FTX lawyer calls this case ‘a different sort of animal’ in first bankruptcy hearing

Published

3 years ago

November 22, 2022

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Lawyers for collapsed crypto exchange FTX said on Tuesday, in the company’s first bankruptcy hearing, that regulators from the Bahamas, where FTX was headquartered, have agreed to consolidate proceedings in Delaware.

FTX’s lawyers, who were brought in by new leadership to handle restructuring, filed an emergency motion last week to secure the move to the U.S. The hearing on Tuesday was the initial step in the resolution of the largest cryptocurrency bankruptcy on record.

“What we are dealing with is a different sort of animal,” said FTX counsel James Bromley. “Unfortunately, the FTX debtors were not particularly well run, and that is an understatement.”

Regarding FTX’s founder, this was an organization that was “effectively run as a personal fiefdom of Sam Bankman-Fried,” an FTX attorney told the court.

FTX lawyers confirmed earlier reports that the Southern District of New York’s Cyber Crimes unit has begun an investigation into the matter. FTX lawyers have also made reference to cyberattacks, suggesting there were multiple attacks beyond the $477 million hack that occurred shortly after the company entered bankruptcy on Nov. 11. In that attack, hackers extracted ether out of FTX wallets.

The central challenge for the new team is “working to bring order to disorder,” Bromley told the court. After introducing his fellow counsel, Bromley dove into what FTX has been doing to understand the complex morass of data and finances left behind by FTX and Bankman-Fried, who was replaced by restructuring expert John Ray III.

Bankman-Fried exercised a level of control over the business that “none of us have ever seen,” Bromley said, referring to the bankruptcy experts and attorneys the company has employed as part of the restucturing process.

FTX had been valued by private investors at $32 billion earlier this year, and Bankman-Fried was making himself out to be an industry savior during the crypto winter.

“The FTX situation is the latest and the largest failure in this space,” Bromley said. “There was effectively a run on the bank, both with respect to the international exchange […] as well as the U.S. exchange. At the same time that the run on the bank was occurring, there was a leadership crisis […] The FTX companies were controlled by a very small group of people, led by Mr. Sam-Bankman-Fried. During the run on the bank, Mr. Fried’s leadership frayed, and that led to resignations.”

FTX has just begun to implement “standard” risk and data management practices, he said. As part of the process, lawyers had earlier to approve roughly $1 million in salary expenses for existing FTX employees.

The process is designed to get as much as possible for creditors, Bromley said.

“It is essential that we first maximize the value of the assets we have, whether that means selling assets, selling businesses or restructuring businesses,” he said. “All of that is on the table.”

FTX customers had a global presence, but many were based in tax havens. The largest geographic areas represented included:

Cayman Islands — 22% of registered customers.
U.S. Virgin Islands — 11% of registered customers.
China — 8% of registered customers.

“We will be before you quite quickly with an attempt to sell certain of the business that we understand […] are self-sufficient and robust [with] interest from others,” Bromley added.

FTX lawyers said they’ve established four silos for the company’s assets and various entities. They are:

The WRS (West Realm Shires) silo, which controls and encompasses U.S. holdings.
The Alameda silo, which includes Alameda Research, Bankman Fried’s now defunct hedge fund.
The venture silo, which invested in crypto companies and startups.
The dot-com silo, which encompasses the international business, the bulk of FTX’s deposits.

Bromley said the asset recovery and protection efforts encompass not just crypto assets and currency, but “information.” The company has also brought on independent directors for the first time ever.

“A substantial amount of assets have either been stolen or missing,” Bromley said. “Additionally, “substantial funds appear to have been transfered from other silos to Alameda.”

A key aspect of the FTX crisis is around Alameda and the FTT token, a coin issued by FTX. Lawyers have walked through the history of FTX and affiliated companies, pointing at the creation of the FTT token in April 2019 and the foundation of the Alameda entities in November 2017.

Investments were made in the crypto and technology venture space, Bromley said, but almost $300 million was also spent on real estate in the Bahamas. That number is higher than previously reported, and Bromley said most of those purchases were home and vacation properties for senior executives.

Employees have left the company in droves. As of October 2022, the main FTX parent company had 330 employees around the world, with 127 in the U.S. Including the Australian businesses and FTX Digital Markets which had 190 employees, the global headcount was 520.

The best guess for the headcount now, according to FTX attorneys, is “around 260.”

This is a developing story. Please check back for updates.

Technology

Tether reportedly seeks lofty $500 billion valuation in capital raise

Published

4 hours ago

September 23, 2025

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Tether reportedly seeks lofty 0 billion valuation in capital raise

Venezuelan Bolivar and U.S. Dollar banknotes and representations of cryptocurrency Tether are seen in this illustration taken Sept. 8, 2025.

Dado Ruvic | Array

Tether, the issuer of the largest stablecoin, is planning to raise as much as $20 billion in a deal that could put the crypto company’s value on par with OpenAI, according to a report from Bloomberg News.

The crypto company is looking to raise between $15 billion and $20 billion in exchange for a roughly 3% stake through a private placement, the report said, citing two individuals familiar with the matter. The transaction would involve new equity rather than existing investors selling their stakes, the people told the news service.

The report said that one person close to the matter warned that the talks are in an early stage, which means that the eventual details, including the size of the offering, could change.

However, the deal could ultimately value Tether at around $500 billion, according to the report. That would mean the crypto giant’s valuation would rival some of the world’s biggest private companies, including SpaceX and OpenAI. OpenAI’s fundraising round earlier this year valued the tech company at $300 billion.

Tether, which was once accused of being a criminal’s “go-to cryptocurrency,” has been furthering its plans to return to the U.S. in recent months, given President Donald Trump’s pro-crypto stance. The company earlier this month named a CEO for its U.S. business and launched a new token for businesses and institutions in the U.S. called USAT, which will be regulated in the U.S. under the GENIUS Act.

Stablecoin USD Tether (USDT) is pegged to the U.S. dollar with a market cap that recently surpassed $172 billion. In second place is Tether rival Circle’s USDC stablecoin, which is worth about $74 billion.

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Technology

Micron beats on earnings as company sales rise 46% on AI boom

Published

5 hours ago

September 23, 2025

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Micron beats on earnings as company sales rise 46% on AI boom

A person walks by a sign for Micron Technology headquarters in San Jose, California, on June 25, 2025.

Justin Sullivan | Getty Images

Micron reported better-than-expected earnings and revenue on Tuesday as well as a robust forecast for the current quarter.

The stock rose in extended trading.

Here’s how the company did in comparison with the LSEG consensus:

Earnings per share: $3.03, adjusted, vs. $2.86 expected
Revenue: $11.32 billion vs. $11.22 billion expected

Micron said revenue in the current period, its fiscal first quarter, will be about $12.5 billion, versus the $11.94 billion average analyst estimate per LSEG.

The company said it had $3.2 billion, or $2.83 per share in net income, versus $887 million, or 79 cents in the year-ago period.

Micron shares have nearly doubled so far in 2025. The company makes memory and storage, which are important components for computers. Micron has been one of the winners of the artificial intelligence boom. That’s because high-end AI chips like those made by Nvidia require increasing amounts of high-tech memory called high-bandwidth memory, which Micron makes.

“As the only U.S.-based memory manufacturer, Micron is uniquely positioned to capitalize on the AI opportunity ahead,” Micron CEO Sanjay Mehrotra said in a statement.

Overall company revenue rose 46% on a year-over-year basis during the quarter.

Micron’s largest unit, which sells memory for cloud providers, reported $4.54 billion in sales during the quarter, more than tripling on a year-over-year basis.

However, the company’s core data center business unit saw sales decline 22% on an annual basis to $1.57 billion in revenue.

WATCH: AI-led bull market set to continue, says Wells Fargo’s Ohsung Kwon

Technology

YouTube to allow creators banned for Covid-19, election misinformation to apply for reinstatement

Published

7 hours ago

September 23, 2025

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YouTube to allow creators banned for Covid-19, election misinformation to apply for reinstatement

Jaque Silva | Nurphoto | Getty Images

Google-owned YouTube on Tuesday said it will soon allow previously banned accounts to apply for reinstatement, rolling back a policy that had treated violations as permanent.

The change applies to channels removed for posting Covid-19 or election-related misinformation, according to a letter from Alphabet lawyer Daniel Donovan to House Judiciary Chair Jim Jordan, R-Ohio. Previously, those types of offenses carried lifetime bans.

“Today, YouTube’s Community Guidelines allow for a wider range of content regarding Covid and elections integrity,” Donovan wrote.

YouTube wrote on X that it will be a limited pilot project open to a subset of creators as well as channels that were terminated under policies the company has since retired. YouTube also said its new reinstatement program will launch soon.

Among channels previously banned under those rules were some associated with Deputy FBI Director Dan Bongino, former Trump chief strategist Steve Bannon and Health and Human Services Secretary Robert F. Kennedy Jr. It’s not yet clear whether those channels will be reinstated.

This move follows mounting Republican pressure on tech companies to reverse Biden-era speech policies on vaccine and political misinformation. In March, Rep. Jordan subpoenaed Alphabet CEO Sundar Pichai, alleging YouTube was a “direct participant in the federal government’s censorship regime.”

In 2021, YouTube said it would remove content that spread misinformation about all approved vaccines.

Donovan wrote that during the pandemic, senior Biden administration officials pressed the company to remove certain Covid-related videos that did not technically violate YouTube’s policies.

In the letter, Donovan said this pressure was “unacceptable and wrong.”

YouTube ended its stand-alone Covid misinformation rules in December 2024, according to Donovan’s letter.

YouTube “will not empower third-party fact-checkers” to moderate content and will continue to enable “free expression” on the platform, Donovan wrote. While Donovan writes that YouTube has not used fact-checkers, the platform has produced programs that are meant to label context on videos.

Similarly, Meta said in January that it had eliminated its fact-checking program on Facebook and Instagram.

YouTube has a feature that will display information panels with links to independent fact checks under videos. The feature says it provides more context on videos across YouTube with information from third-party sources.

In 2017, Google launched a fact-checking tool that would display labels on search and news results.