FTX has $222M in Bahamas real estate, 1,300 tokens: shareholder presentation
FTX has released its presentation materials for the shareholder meeting taking place Sept. 11-12. The unrestricted portion provides a clear overview of the company’s current state and its slow march toward settlement.
The shareholders will begin their day with an account of the claims against the cryptocurrency exchange. Over 2,300 non-customer claims have been filed against it, including those from Genesis, Celsius and Voyager. The claims are worth $65 billion, although those from FTX Digital Markets are “assumed to be invalid/redundant” and the Internal Revenue Service’s claim – the largest at $43.5 billion – is assumed to be subordinated.
Based on information from August, 36,075 customer claims, worth $16 billion, have been filed against FTX and FTX.US, and 10% of those have been agreed on.
FTX assets including digital assets, cash, brokerage investments, its venture portfolio, tokens and real estate top $7 billion. FTX owns 38 properties in the Bahamas worth $222 million at book value.
Related: Binance’s Richard Teng denies FTX comparisons: ‘We welcome the scrutiny’
The company has monetized $588 million in avoidance claims so far. All that money has come from investments made by FTX, and it is looking at another $16.6 billion in identified potential avoidance claims from investments. In addition, it has identified over 50 potential actions against “insiders,” including Sam Bankman-Fried, Nishad Singh, Gary Wang, Caroline Ellison and 46 others, for a total of $2.2 billion.
FTX may claw back $86.6 million in political and charitable donations and $190.3 million through 884-plus potential actions against vendors as well.
FTX has identified about $833 million in Bitcoin (BTC) and Ether (ETH) assets, not counting $487 in BTC- and ETH-denominated securities. In addition, the company has holdings of over 1,300 other tokens. The largest of those are $362 million in Serum (SRM), $309 million in Maps (MAPS) and $164 million in Oxygen (OXY).
Its venture portfolio was worth about $4.5 billion across 438 investments at the time of its bankruptcy. Of that sum, $3.8 billion has been recovered. Equity investments in 202 firms make up the bulk of the remaining funded investments, with the largest chunk being $1.2 billion in crypto miner Genesis Digital, followed by $500 million in AI firm Anthropic and $110 million in Voyager Digital.
Preference Exposure in FTX presentation
Methodology
Withdrawals: Valued at current pricing (31st Aug)
Deposits: Transaction timeOwed to FTX estate
15-Day: $11.2bn (intl) + $2.2bn (US)
90-Day: $21.4 (intl)+$3.6bn (US) pic.twitter.com/wlsAr8MP6C— Sunil (FTX Creditor Champion) (@sunil_trades) September 11, 2023
More than 75 potential bidders to relaunch FTX and/or FTX.US have been contacted, according to the presentation. They have until Sept. 24 to place bids. Confirmation of the recovery plan is targeted for the second quarter of 2024. There are reports that FTX may liquidate a significant portion of its crypto holdings in the near future.
Those privy to the restricted portion of the presentation will also find out about its current tax status, receive an update on United States Department of Justice restitution and outbound litigation, among other sensitive matters.
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Brandon Ferrick, general counsel at Douro Labs, said that the Securities and Exchange Commission’s (SEC) openness to public input on crypto policy and their roundtable discussions are positive signs that the crypto industry is not currently experiencing regulatory capture.
In an interview with Cointelegraph, Ferrick identified signs of regulatory capture including, a public-to-private sector revolving door of employees, the same roster of attendees at regulatory events, and special treatment given to certain crypto projects. However, Ferrick added:
“The reason why I am not worried today is that a lot of what you’re seeing from the regulatory side, like the SEC, for example, is totally open, public, and there are available opportunities to have conversations with the regulators about changing or thinking about the regulatory structures.”
“[The SEC] has a public portal where you can just submit written commentary on your thoughts for the crypto regulatory environment, and you can schedule meetings with them,” the attorney continued.
As the crypto industry becomes more integrated with the traditional financial system and engages state regulators more, some analysts and executives are worried that the industry is experiencing regulatory capture that will skew incentives and politicize the burgeoning crypto sector.
Related: SEC staff gives guidance on how securities laws could apply to crypto
SEC hosts several roundtable discussions on crypto policy
The SEC has hosted several crypto roundtable discussions and panels, with more slated in the coming months — a sharp contrast from the agency’s regulation-by-enforcement approach under former SEC chairman Gary Gensler.
On March 21, the regulatory agency hosted its first crypto roundtable, which featured crypto industry executives, SEC officials, and even opponents of the crypto industry.
Former SEC official John Reed Stark was highly critical of the industry and opposed comprehensive regulatory reform, arguing that digital assets must comply with existing securities laws.
The SEC’s April 11 roundtable focused on trading rules and included a different set of panelists, including representatives from Uniswap and Coinbase.
The next SEC panel will occur on April 25 and focus on establishing guidelines for crypto custodians and other firms holding crypto on behalf of customers.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
Whales and institutions are increasing their Bitcoin holdings ahead of Easter, as market analysts predict a weekend with less volatility after two weeks of heightened volatility driven by escalating global trade tensions.
London-based investment firm Abraxas Capital acquired 2,949 Bitcoin (BTC) worth more than $250 million during the four days leading up to April 19.
In the latest transaction, the firm bought over $45 million worth of Bitcoin from Binance on April 18, according to crypto intelligence firm Lookonchain, citing Arkham Intelligence data.
The investment came days after Michael Saylor’s Strategy bought $285 million worth of Bitcoin at an average price of $82,618 per BTC, as the world’s largest corporate Bitcoin holders signal continued confidence in Bitcoin, amid global tariff uncertainty.
Large Bitcoin investors, or whales, continue accumulating, absorbing over 300% of Bitcoin’s yearly issuance as exchanges continue losing coins at a historic pace, Cointelegraph reported on April 18.
Related: Spar supermarket in Switzerland starts accepting Bitcoin payments
Crypto analysts eye quiet Easter weekend after weeks of turmoil
Despite continued accumulation from whales and institutions, volatility concerns were raised by significant movements from the medium-term Bitcoin cohort, which holds coins for an average of three to six months.
Over 170,000 Bitcoin entered circulation from the medium-term cohort, a development that may signal “imminent” crypto market volatility, according to pseudonymous CryptoQuant analyst Mignolet.
“The effect of this metric on LTF moves is overstated as large onchain movement of coins hardly ever affects weekend price action since it’s not on liquid markets or CEX markets,” analysts at Bitfinex exchange told Cointelegraph, adding:
“It is important to note that funding rates remain relatively flat currently. Moreover, US markets are closed as we have a long weekend for Easter, so volatility could be suppressed barring headlines from the White House.”
Related: Crypto, DeFi may widen wealth gap, destabilize finance: BIS report
Marcin Kazmierczak, chief operating officer of RedStone Oracles, added that the recent movements may be operational transfers, not necessarily signs of imminent selling pressure.
Still, concerns over weekend volatility have been amplified over the past two weeks after the Mantra (OM) token’s price collapsed by over 90% on Sunday, April 13, from roughly $6.30 to below $0.50, triggering market manipulation allegations and highlighting “critical” liquidity issues in the industry.
Two weeks ago, on April 6, Bitcoin fell below $75,000 on Sunday, as investor concerns spread from a record-breaking $5 trillion sell-off from the S&P 500, its largest on record.
The correction was caused by Bitcoin’s 24/7 trading availability, which made it the only large liquid asset available for de-risking on Sunday, Blockstream CEO Adam Back told Cointelegraph.
“On a weekend, there’s not much volume. So you have a worse risk of rapid sort of flash crashes or flash dips that get filled in again,” he said.
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The growing adoption of cryptocurrencies may pose risks to the traditional financial system and exacerbate wealth inequality, according to the Bank for International Settlements (BIS).
In an April 15 report, the BIS warned that the number of investors and amount of capital in crypto and decentralized finance (DeFi) have “reached a critical mass,” with investor protection becoming a “significant concern for regulators.”
The size of the crypto market signals that authorities should be worried about the “stability of crypto over and above the role it may have for TradFi and the real economy,” the report states, highlighting the role of stablecoins, which the BIS said have “become the means through which participants transfer value within crypto.”
The report calls for targeted stablecoin regulation on stability and reserve asset requirements that will guarantee the redemption of stablecoins for US dollars during “stressed market conditions.”
Related: Spar supermarket in Switzerland starts accepting Bitcoin payments
The report comes two weeks after the US House Financial Services Committee passed the Stablecoin Transparency and Accountability for a Better Ledger Economy, or STABLE Act, with a 32–17 vote on April 2.
The STABLE Act aims to create a clear regulatory framework for dollar-denominated payment stablecoins, emphasizing transparency and consumer protection.
On March 13, the GENIUS Act, short for Guiding and Establishing National Innovation for US Stablecoins, passed the Senate Banking Committee by a vote of 18–6. The act aims to establish collateralization guidelines and require full compliance with Anti-Money Laundering laws from stablecoin issuers.
Related: $400M Web3 investment fund ABCDE halts new investments, fundraising
Crypto may exacerbate wealth gap
The BIS also raised concerns about how crypto markets may worsen income inequality by enabling larger investors to capitalize on the emotions of less sophisticated retail participants, as seen during the FTX collapse in 2022.
“As prices tumbled in 2022, users actually traded more,” the BIS report noted. “Most disturbingly, large bitcoin holders (“whales”) were selling as ordinary retail investors (“krill”) were buying.” It added:
“This implies that the crypto market, which is often presented as an opportunity for inclusive growth and financial stability, can be a means for redistributing wealth from the poorer to the wealthier.”
The report concludes that DeFi and TradFi have similar underlying economic drivers, but DeFi’s “distinctive features,” like “smart contract and composability,” present new challenges that need proactive regulatory interventions to “safeguard financial stability, while fostering innovation.”
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