href="https://ftx.com/nfts/token/433228574468941881" target="_blank" rel="noreferrer noopener">went for</a> a $10 million bid and trade on Friday.   



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="653" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ape-art-nfts-1024x653.jpg" alt="Ape Art NFT sales" class="wp-image-38640" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ape-art-nfts-1024x653.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ape-art-nfts-1024x653.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ape-art-nfts-1024x653.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ape-art-nfts-1024x653.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ape-art-nfts-1024x653.jpg?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ape-art-nfts-1024x653.jpg?w=403 403w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ape-art-nfts-1024x653.jpg?w=409 409w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ape-art-nfts-1024x653.jpg?w=343 343w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ape-art-nfts-1024x653.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/11/ape-art-nfts-1024x653.jpg?w=50 50w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Ape Art NFT sales</figcaption></figure>



One user, AlgodTrading, was lambasted by crypto Twitter for <a href="https://twitter.com/Crypto_Noddy/status/1590927546920669185?s=20&amp;t=rTXkA_zkxCBK6Ky_Vxbz7w" target="_blank" rel="noreferrer noopener">offering</a> a 100K fee to anyone that could help him “KYC on FTX.” However, he responded to the screenshot, <a href="https://twitter.com/AlgodTrading/status/1591051607583576064?s=20&amp;t=rTXkA_zkxCBK6Ky_Vxbz7w" target="_blank" rel="noreferrer noopener">claiming</a> that he did not “buy any discounted claims/assets or accounts” and that “these rumors are false.”



The identities of those behind the Bahamian accounts helping non-residents is unknown, and the legalities around this are unclear.&nbsp;&nbsp;



The FTX.com website states that “depositing and minting of NFTs is not supported on FTX International” and is directing users to its FTX US NFT marketplace.



While bids continue to be placed on FTX International’s NFT marketplace, the last trade <a href="https://ftx.com/nfts/token/293370523733131199" target="_blank" rel="noreferrer noopener">occurred</a> at 2:47 AM ET on Nov. 11 for a FTX Crypto Cup 2022 Key NFT for $500, indicating this exit ramp is no longer available.



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FTX NFTs Provided Loophole For Non-Bahamas Residents Wanting to Withdraw Funds

FTX.com paused processing withdrawals on the platform Tuesday as its solvency crisis became acute, and executives <a href="https://cms.blockworks.co/news/ftx-turns-to-apollo-in-latest-bailout-bid/" target="_blank" rel="noreferrer noopener">search for new funding</a>. 



Earlier today, blockchain analytics platform Nansen first <a href="https://twitter.com/Blockanalia/status/1590736121730076672?s=20&amp;t=NCx6ZW7yFE3uX5Ma9QzvoA" target="_blank" rel="noreferrer noopener">noticed</a> limited withdrawal activity appeared to pick back up again and tracked up to $7.2 million taken off FTX.



Most FTX customers are still frozen out of withdrawing funds, but the troubled crypto exchange <a href="https://twitter.com/FTX_Official/status/1590783569471115264?s=20&amp;t=0o-O0z_gAH3OukZhY1OoLQ" target="_blank" rel="noreferrer noopener">confirmed</a> via Twitter that individuals within the Bahamas were permitted to do so. <a href="https://cms.blockworks.co/news/bahamas-becoming-crypto-hub/" target="_blank" rel="noreferrer noopener">FTX has been headquartered</a> on the island since April.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">1) Per our Bahamian HQ&#39;s regulation and regulators, we have begun to facilitate withdrawals of Bahamian funds. As such, you may have seen some withdrawals processed by FTX recently as we complied with the regulators.&mdash; FTX (@FTX_Official) <a href="https://twitter.com/FTX_Official/status/1590783569471115264?ref_src=twsrc%5Etfw">November 10, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



This means that FTX likely prioritized its employees or insiders who had accounts with verified local Bahamas addresses. It added that it is “working on additional routes to enable withdrawals for the rest of our userbase” around the world.&nbsp;



One former staff member, Zane Tackett, resigned from his position as head of institutional sales at FTX and <a href="https://twitter.com/tackettzane/status/1590541239619059713?s=20&amp;t=MiXz6NaZs6Xe10xCJo62Iw" target="_blank" rel="noreferrer noopener">confirmed</a> on Twitter that he “stored a huge portion of my money on ftx.” 



Customers without Bahamian accounts, who have requested withdrawals over the past few days may have to continue waiting.



Only holders of Tron-based tokens TRX, BTT, JST, SUN, and HT have been allowed to swap assets from FTX 1:1 to external wallets, thanks to an agreement with Tron, <a href="https://help.ftx.com/hc/en-us/articles/10739365280276-FTX-Announcement-Regarding-the-Tron-Credit-Facility" target="_blank" rel="noreferrer noopener">announced on FTX.com</a>. That has led to a peculiar situation whereby tron (TRX), for instance on FTX is trading for roughly 7 times the market price elsewhere.



Additionally, FTX US, a separate entity, announced on its website Thursday that trading “may be halted” in a few days.



“Please close down any positions you want to close down. Withdrawals are and will remain open. We will give updates as we have them” FTX US said.



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FTX Re-enables Withdrawals, But Only in Bahamas

Casey Wagner

<div id="highlights-block_62741aaf6bd13" class="highlights">
 <ul>
 <li>US agencies can’t agree on jurisdiction over the cryptocurrency industry, and it’s slowing progress, FTX CEO Sam Bankman-Fried said</li>
 <li>Countries that fail to act on crypto regulation risk losing business, experts warned</li>
 </ul>
 
</div>



There’s a power struggle in Washington, and it’s slowing crypto’s progress, Sam Bankman-Fried, head of Bahamas-based cryptocurrency exchange FTX, said.&nbsp;



At the center of the battle is the Commodity Futures Trading Commission (CFTC) and the SEC, which have long been vying for control over the digital asset industry. If the agencies could agree on who is responsible for licensing cryptocurrency exchanges, significant progress could be made, Bankman-Fried said.&nbsp;



“That alone would solve, like, 60% of the problem,” he told Blockworks.&nbsp;



The CFTC, created in 1974 to oversee commodity futures and derivatives trading, sees digital currencies as commodities.



While the SEC says the two largest cryptocurrencies by market cap, bitcoin and ether, are not securities, that has not stopped the agency from cracking down on other tokens and initial coin offerings, a capital raising tool the SEC sees as an unregistered security offering.&nbsp;



It’s not only an agency-level issue, either, Ron Hammond, director of government affairs for the crypto advocacy group <a href="https://theblockchainassociation.org" target="_blank" rel="noreferrer noopener">Blockchain Association</a>, said. Congressional committees are jockeying to see where their jurisdiction lies, and individual lawmakers are taking stronger stances around crypto-related issues.&nbsp;



“It’s all over DC — it&#8217;s kind of more like a power grab right now,” Hammond said.&nbsp;



Even so, Bankman-Fried, who has made the maximum $5,800 donation to individual candidates about a dozen times to members of Congress from both parties, is confident that some sort of guidance could be coming in the near future.&nbsp;



“We’re not actually in a place with more federal oversight than we were in a year ago,” he said. “We’re in a place where there are concrete proposals that could be enacted very soon that are being seriously considered.”



Crypto regulation seems to be in limbo around the world, too, industry members said.&nbsp;



“For a lot of countries, we&#8217;re waiting to see where things will go,” Nick Du Cros, head of compliance and regulatory affairs at CoinShares, said. “It seems that through mechanisms like the G7 and the G20, the big countries are coming together, and they have a roadmap and international standards, but I also think there&#8217;s domestic political pressure…and that&#8217;s when you might start having differences between different countries.”&nbsp;



Vastly different policies around the world means countries risk losing out on business, Du Cros said, a scenario FTX has faced firsthand.&nbsp;



The exchange, formerly headquartered in Hong Kong, launched its US-based affiliate, FTX.US, in 2020 because US regulations blocked its services. FTX.US is still not available to New York residents because of the state’s bitlicense policy, as well as the lengthy approval process that comes with securing one.



International regulators coming forward with clear guidelines is likely going to help the entire industry advance, Bankman-Fried said.&nbsp;



“It gives a template for other countries to use, and from a competitive aspect, it creates competitive pressure for jurisdictions to roll out frameworks of their own,” he said.



Dan Keeler contributed reporting.



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CFTC, SEC Cooperation Key to Solving Crypto’s Regulatory Woes, FTX CEO says

<div id="highlights-block_62681a0990048" class="highlights">
 <ul>
 <li>FTX cited friendlier regulations and looser Covid-19 restrictions as reasons for its move from Hong Kong to the Bahamas</li>
 <li>The island nation has pushed the pace for the development of sophisticated digital asset regulatory frameworks as it eyes large crypto businesses</li>
 </ul>
 
</div>



Cryptocurrency exchange FTX has cemented its relationship with the Bahamas, having broken ground Monday on its new headquarters in the country&#8217;s capital.



Announced partly by FTX&#8217;s co-CEO, <a href="https://twitter.com/rsalame7926/status/1518609692968341506?s=20&amp;t=JBEa31mkelEKhczwNDx5QQ" target="_blank" rel="noreferrer noopener">Ryan Salame</a>, the move could serve as a bellwether for similar crypto companies looking to take advantage of the island country&#8217;s favorable tax and regulatory frameworks.



Founded by billionaire Sam Bankman-Fried, FTX is incorporated in the neighboring island nation of Antigua and Barbuda, while its new headquarters will be based in the Bahamas&#8217; capital of Nassau.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">At the official groundbreaking for FTX’s coming headquarters in The Bahamas! <a href="https://t.co/c0N1eEJCY7">pic.twitter.com/c0N1eEJCY7</a>&mdash; SBF (@SBF_FTX) <a href="https://twitter.com/SBF_FTX/status/1518603431182807042?ref_src=twsrc%5Etfw">April 25, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The company plans to construct a campus at the same location, estimated to cost up to $60 million, with the intent of housing 1,000 employees, according to local news outlet <a href="https://thenassauguardian.com/planned-ftx-campus-to-cost-up-to-60-mil-house-1000-employees/" target="_blank" rel="noreferrer noopener">The Nassau Guardian</a>.



The complex will feature a boutique hotel with 34 rooms, as well as commercial space.&nbsp;



Last year, the crypto derivatives marketplace made the decision to <a href="https://cms.blockworks.co/bankman-fried-says-ftx-no-longer-calls-hong-kong-home-heres-why/" target="_blank" rel="noreferrer noopener">relocate from Hong Kong</a> to bluer waters, citing friendlier regulations and no mandatory Covid-19 quarantine upon arrival.



Coupled with its &#8220;<a href="https://www.ft.com/content/ced5ff02-6999-44e6-b9c9-611c17ebf6bc" target="_blank" rel="noreferrer noopener">draconian</a>&#8221; pandemic measures, the special administrative region&#8217;s <a href="https://apnews.com/article/china-hong-kong-beijing-democracy-national-security-9e3c405923c24b6889c1bcf171f6def4" target="_blank" rel="noreferrer noopener">bout and subsequent failure</a> to maintain its democratic government has led <a href="https://www.theguardian.com/world/2021/sep/07/hong-kong-international-companies-reconsider-future-in-wake-of-security-law">international companies</a> to reconsider their future in Hong Kong — jurisdictions including Singapore and the Bahamas appear sanguine, <a href="https://www.businessinsider.com/hong-kong-corporate-exodus-destinations-covid-quarantine-measures-2022-4#hong-kongs-stringent-pandemic-measures-have-taken-a-toll-on-the-citys-residents-with-exits-picking-up-pace-over-the-last-two-years-as-the-citys-zero-covid-strategy-wears-on-1" target="_blank" rel="noreferrer noopener">according to some</a>.



“The proactive stance taken by The Bahamas and its regulatory bodies on cryptocurrencies” was a primary motivator for the move, Bankman-Fried told Blockworks in a September email.



<h3 class="wp-block-heading">Paradise found</h3>



Joining FTX&#8217;s Bankman-Fried at the ceremony, Bahamian Prime Minister <a href="https://twitter.com/HonPhilipEDavis"></a>Philip Davis said the exchange left &#8220;positive footprints&#8221; throughout the country.



&#8220;Today, they continue to make positive impressions with the groundbreaking of their new headquarters,&#8221; Davis <a href="https://twitter.com/HonPhilipEDavis/status/1518641869110054914?s=20&amp;t=B-KqYUWNifeTHMTsjhg3qA" target="_blank" rel="noreferrer noopener">tweeted</a>. 



FTX&#8217;s announcement follows the Davis administration&#8217;s rollout of a <a href="https://opm.gov.bs/the-future-of-digital-assets/" target="_blank" rel="noreferrer noopener">policy white paper</a> on &#8220;The Future of Digital Assets in The Bahamas.&#8221;<a href="https://twitter.com/HonPhilipEDavis"></a>



The paper details the island nation&#8217;s four-year vision to transform the country into a &#8220;leading digital asset hub&#8221; in the Caribbean and to position itself as a global leader in the &#8220;progressive regulation&#8221; of crypto businesses.



Policy objectives set forth therein include intentions to expand the scope of current <a href="https://grahamthompson.com/updates/15-faqs-on-the-digital-assets-and-registered-exchanges-dare-act-2020/" target="_blank" rel="noreferrer noopener">legislative frameworks</a>, encourage innovation and develop skills to fill crypto-friendly jobs in high demand. 



Developing necessary skills will rely on the government&#8217;s partnerships with the University of The Bahamas, the Bahamas Technical and Vocational Institute, FTX and other financial institutions, according to a Tuesday <a href="https://opm.gov.bs/a-move-towards-innovation-the-bahamas-makes-its-mark-as-a-digital-assets-hub/" target="_blank" rel="noreferrer noopener">press release</a>.



The paper also lays out plans to expand the resources of the Securities Commission of The Bahamas to bolster its role as the main crypto regulator.



Following FTX&#8217;s ceremony, Davis said he was expecting to meet with another &#8220;digital crypto giant&#8221; immediately after, The Nassau Guardian <a href="https://thenassauguardian.com/pm-meeting-with-another-cryptocurrency-giant/" target="_blank" rel="noreferrer noopener">reported</a>. It is not yet known which company the prime minister was referring to.



<blockquote class="wp-block-quote">&#8220;As our country becomes the vanguard in digital assets around the Caribbean and the world, the policy that we put in place now can significantly generate a much needed economic recovery and change the landscape of the Bahamian financial markets as we know it,&#8221; Davis said.</blockquote>



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Why Crypto Companies Are Choosing the Bahamas to Set Up Shop

<div id="highlights-block_624b71f4bcd04" class="highlights">
 <ul>
 <li>Central banks are going to continue to investigate CBDCs, PwC analysts say</li>
 <li>Stablecoins offer many of the same benefits as CBDCs but without the surveillance that comes with a government-issued currency</li>
 </ul>
 
</div>



The vast majority of central banks are considering launching a central bank digital currency (CBDC), according to analysts at accounting firm PwC.



“CBDCs will facilitate more effective, lower cost and 24/7/365 cross-border payments for the financial services industry,” analysts from PwC said in the firm’s annual <a href="https://www.pwc.com/gx/en/new-ventures/cryptocurrency-assets/pwc-global-cbdc-index-stablecoin-overview-2022.pdf" target="_blank" rel="noreferrer noopener">index</a> of CBDCs and stablecoins, which was released Monday. “We expect that CBDCs will greatly benefit cross-border transactions and economies of all relevant jurisdictions.”



Overall, retail CBDC projects, which are digital currencies designed for public use, have reached greater maturity levels than wholesale projects, which are digital currencies used by financial institutions that have accounts with central banks, the report notes. There has been an increase in wholesale pilots in recent years though, analysts said.



China became the first major economy to pilot a retail CBDC in 2020 with the digital yuan. The pilot is running in 12 cities as of March 2022.&nbsp;



The Sand Dollar, issued by the Central Bank of the Bahamas as legal tender in October 2020, was the first retail project of its kind. Nigeria’s central bank launched the first CBDC in Africa, the eNaira, shortly afterwards.&nbsp;



On the wholesale side, PwC ranked the combined effort from the Hong Kong Monetary Authority and the Bank of Thailand to launch mBridge as the top product. The central banks are working to develop a proof-of-concept prototype to enable real-time, cross-border foreign exchange payments on distributed ledger technology.



Other top projects include efforts by Canada, Singapore, France and South Africa.



“Wholesale CBDCs have the potential to streamline security token post-trade operations through atomic delivery-versus-payment and increase the market efficiency for several asset classes,” Benoit Sureau, PwC France and Maghreb financial services risk and blockchain partner, said.



PwC analysts for the first time included a stablecoin overview in the annual CBDC index report, noting that privately issued tokens will continue to evolve and exist alongside CBDCs.&nbsp;



Stablecoins reached a market capitalization of around $190 billion in early 2022 and will continue to grow as the tokens offer many of the same benefits as a CBDC without the surveillance that comes with a government-issued currency, the report noted.&nbsp;



Transparency around reserve assets, particularly for stablecoins that are backed with fiat currency, will be a major concern going forward, though, as the asset class continues to grow and regulation ramps up, analysts added.



“The role of the stablecoin in the crypto markets has and will continue to evolve as adoption of crypto increases, forcing a more prominent role of stablecoins across the larger financial ecosystem,” Matt Blumenfeld, director and digital asset specialist at PwC said. “Regulation will only strengthen the importance and give credence to the role that stablecoins will play.”



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PwC: More Than 80% of Central Banks Are Considering Launching a CBDC

Michael Bodley

<div id="highlights-block_623e22cfd78c2" class="highlights">
 <ul>
 <li>LibertyEx is in the process of raising a $10 million Series A round. Follow-up round could take the form of a token sale</li>
 <li>The exchange will support both institutional and retail offerings in digital assets, plus alternative and traditional asset classes</li>
 </ul>
 
</div>



A new cryptocurrency exchange that facilitates the trading of digital assets, NFTs and traditional securities is primed to launch, according to sources familiar with the matter.&nbsp;



LibertyEx has in recent weeks started offering over-the-counter crypto trades, the sources said. A broader launch is set for April.&nbsp;



Leading the effort, according to marketing materials obtained by Blockworks, is CEO James Row of Houston-based boutique investment bank Entoro Capital, which has a healthy crypto book.&nbsp;



Row is in the process of raising a $10 million Series A round for LibertyEx. That’s expected to be followed by a $100 million follow-up round, which could take the form of a token sale. 



The startup exchange is now in the process of obtaining regulatory approval from jurisdictions including the Bahamas, <a href="https://cms.blockworks.co/el-salvador-pushes-volcano-bond-issue-unveils-state-owned-company-backing/" target="_blank" rel="noreferrer noopener">El Salvador</a>, Switzerland and the <a href="https://cms.blockworks.co/abu-dhabi-ramps-up-effort-to-become-middle-easts-crypto-hub/" target="_blank" rel="noreferrer noopener">United Arab Emirates</a>. It plans to offer about 40 spot trading products at launch, with 20 or so additional new trading pairs set to be introduced each month. 



Derivative digital asset trades, which are still in development, are likely set to include perpetuals, futures, options, leveraged tokens and volatility plays. It plans to additionally offer its own NFT (non-fungible token) marketplace, which would support both regulated securities and assets.&nbsp;



Part of the plan includes a so-called “white glove,” turnkey service for institutional investors, who will be able to engage in crypto trading, staking and yield plays and derivatives. The business line would offer advisory services, as well as crypto wealth management.&nbsp;



A market-making business is also in the works — as are integrations with popular third-party DeFi and Web3 platforms.&nbsp;



There’s also pending access to private crypto funds for accredited limited-partners, plus placement-agent and marketing services for digital-asset managers.&nbsp;



The broad idea is to capture multiple alternative and crypto asset classes in a regulatory-approved and know-your-customer-compliant manner — with support for both institutional and retail clients.&nbsp;



LibertyEx has inked a number of crypto service providers as partners, including custodian Fireblocks.



LibertyEx, according to the marketing materials, has pegged its total addressable market at $31.05 trillion, including $1.9 trillion of crypto assets, with the remainder stemming from traditional and alternative asset classes.&nbsp;



The exchange estimates there were 300 million more digital-currency users worldwide last year, along with more than $64 billion of institutional dollars flowing into the space. Venture capitalists, meanwhile, <a href="https://cms.blockworks.co/2021-crypto-vc-funding-tops-30b-market-is-superheated/" target="_blank" rel="noreferrer noopener">plowed nearly $30 billion</a> into digital-asset startups in 2021, up from $6.5 billion the year before, according to the marketing materials. 



The startup also plans to offer banking on-ramp strategies, plus crypto mining services.&nbsp;



At least 14 employees are set to be on board at launch. Among them, in addition to Row: Chief Financial Officer Elias Bahaia Siman, CEO of an El Salvador textiles company; Chief Risk Officer Michael Miller, a former hedge fund professional who has spent time at Oaktree Capital; Chief Operating Officer Paul Mottola, a managing director at Entor0; and Chief Technology Officer Adam Richard, Entoro’s head of crypto.

Startup Exchange Sees Trillion Dollar Opportunity in Combining Digital and Traditional Assets

Macauley Peterson

<div id="highlights-block_61bcd389c7d0a" class="highlights">
 <ul>
 <li>&#8220;It’s incumbent upon us to give back…to help the world,&#8221; Bankman-Fried told CNN</li>
 <li>The FTX CEO expects a bright future for NFTs and is in favor of “comprehensive” regulation of the industry</li>
 </ul>
 
</div>



Sam Bankman-Fried (known as SBF), the founder and CEO of digital asset exchange FTX, discussed his charitable giving ambitions alongside his business goals in a wide-ranging <a href="https://twitter.com/jchatterleyCNN/status/1471571342722052103?s=20" target="_blank" rel="noreferrer noopener">interview with CNN</a> on Thursday.



Among the noteworthy comments from the FTX chief was that he expects fees for retail traders to come down as exchanges compete for business. FTX has enjoyed high-margin revenue, Bankman-Fried said, thanks to low operational overhead costs. The exchange has grown to a $25 billion dollar valuation in a just few years.



SBF expects growth in the NFT space as a whole, saying “I think we&#8217;re really in the early innings here,” referencing baseball, <a href="https://transcripts.cnn.com/show/fmjc/date/2021-12-10/segment/01" target="_blank" rel="noreferrer noopener">while agreeing</a> with <a href="https://cms.blockworks.co/steve-aoki-todd-mcfarlane-to-launch-nft-marketplace/" target="_blank" rel="noreferrer noopener">Steve Aoki</a> that many individual NFTs may collapse in value. 



Only “the best of them” will thrive, Bankman-Fried said. FTX <a href="https://cms.blockworks.co/ftx-launches-nft-marketplace/" target="_blank" rel="noreferrer noopener">launched its own</a> NFT (non-fungible token) marketplace in June.



FTX <a href="https://cms.blockworks.co/ftx-to-establish-substantial-presence-in-the-bahamas/" target="_blank" rel="noreferrer noopener">recently relocated</a> from Hong Kong to the Bahamas, and SBF praised the country for having passed a comprehensive crypto regulatory program, anticipating other jurisdictions to soon follow suit. 



He called the current state of regulations a “messy in-between period in most jurisdictions,” and said he would love to see further oversight of stablecoins, <a href="https://cms.blockworks.co/crypto-industry-will-move-offshore-if-congress-doesnt-act-executives-warn/" target="_blank" rel="noreferrer noopener">echoing his comments</a> during the recent House Financial Services Committee hearing in Washington, D.C.



<blockquote class="wp-block-quote">“There isn’t oversight for most [stablecoins] from many regulators to confirm that they are backed the way they say they are. And I think that’s one example of a place that would be really natural and helpful for the space for there to be a regime built out. There are not very many countries today, frankly, that have done so,” Bankman-Fried told CNN.</blockquote>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">&quot;When we launched a few years ago, it was very tailored towards the most sophisticated traders. We now have products that span the spectrum.&quot;<a href="https://twitter.com/SBF_FTX?ref_src=twsrc%5Etfw">@SBF_FTX</a> CEO <a href="https://twitter.com/FTX_Official?ref_src=twsrc%5Etfw">@FTX_Official</a> talks <a href="https://twitter.com/hashtag/crypto?src=hash&amp;ref_src=twsrc%5Etfw">#crypto</a> regulation, exchange consolidation, <a href="https://twitter.com/hashtag/Stablecoins?src=hash&amp;ref_src=twsrc%5Etfw">#Stablecoins</a> &amp; their <a href="https://twitter.com/hashtag/NFT?src=hash&amp;ref_src=twsrc%5Etfw">#NFT</a> ecosystem. Part 1 | <a href="https://twitter.com/firstmove?ref_src=twsrc%5Etfw">@firstmove</a> <a href="https://t.co/zri0nY0ubu">pic.twitter.com/zri0nY0ubu</a>&mdash; Julia Chatterley (@jchatterleyCNN) <a href="https://twitter.com/jchatterleyCNN/status/1471571342722052103?ref_src=twsrc%5Etfw">December 16, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



On the topic of wealth and taxes, the 29-year-old billionaire said he plans to donate almost all his income to good causes, including global poverty, animal welfare, pandemic preparedness and global warming-related charities.



<blockquote class="wp-block-quote">“It’s incumbent upon us to give back…and not just for our own sake and not just for our own legacy or our reputation, but it’s important to give back to help the world,” Bankman-Fried said.</blockquote>



He is also broadly in favor of progressive taxation, which levies more taxes on higher incomes, although he said a proposed <a href="https://www.wsj.com/articles/tax-on-billionaires-unrealized-gains-will-likely-be-in-budget-package-democrats-say-11635096384" target="_blank" rel="noreferrer noopener">tax on unrealized capital gains</a> could have adverse practical consequences. Proposed by Democrats in the US Senate, that tax would apply only to citizens with $1 billion in assets or more than $100 million in income in three consecutive years.



“Generally, I’m totally supportive of making sure the best-off pay their fair share, and maybe more,” he said.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">&quot;It&#39;s incumbent upon us to give back.&quot; Billionaire <a href="https://twitter.com/FTX_Official?ref_src=twsrc%5Etfw">@FTX_Official</a> CEO <a href="https://twitter.com/SBF_FTX?ref_src=twsrc%5Etfw">@SBF_FTX</a> share his thoughts on a proposed wealth tax in the US — and how he donates his riches. Part 2 | <a href="https://twitter.com/firstmove?ref_src=twsrc%5Etfw">@firstmove</a> <a href="https://t.co/CEHRzILqq0">pic.twitter.com/CEHRzILqq0</a>&mdash; Julia Chatterley (@jchatterleyCNN) <a href="https://twitter.com/jchatterleyCNN/status/1471572604284715011?ref_src=twsrc%5Etfw">December 16, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



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SBF Explains FTX’s Growth and Envisions Donating Wealth to Good Causes

Sam Reynolds

<div id="highlights-block_614cb0530771a" class="highlights">
 <ul>
 <li>FTX CEO Sam Bankman Fried confirmed that FTX’s headquarters is now in Nassau, Bahamas</li>
 <li>FTX is the first high-profile business to quit Hong Kong over quarantine rules  </li>
 </ul>
 
</div>



FTX no longer calls Hong Kong home.



The digital assets derivatives exchange has packed up and is now headquartered in Nassau, The Bahamas, citing friendlier regulation and no mandatory quarantine upon arrival in-country.



In an email to Blockworks, FTX CEO and Founder Sam Bankman-Fried said, “the proactive stance taken by The Bahamas and its regulatory bodies on cryptocurrencies” is one of the primary reasons FTX is moving to the island.&nbsp;



“FTX is regulated by the Securities Commission of The Bahamas under the DARE Act of 2020, one of the world&#8217;s few comprehensive regulations for crypto exchanges,” he said.



Earlier this week, Blockworks <a href="https://cms.blockworks.co/ftx-to-establish-substantial-presence-in-the-bahamas/" target="_blank" rel="noreferrer noopener">reported</a> that the exchange announced that Ryan Salame was the new CEO of FTX Digital Markets and would be responsible for leading their local initiatives in The Bahamas. In addition, FTX Digital Markets would be expanding its presence in the country to support transferred and local employees.



In contrast to The Bahamas, Hong Kong is taking a hostile approach to digital assets. Experts that Blockworks has previously spoken to have said that unclear regulations around custody and restrictions barring non accredited investors from accessing the local crypto market have cast a shadow on the industry in the City.&nbsp;



“What I can say is there are no clear regulations in Hong Kong for digital assets,” Alessio Quaglini, CEO of Hex Trust, told Blockworks in a <a href="https://cms.blockworks.co/custodian-rules-are-missing-link-for-hong-kongs-digital-assets-industry/" target="_blank" rel="noreferrer noopener">prior interview</a>. “What we have to live with is basically the regulation for custody of traditional assets.”



Vincent Chok, CEO of First Digital Trust, a registered public trust company headquartered in Hong Kong, also agrees with Quaglini’s sentiment, saying that there are too many inconsistencies with how Hong Kong’s different regulatory bodies treat crypto.



“Banking still treats crypto as something that they really don’t want to touch in Hong Kong over money laundering concerns,” Chok said, arguing that “there’s a definite bias going on.”



<h3 class="wp-block-heading">FTX first high-profile business to quit Hong Kong over quarantine rules &nbsp;</h3>



Currently Hong Kong makes those arriving in the territory from the United States, the UK, and most of Europe <a href="https://www.coronavirus.gov.hk/eng/inbound-travel.html" target="_blank" rel="noreferrer noopener">quarantine</a> for 21 days regardless of vaccination status.



Bankman-Fried has previously <a href="https://twitter.com/SBF_FTX/status/1405401907825307649?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1405401908668289030%7Ctwgr%5E%7Ctwcon%5Es2_&amp;ref_url=https%3A%2F%2Fcms.blockworks.co%2Fhong-kongs-digital-assets-double-standard%2F" target="_blank" rel="noreferrer noopener">complained</a> on Twitter that despite being fully vaccinated, he was delayed in June returning to Hong Kong because his Covid test result omitted his middle name (despite having the correct passport number).&nbsp;



Bankman-Fried isn’t alone in complaining about Hong Kong’s strict quarantine regime. In August, the European Chamber of Commerce <a href="https://www.ft.com/content/3c6bf58a-3291-4760-84a5-d9eb2cb5fd30" target="_blank" rel="noreferrer noopener">wrote a letter</a> to Hong Kong’s Chief Executive Carrie Lam that said the strict quarantine rules in place were threatening Hong Kong’s competitiveness and many of its members were considering an exodus from the city.



FTX’s exchange token seems to be reacting to news of the company’s move from Hong Kong positively, climbing 6.6% in the last 24 hours to $60.53 according to <a href="https://www.coingecko.com/en/coins/ftx-token" target="_blank" rel="noreferrer noopener">CoinGecko.</a>



<hr class="wp-block-separator"/>



Are you a UK or EU reader that can’t get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a>&nbsp;in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.



<hr class="wp-block-separator"/>

Bankman-Fried Says FTX No Longer Calls Hong Kong ‘Home’. Here’s Why

Ben Strack

<div id="highlights-block_6148f82c7f47e" class="highlights">
 <ul>
 <li>Ryan Salame, a former OTC head at Alameda Research, becomes CEO Bahama-based FTX Digital Markets and will lead business’s expansion</li>
 <li>50 FTX employees have requested to transfer to the location, and the company looks to hire Bahamians to serve in finance, marketing and software development roles</li>
 </ul>
 
</div>



A subsidiary of the owner and operator of crypto exchange FTX.COM is now registered by the Securities Commission of the Bahamas as a digital assets business, the company announced Monday, which will allow it to expand its platform in the region.&nbsp;



Bahamian-based FTX Digital Markets, which offers users access to FTX’s derivatives, options and volatility products, has been registered under the Digital Asset Registered Exchanges, or DARE, Act.



“We are committed to maintaining a close working relationship with local regulators so that together we can navigate putting a comprehensive regulatory framework in place to help promote the growth of this nascent asset class,” FTX Founder and CEO Sam Bankman-Fried said in a statement.



Ryan Salame has been appointed as the CEO of FTX Digital Markets and will be responsible for leading their local initiatives. Prior to taking on this new role, Salame had been working at Alameda Research since November 2019, according to <a href="https://www.linkedin.com/in/ryansalame/?originalSubdomain=bs" target="_blank" rel="noreferrer noopener">his LinkedIn profile</a>.&nbsp;



Alameda Research is a quantitative cryptocurrency trading firm and liquidity provider that manages more than $70 million in digital assets and trades roughly $1 billion per day across thousands of coins, altcoins and their derivatives. Based in Hong Kong, Salame was the firm’s head of OTC for the APAC region.&nbsp;



Before working at Alameda, Salame spent about two years on the crypto OTC trading desk at fintech firm Circle, most recently covering Asia liquidity.



<figure class="wp-block-image size-large is-resized"><img decoding="async" loading="lazy" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Bahamas-location-label-1024x668.jpg" alt="" class="wp-image-8287" width="840" height="547" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Bahamas-location-label-1024x668.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Bahamas-location-label-1024x668.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Bahamas-location-label-1024x668.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Bahamas-location-label-1024x668.jpg?w=394 394w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Bahamas-location-label-1024x668.jpg?w=400 400w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Bahamas-location-label-1024x668.jpg?w=336 336w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Bahamas-location-label-1024x668.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Bahamas-location-label-1024x668.jpg?w=1392 1392w" sizes="(max-width: 840px) 100vw, 840px" /><figcaption>The Bahamas consists of some 700 islands, cays, and islets in the Atlantic Ocean</figcaption></figure>



FTX Digital Markets will be building out its office presence in the Bahamas to support the 50 FTX employees who have requested to transfer to that location and the new employees they plan to hire locally before the end of the year, a spokesperson told Blockworks. Plans are in place to hire Bahamians to serve in finance, marketing and software development roles.



The FTX affiliate has so far donated $120,000 to the local community with plans to donate $1 million over the next 12 months, the representative added. The initial donations were mainly focused on education, but the company is exploring climate and other charitable opportunities.&nbsp;



“The relationship we have fostered with local regulators culminating with us being authorized under the framework offered through the DARE Act, gives me confidence that we’ll be able to work closely with regulators to make sure our offerings are compliant in multiple jurisdictions,” Salame said in a statement.



The firm did not immediately comment on specific initiatives Salame would be leading.&nbsp;



The push to expand its footprint in the Bahamas comes as the company has been looking to build out its offerings in the US.&nbsp;FTX <a href="https://cms.blockworks.co/ftx-closes-900m-series-b-round-valuing-exchange-at-18b/" target="_blank" rel="noreferrer noopener">raised $900 million</a> for its Series B round in July, valuing the company at $18 billion, and it <a href="https://cms.blockworks.co/ftx-us-brings-crypto-derivatives-to-users-with-ledgerx-acquisition/" target="_blank" rel="noreferrer noopener">announced late last month</a> that it is set to acquire the parent company of digital currency futures and options exchange <a href="https://www.ledgerx.com/" target="_blank" rel="noreferrer noopener">LedgerX</a> as a way to bring crypto derivatives to its US user base.



<hr class="wp-block-separator"/>



<meta charset="utf-8">Are you a UK or EU reader that can’t get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a>&nbsp;in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.



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