The new head of FTX received $690,000 in a month and a half of work
The new Head of Ftx, John Ray, received $690,000 from the cryptocurrency exchange in just under two months of work. This was reported by Business Insider, citing a court filing.
Ray earned $690,000 in hourly pay between Nov. 11, 2022, and the end of December after FTX CEO Sam Bankman-Fried resigned as CEO and filed for Chapter 11 bankruptcy protection. Ray was charged with overseeing FTX’s bankruptcy process and trying to recover billions of dollars in funds to pay off customers and creditors.
The new head of the company also told the court he was taking $1,300. So he worked 75 hours a week for nearly two months, unraveling the company’s financial fraud.
“I’ve just never seen anything like this in all my 40 years of restructuring and corporate legal work,” Ray said of FTX during an appearance before Congress, accusing the company’s former management of embezzlement.
Ray said it may take longer than usual to recover assets because of FTX’s “complete lack of accounting” since its beginning.
In a statement, Ray also argued that the exchange was run by a very small group of extremely inexperienced and unsophisticated people who didn’t implement virtually any of the systems or controls necessary for a company entrusted with other people’s money or assets.
On November 11, FTX declared bankruptcy amid a large shortage of assets to cover liabilities to customers. The decision came days after an investigation into the cryptocurrency exchange’s liquidity problems surfaced. It is alleged that Bankman-Fried arbitrarily used customer assets to cover the debts of his firm, Alameda Research.
We previously reported that the Tron ecosystem would have a payment system for ChatGPT.
Ripple case more crucial than ever amid Coinbase, Binance SEC crackdown: Lawyers
Whether XRP is ruled as a security or not in the Ripple case will certainly have an influence on the two latest crypto exchange lawsuits, crypto lawyers told Cointelegraph.
The judges presiding over Coinbase and Binance’s lawsuits will likely watch the results of the SEC v Ripple case closely, crypto lawyers told Cointelegraph.
Ripple has been in a legal battle with the United States Securities and Exchange Commission since December 2020, with the regulator alleging that Ripple offered unregistered securities via XRP since 2013.
On June 6 the SEC filed a lawsuit against Coinbase also alleging that it has been offering unregistered securities. A day before it filed a lawsuit against Binance containing some similar allegations.
Lawyer James Murphy, known as “MetaLawMan” on Twitter, explained in a series of tweets on June 9 that a favorable outcome for Ripple could “undermine the entire basis for the SEC’s case” against both Coinbase and Binance.
However, he also warned that “before anyone gets too excited,” a ruling by Judge Torres in the Ripple case would not be “binding precedent” for these recent filings.
This means that the judges for the Coinbase and Binance lawsuit will “not be bound to rule the same way,” as only decisions of the Court of Appeals and the Supreme Court have that influence.
Speaking to Cointelegraph, pro-XRP lawyer John Deaton believes the SEC is “well aware” that Judge Torres’ decision in the Ripple case will be published “in the very near future.”
Deaton believes that the SEC purposefully filed these new cases ahead of that result, in case the regulator faces an unfavorable outcome in the Ripple case, stating:
“I believe the SEC wanted to get those cases filed before that decision just in case it is a bad result for the SEC, possibly causing it to lose some political and legal momentum.”
Murphy believes the judge assigned to the Coinbase case, Judge Reardon, “will pay very close attention” to the determination of whether XRP is a security or not, pointing out that they serve in the same court in lower Manhattan.
He believes that Reardon would “follow the same reasoning” as to whether the 13 tokens cited in the Coinbase complaint are securities, adding that this can go “both ways,” if it’s a favorable outcome for the SEC.
XRP-friendly lawyer Bill Morgan, a consultant at Morgan Mac Lawyers, also opined that the Ripple case could have an influence over the Binance and Coinbase cases.
Morgan explained that the outcome in the Ripple lawsuit can be used as an “advantage” for either the industry or the SEC, depending on the result.
“If they lose badly in the Ripple case, they go forwards with Coinbase and Binance with a substantial judgment against them. Obviously Coinbase and Binance will use that to their advantage that the sales of XRP is not an investment contract.”
Deaton noted that he actually predicted back in 2022 that the SEC would sue Coinbase and Binance “by the way the SEC was approaching the Ripple and XRP case.”
However, he believes that the SEC will tone down its action against crypto firms once the major financial institutions adopt a greater share of the crypto market.
“Once JPMorgan, Goldman Sachs or other traditional players get a bigger slice of the crypto market then the SEC will become more reasonable” he stated.
SEC lawsuits against Binance and Coinbase unify the crypto industry
Professionals across the crypto sector have responded to the United States Securities and Exchange Commission’s (SEC) recent actions against two of the biggest crypto exchanges, Binance and Coinbase.
On June 5, the SEC filed a lawsuit against Binance for allegedly offering unregistered securities. Only a day after filing the Binance suit, the commission also went after Coinbase on similar grounds, alleging that popular cryptocurrencies offered by the exchange, such as Solana, Polygon and The Sandbox, qualify as securities. reached out to market players working in the space for their responses to the recent actions by the SEC. From sharing a belief that it will drive crypto companies away from the U.S. to simply calling the SEC’s actions lazy, industry players shared their thoughts on the latest developments.
An ‘unacceptable’ approach to regulation
According to Kristin Smith, the CEO of the Blockchain Association, while the SEC’s actions are expected, it’s still unacceptable. Smith explained that:
“The SEC doesn’t make the law. Indeed, this approach to regulation is unacceptable, but it is what we have come to expect from the SEC and its anti-crypto stance.”
The executive highlighted that while the industry and the U.S. Congress are working to develop effective regulation, the SEC “continues to distract from substantive policy efforts.” The executive believes that by listing assets this way, the SEC is trying to circumvent formal rulemaking processes and deny public engagement.
Meanwhile, Paolo Ardoino, the chief technology officer of stablecoin issuer Tether, believes companies’ complaints against the SEC should be listened to. According to Ardoino, the uncertainty of rules and guidance in the U.S. is becoming a common theme, even among the country’s biggest crypto supporters.
Turbos Finance CEO Ted Shao also echoed Smith’s sentiment. Shao says this is “not the direction Web3 developers want to see.” The executive believes the SEC showed that it’s against the whole Web3 space, as they are also coming after top projects, not just centralized exchanges.
Driving crypto players abroad and weakening consumer confidence
In addition to the SEC’s actions being unacceptable, other professionals working in the space believe that the effects of this recent move include pushing crypto players to more crypto-friendly jurisdictions and weakening consumer confidence in crypto within the United States.
Insider Intelligence crypto analyst Will Paige said that the recent suits highlight the SEC’s intent to police the space through enforcement in the absence of a regulatory framework. According to Paige, this could potentially knock down the “already weak consumer confidence in cryptocurrencies” in the country.
Ben Caselin, the chief strategy officer at crypto exchange MaskEX, believes that while this is a case against Binance, it may have implications for other players in the United States. The former AAX executive explained that this can “open up more opportunities for other jurisdictions, such as Hong Kong, Dubai or even El Salvador, to drive innovation and attract capital and talent.”
Oscar Franklin Tan, the chief legal officer of nonfungible token protocol Enjin, agrees with the sentiment. According to Tan, the world will not wait for the U.S. to make up its mind on crypto. Tan explained:
“The SEC actions only drive talent and innovation out of the U.S. to countries with clearer rules that support responsible builders. Singapore, in 2020, stated it does not follow the U.S. Howey test. Japan has a clear self-regulatory framework for exchanges.”
The executive believes that “progressive countries” will reap the benefits, especially now that explosions in artificial intelligence and extended reality highlight the need for blockchain and genuine digital ownership.
Doubts cast on SEC’s fairness and motivations
While some expressed their beliefs on the potential effects of the SEC’s lawsuit against Binance and Coinbase, other crypto professionals explored the motivation and fairness of the SEC’s move.
According to David Schwed, the chief operating officer of Blockchain security firm Halborn, the SEC’s mandate is to ensure the safeguarding of investors. Schwed believes that this can be done through clear regulations, not through enforcement actions. The executive added that SEC Chair Gary Gensler’s motivations may be skewed. “It seems to me that his personal ambitions and the need to validate his stance have now superseded his core mandate,” he explained.
Alex Strześniewski, the founder of the decentralized finance protocol AngelBlock, described the SEC’s actions as “lazy.” The executive believes that it does not drive proper regulation forward. He explained:
“It’s like a school teacher berating you for giving the wrong answers but failing to give any explanation beyond that. I also don’t believe that the SEC does, in fact, have jurisdiction over everything they’re claiming to.”
Meanwhile, Tim Shan, the chief operating officer at decentralized exchange Dexalot, expressed mixed feelings about the lawsuits and said the SEC’s actions are unfair to the community.
“They’ve provided very little clarity or guidance to the crypto community. They are regulating through the courts, which is really quite unfair and not the right way to regulate/govern,” he said.
Impact on prices of crypto stocks and altcoins
Stephan Lutz, the CEO of crypto trading platform BitMEX, shared insights on the potential effects of the SEC’s crackdown on exchanges on the market. In the short-term, Lutz said that there would be a downside pressure on the prices of crypto stocks, altcoins and valuations of crypto startups based in the US. Lutz explained that:
“Investors are likely to keep funds in crypto but divest towards Bitcoin because these are unlikely deemed as a security, or stablecoins due to their correlation with fiat.”
In the medium and long-term, Lutz believes that exchanges will be cautious when dealing with customers based in the US and providing access to what the SEC is claiming to be securities. The executive also expressed frustration that regulators are “taking the issue of securities definition to the courthouse once again,” instead of offering clearer guidelines.
BitMEX has notably had its share of troubles with regulators in the US. In 2021, the trading platform agreed to pay up to $100 million to resolve a case with the Commodity Futures Trading Commission (CFTC) and the Financial Crimes Enforcement Network (FinCEN). In 2022, a New York court ordered BitMEX founders to pay $30 million in civil penalties.
NFT platform Enjin forks Polkadot parachain Efinity to new mainnet
Non Fungible token (NFT) platform Enjin has announced its transition to a new mainnet called Enjin Blockchain, aiming to further Web3 adoption. Following the transition, its Polkadot parachain called Efinity has been forked to the new blockchain.
In an announcement sent, the Enjin team highlighted that Enjin Blockchain would differ from other blockchain solutions that rely on smart contracts. According to Enjin, functions like creating and transferring NFTs will be integrated into the blockchain’s foundational code.
Apart from this, the blockchain also presents new features. These include “Fuel Tanks,” which lets developers subsidize user transaction fees, and “Discrete Accounts,” which allows users to interact with projects using its blockchain without downloading specific wallet software.
The team also informed its community that Efinity, its Polkadot parachain, has also been forked to the new mainnet. It will be called the Efinity Matrixchain and support a transition for its existing users.
Enjin co-founder and chief technology officer Witek Radomski said that the launch of the Enjin Blockchain aims to support creativity by making it easier and economical for anyone to create and distribute NFTs. Radomski explained:
“Enjin Blockchain makes the creation and mass distribution of NFTs affordable and accessible to everyone. […] Our aim is nothing short of revolutionizing gaming, ownership, and online identity.”
Oscar Franklin Tan, Enjin’s chief financial officer, commented that NFTs and digital ownership would be the cornerstone for what he describes as “the next wave of gaming” fueled by developments in artificial intelligence, augmented reality and virtual reality. Because of this, Enjin aims to be there to support this new “explosion of content.”
In other news, blue-chip collaterals have started to help stabilize NFT lending, NFT protocol Paraspace highlighted that despite accumulating NFT loans of over $280 million, it had no bad debt and only 16 NFT liquidations. According to its team, it owes its success to the rule allowing only blue-chip NFTs to be used as collateral.
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