Fintech
As Sam Bankman-Fried awaits prison sentence, FTX customers await a surprise: Full repayment
As Sam Bankman-Fried prepares to face sentencing next month for his criminal fraud conviction tied to the epic collapse of FTX in 2022, former customers of the crypto exchange have reasons to believe they could actually recoup their money.
Bankman-Fried, who could spend the rest of his life behind bars, was found guilty in November on seven criminal counts after roughly $10 billion in customer funds from his company went missing. Some of that money went to pay for Bankman-Fried’s lavish lifestyle, but much of it went towards other investments that have, of late, appreciated dramatically in value.
Lawyers representing the bankruptcy estate of FTX told a judge in Delaware last week that they expect to fully repay customers and creditors with legitimate claims. Bankruptcy attorney Andrew Dietderich, who works with FTX’s new leadership team, said “there is still a great amount of work and risk” ahead in getting all the money back to clients, but that the team has a “strategy to achieve it.”
It’s a welcome development for the many thousands of customers (reportedly up to a million) who collectively lost billions of dollars in FTX’s collapse 15 months ago, when the crypto exchange spiraled into bankruptcy in a matter of days. Given the lightly regulated and unsecured nature of FTX — and the crypto industry at large — those clients faced the real possibility that the vast majority of their money had evaporated. Plenty of failed hedge funds and lenders lost virtually everything during the 2022 crypto winter.
Bankman-Fried never believed his company’s situation was that dire.
Even as regulators and federal prosecutors unearthed evidence showing that the 31-year-old entrepreneur and his top lieutenants had been pilfering billions of dollars from customer wallets for years, Bankman-Fried insisted that all the money was still somehow accessible.
“FTX US remains fully solvent,” Bankman-Fried wrote in a Substack post on Jan. 12, 2023, while he was under house arrest at his parents’ home in Palo Alto, California. He said the exchange “should be able to return all customers’ funds.”
In some ways, his narrative appears to be proving true.
For months, FTX’s new CEO, John Ray III, and his team of restructuring advisors have been clawing back cash, luxury property, and crypto, as well as tracking down missing assets. They’ve already collected more than $7 billion, and that doesn’t include valuables like $26 million in gifts and property to Bankman-Fried’s parents, or the $700 million handed over to K5 Global and founder Michael Kives, who invested FTX cash in companies like SpaceX. Some of those investments have seen a precipitous rise in value.
FTX had been negotiating with bidders about a potential reboot of the company, but those efforts were scrapped last month.
Braden Perry, who was once a senior trial lawyer for the Commodity Futures Trading Commission, FTX’s only official U.S. regulator, told CNBC that the decision to repay users in full came after ”the abandonment of efforts to restart the FTX crypto exchange,” in favor of “a focus on liquidating assets to make customers whole.”
Getting actual money back in the hands of customers still remains a challenge. While a lot of the value has been recouped and more is to come, divvying up large amounts of cash is a complex process in bankruptcies, particularly when so much of the money is in non-traditional and illiquid assets.
Even Ray was doubtful at the beginning of the process, noting in late 2022 that, “At the end of the day, we’re not going to be able to recover all the losses here.”
‘Sam coins’ soar
What Ray wasn’t banking on was a huge market rebound. When he made those remarks, crypto was mired in a bear market, with bitcoin trading at around $16,000. It’s now above $47,000.
In September, the bankruptcy team released a status report showing that FTX had $3.4 billion worth of digital assets, with over $1.1 billion coming from its Solana investment.
Solana fits into a category of so-called “Sam coins,” a group that also includes Serum, a token created and promoted by FTX and sister hedge fund Alameda Research. After the dust settled from FTX’s bankruptcy, Solana saw a huge run-up in its price, and it continued to rally after the September report. Since the end of that month, it’s spiked fivefold.
Meanwhile, FTX’s bitcoin stash, which was worth $560 million at the time of the September report, is today valued north of $1 billion.
Bankman-Fried’s investments weren’t limited to crypto. He also used client money to back startups like Anthropic, the artificial intelligence company founded by ex-OpenAI employees. FTX invested $500 million in Anthropic in 2021, before the generative AI boom. Anthropic’s valuation hit $18 billion in December 2023, which would value FTX’s roughly 8% stake at about $1.4 billion.
During Bankman-Fried’s criminal trial in New York, Judge Lewis Kaplan denied the defense’s request that it be permitted to say that FTX’s investment in Anthropic was a smart bet. The bankruptcy estate of FTX has been looking to sell its Anthropic stake, according to a court filing this month.
In his biography on Bankman-Fried titled “Going Infinite,” Michael Lewis said he was told by an investor interested in bidding for the venture portfolio that “if it was sold intelligently, it should go for at least $2 billion.” Lewis, who published his book late last year, wrote that, based on his back-of-the-envelope math, the $7.3 billion that Ray’s team had come up with didn’t include Serum, some large clawbacks and other venture investments that had appreciated in value.
For FTX customers, being made whole, according to a judge’s ruling, means getting the cash equivalent of what their crypto was worth in November 2022. In other words, they’re not seeing any of the upside of FTX’s investments or being given virtual coins that would allow them to cash out at higher valuations.
Still, some investors have found a way to participate in the FTX’s ongoing odyssey. The market for FTX IOUs lit up last year as it became clear that the bankruptcy estate was cobbling together a lucrative portfolio. One financial firm that had lost around $100 million initially sold its FTX debt for 6 cents on the dollar in a new secondary market out of concern that he may never get a better deal. As of December, those claims were going for more than 70 cents on the dollar.
If customers are eventually made whole, that could play a big role in Bankman-Fried’s appeal, likely following his sentencing, which is set to take place in Brooklyn on March 28. Perry said it could also affect how the judge handles sentencing in the first place.
“Under the federal sentencing guidelines, and even assuming no monetary loss, SBF still faces at least 70 months in prison based on his base level offense, number of victims, sophisticated means, and leadership role,” Perry said.
The massive losses that were originally expected would suggest 30 to years to life, Perry added.
Renato Mariotti, a former prosecutor in the U.S. Justice Department’s Securities and Commodities Fraud Section, told CNBC that judges typically consider the amount of restitution paid to victims at sentencing.
“If the victim is made whole, that is a big plus for the defendant,” said Mariotti. He noted, however, that the extent of the fraud coupled with Bankman-Fried’s false testimony and violation of bond conditions could limit the reduction.
“I usually advise clients to pay restitution before sentencing if at all possible,” Mariotti said.
Source: cnbc.com
The post As Sam Bankman-Fried awaits prison sentence, FTX customers await a surprise: Full repayment appeared first on HIPTHER Alerts.
Modern brands stake on influencer marketing, with 76% of users making a purchase after seeing a product on social media.The cryptocurrency industry is no exception to this trend. However, promoting crypto products through influencer marketing can be particularly challenging. Crypto influencers pose a significant risk to a brand’s reputation and ROI due to rampant scams. Approximately 80% of channels provide fake statistics, including followers counts and engagement metrics. Additionally, this niche is characterized by high CPMs, which can increase the risk of financial loss for brands.
In this article Nadia Bubennnikova, Head of agency Famesters, will explore the most important things to look for in crypto channels to find the perfect match for influencer marketing collaborations.
-
Comments
There are several levels related to this point.
LEVEL 1
Analyze approximately 10 of the channel’s latest videos, looking through the comments to ensure they are not purchased from dubious sources. For example, such comments as “Yes sir, great video!”; “Thanks!”; “Love you man!”; “Quality content”, and others most certainly are bot-generated and should be avoided.
Just to compare:
LEVEL 2
Don’t rush to conclude that you’ve discovered the perfect crypto channel just because you’ve come across some logical comments that align with the video’s topic. This may seem controversial, but it’s important to dive deeper. When you encounter a channel with logical comments, ensure that they are unique and not duplicated under the description box. Some creators are smarter than just buying comments from the first link that Google shows you when you search “buy YouTube comments”. They generate topics, provide multiple examples, or upload lists of examples, all produced by AI. You can either manually review the comments or use a script to parse all the YouTube comments into an Excel file. Then, add a formula to highlight any duplicates.
LEVEL 3
It is also a must to check the names of the profiles that leave the comments: most of the bot-generated comments are easy to track: they will all have the usernames made of random symbols and numbers, random first and last name combinations, “Habibi”, etc. No profile pictures on all comments is also a red flag.
LEVEL 4
Another important factor to consider when assessing comment authenticity is the posting date. If all the comments were posted on the same day, it’s likely that the traffic was purchased.
2. Average views number per video
This is indeed one of the key metrics to consider when selecting an influencer for collaboration, regardless of the product type. What specific factors should we focus on?
First & foremost: the views dynamics on the channel. The most desirable type of YouTube channel in terms of views is one that maintains stable viewership across all of its videos. This stability serves as proof of an active and loyal audience genuinely interested in the creator’s content, unlike channels where views vary significantly from one video to another.
Many unauthentic crypto channels not only buy YouTube comments but also invest in increasing video views to create the impression of stability. So, what exactly should we look at in terms of views? Firstly, calculate the average number of views based on the ten latest videos. Then, compare this figure to the views of the most recent videos posted within the past week. If you notice that these new videos have nearly the same number of views as those posted a month or two ago, it’s a clear red flag. Typically, a YouTube channel experiences lower views on new videos, with the number increasing organically each day as the audience engages with the content. If you see a video posted just three days ago already garnering 30k views, matching the total views of older videos, it’s a sign of fraudulent traffic purchased to create the illusion of view stability.
3. Influencer’s channel statistics
The primary statistics of interest are region and demographic split, and sometimes the device types of the viewers.
LEVEL 1
When reviewing the shared statistics, the first step is to request a video screencast instead of a simple screenshot. This is because it takes more time to organically edit a video than a screenshot, making it harder to manipulate the statistics. If the creator refuses, step two (if only screenshots are provided) is to download them and check the file’s properties on your computer. Look for details such as whether it was created with Adobe Photoshop or the color profile, typically Adobe RGB, to determine if the screenshot has been edited.
LEVEL 2
After confirming the authenticity of the stats screenshot, it’s crucial to analyze the data. For instance, if you’re examining a channel conducted in Spanish with all videos filmed in the same language, it would raise concerns to find a significant audience from countries like India or Turkey. This discrepancy, where the audience doesn’t align with regions known for speaking the language, is a red flag.
If we’re considering an English-language crypto channel, it typically suggests an international audience, as English’s global use for quality educational content on niche topics like crypto. However, certain considerations apply. For instance, if an English-speaking channel shows a significant percentage of Polish viewers (15% to 30%) without any mention of the Polish language, it could indicate fake followers and views. However, if the channel’s creator is Polish, occasionally posts videos in Polish alongside English, and receives Polish comments, it’s important not to rush to conclusions.
Example of statistics
Wrapping up
These are the main factors to consider when selecting an influencer to promote your crypto product. Once you’ve launched the campaign, there are also some markers to show which creators did bring the authentic traffic and which used some tools to create the illusion of an active and engaged audience. While this may seem obvious, it’s still worth mentioning. After the video is posted, allow 5-7 days for it to accumulate a basic number of views, then check performance metrics such as views, clicks, click-through rate (CTR), signups, and conversion rate (CR) from clicks to signups.
If you overlooked some red flags when selecting crypto channels for your launch, you might find the following outcomes: channels with high views numbers and high CTRs, demonstrating the real interest of the audience, yet with remarkably low conversion rates. In the worst-case scenario, you might witness thousands of clicks resulting in zero to just a few signups. While this might suggest technical issues in other industries, in crypto campaigns it indicates that the creator engaged in the campaign not only bought fake views and comments but also link clicks. And this happens more often than you may realize.
Summing up, choosing the right crypto creator to promote your product is indeed a tricky job that requires a lot of resources to be put into the search process.
Author
Nadia Bubennikova, Head of agency at Famesters
The BIS, along with seven leading central banks and a cohort of private financial firms, has embarked on an ambitious venture known as Project Agorá.
Named after the Greek word for “marketplace,” this initiative stands at the forefront of exploring the potential of tokenisation to significantly enhance the operational efficiency of the monetary system worldwide.
Central to this pioneering project are the Bank of France (on behalf of the Eurosystem), the Bank of Japan, the Bank of Korea, the Bank of Mexico, the Swiss National Bank, the Bank of England, and the Federal Reserve Bank of New York. These institutions have joined forces under the banner of Project Agorá, in partnership with an extensive assembly of private financial entities convened by the Institute of International Finance (IIF).
At the heart of Project Agorá is the pursuit of integrating tokenised commercial bank deposits with tokenised wholesale central bank money within a unified, public-private programmable financial platform. By harnessing the advanced capabilities of smart contracts and programmability, the project aspires to unlock new transactional possibilities that were previously infeasible or impractical, thereby fostering novel opportunities that could benefit businesses and consumers alike.
The collaborative effort seeks to address and surmount a variety of structural inefficiencies that currently plague cross-border payments. These challenges include disparate legal, regulatory, and technical standards; varying operating hours and time zones; and the heightened complexity associated with conducting financial integrity checks (such as anti-money laundering and customer verification procedures), which are often redundantly executed across multiple stages of a single transaction due to the involvement of several intermediaries.
As a beacon of experimental and exploratory projects, the BIS Innovation Hub is committed to delivering public goods to the global central banking community through initiatives like Project Agorá. In line with this mission, the BIS will soon issue a call for expressions of interest from private financial institutions eager to contribute to this ground-breaking project. The IIF will facilitate the involvement of private sector participants, extending an invitation to regulated financial institutions representing each of the seven aforementioned currencies to partake in this transformative endeavour.
Source: fintech.globa
The post Central banks and the FinTech sector unite to change global payments space appeared first on HIPTHER Alerts.
TD Bank has inked a multi-year deal with Google Cloud as it looks to streamline the development and deployment of new products and services.
The deal will see the Canadian banking group integrate the vendor’s cloud services into a wider portion of its technology solutions portfolio, a move which TD expects will enable it “to respond quickly to changing customer expectations by rolling out new features, updates, or entirely new financial products at an accelerated pace”.
This marks an expansion of the already established relationship between TD Bank and Google Cloud after the group previously adopted the vendor’s Google Kubernetes Engine (GKE) for TD Securities Automated Trading (TDSAT), the Chicago-based subsidiary of its investment banking unit, TD Securities.
TDSAT uses GKE for process automation and quantitative modelling across fixed income markets, resulting in the development of a “data-driven research platform” capable of processing large research workloads in trading.
Dan Bosman, SVP and CIO of TD Securities, claims the infrastructure has so far supported TDSAT with “compute-intensive quantitative analysis” while expanding the subsidiary’s “trading volumes and portfolio size”.
TD’s new partnership with Google Cloud will see the group attempt to replicate the same level of success across its entire portfolio.
Source: fintechfutures.com
The post TD Bank inks multi-year strategic partnership with Google Cloud appeared first on HIPTHER Alerts.
-
Latest News4 days ago
Letter from Gatemore Capital Management LLP to Elementis PLC
-
Latest News5 days ago
Shanghai Electric Releases ESG Report, Highlighting Sustainable Development Achievements in 2023
-
Latest News4 days ago
Hyosung Heavy Industries Ranked on BNEF’s Energy Storage Tier 1 List
-
Latest News4 days ago
Talino, Chemonics invest in startup Higala, the Philippines’ pioneering inclusive instant payment system
-
Latest News4 days ago
Report Finds that Huawei DigiTruck Training Helps Boost Income, Employment and Entrepreneurship
-
Latest News5 days ago
Zilch Partners with Amazon Web Services to Drive AI Innovation
-
Latest News3 days ago
COP28 President addresses historic first Board meeting for the Loss and Damage Fund, urging Parties to build on progress with a fully functioning fund that delivers lasting, positive, socio-economic impact
-
Latest News3 days ago
SAR1.1 Billion Riyadh Real Estate Fund Launched by Ezdihar Real Estate Development & Al-Istithmar Capital