Bitcoin News and Price | Bitcoin.News

FTX’s Draft Reorganization Plan: Zeroing FTT Claims and Subordinating Non-Customer

by Blockchain NewsAugust 1, 2023

The document, dated July 31, 2023, outlines the draft plan of reorganization for FTX Trading Ltd. and its affiliated debtors, collectively referred to as “the Debtors.”

The Debtors have decided to file this draft plan at an early stage to facilitate creditor feedback and consensual resolution of certain issues. They expect to amend the plan in response to feedback and file an amended plan of reorganization in the fourth quarter of 2023.

Key aspects of the plan include disputes regarding the ownership of assets held on the FTX.com and FTX US exchanges, identification of three primary recovery pools corresponding to segregated assets, and recognition of special “shortfall” claims by the FTX.com and FTX US exchanges for unauthorized borrowing or misappropriation of assets.

The draft also covers the cancellation of intercompany claims, consolidation of the estates of most of the Debtors, subordination of certain claims to the pecuniary losses of customers and creditors, and extinguishment of FTT claims along with other equity interests.

Additionally, the document highlights the liquidation of the Debtors’ estates, with distributions to be paid to customers and creditors in cash, subject to certain voluntary elections in connection with a restart of an offshore exchange or otherwise.

The draft plan does not purport to resolve certain open questions under discussion among the Debtors, Consulting Parties, and other stakeholders.

This draft plan of reorganization for FTX Trading Ltd. addresses complex legal and financial matters, including asset pools, treatment of claims, and liquidation procedures. It reflects the current stage of negotiations and investigations and serves as a basis for further discussions and amendments.

Stakeholders are encouraged to review the entire draft plan, as additional modifications and clarifications are expected in the coming months. The document’s detailed approach emphasizes the importance of transparency and collaboration in managing the multifaceted challenges faced by the Debtors and their stakeholders.

Image source: Shutterstock

Source

FTX US and Alameda Research File Complaint Against FTX Digital Markets

by Blockchain NewsMarch 20, 2023

In March 2023, legal teams representing FTX US and Alameda Research filed a complaint against FTX Digital Markets, a Bahamas-based company, alleging that it was a fraudulent enterprise used to obscure the question of the firm’s ownership. The complaint was filed with the United States Bankruptcy Court for the District of Delaware, where FTX debtors stated that FTX Digital Markets, also known as FTX DM, and the joint provisional liquidators had claimed that the Bahamian arm was the “constructive owner” of FTX.com’s fiat and crypto assets, as well as other intellectual property.

The legal teams claim that these claims made by FTX DM are baseless and will harm FTX.com customers and all other creditors of the FTX Debtors as the company continues with bankruptcy proceedings in the United States. The filing states that the JPLs’ claim to ownership of FTX.com’s property is based mainly on constructive, equitable, and other non-documentary arguments that depend upon the false premise that FTX DM was the center of the FTX Group. The filing further states that FTX DM was only a short-lived provider of limited “match-making” services for customer-to-customer transactions on the cryptocurrency exchange built, owned, and operated by Debtor FTX Trading, its immediate corporate parent.

The complaint filed by FTX US and Alameda Research asserts that FTX DM was a shell entity used to conceal the issue of the firm’s ownership, and its claims to ownership of FTX.com’s property are unfounded. The legal teams claim that FTX DM was not the center of the FTX Group, as the company only provided limited match-making services for customer-to-customer transactions. The filing also asserts that FTX DM’s claims to ownership will harm FTX.com customers and all other creditors of the FTX Debtors as the company continues with bankruptcy proceedings in the United States.

The legal battle between FTX US, Alameda Research, and FTX Digital Markets is ongoing, and it remains to be seen how the bankruptcy court will rule in this case. However, the complaint filed by FTX US and Alameda Research raises serious questions about the ownership of FTX.com’s assets and the claims made by FTX DM. It is likely that this case will have significant implications for the cryptocurrency industry, as it highlights the importance of transparency and accountability in the sector.

Source

Tagged : Alameda Research / Bankruptcy / FTX / FTX DIGITAL MARKETS / FTX.US / News

CME Group Proposes Direct Crypto Derivatives Trading to Regulators

by Blockchain NewsOctober 3, 2022

CME Group, a US-based financial derivatives exchange, has proposed to regulators its plan to offer derivatives trading directly to retail customers.

According to The Wall Street Journal’s report on Saturday, CME Group filed paperwork to register as a so-called futures commission merchant (FCM).

Retail investors typically trade derivatives through third-party brokers such as TDAmeritrade. If regulators approve the CME’s plans, then individual consumers would be able to trade derivatives directly through CME rather than through brokerages.

Market participants talked about the new development. “This is notable and comes as no surprise. The CME Group has desired direct relationships with clients for as long as I can remember,” said CoinFund president Christopher Perkins, who commented on the Journal’s reporting via LinkedIn social media.

Joseph Guinan, CEO of the FCM Advantage futures, also stated if CME’s application is approved. Its entry into the futures brokerage space would be not only a game changer but also a dramatic concern for all FCMs (Futures Commission Merchants) should CME sets fees lower than such brokers.

A CME spokesperson also commented that the company’s commitment to the FCM model and the significant risk management remains an unwavering benefit to all industry participants.

CME’s move is a turnaround plan which follows a similar service offering proposal launched by FTX.US in April. CME’s plan is similar to FTX.US’s proposal to allow consumers to post margins and trade crypto derivatives directly on its platform.

In May, the Commodity Futures Trading Commission (CFTC) sought public comment on a request from FTX.US to modify its derivatives clearing organization (DCO) license to offer a new type of crypto margin trading to U.S. retail customers.

CME Group and ICE both opposed FTX.US’ proposal to offer central clearing of margin products directly to retail customers, which was defended by the crypto industry and the FIA (Futures Industry Association) – a global industry organization for the futures, options, and listed derivatives markets – in a Congressional hearing. FTX US’s proposal was considered deficient and poses a significant risk to market stability and market participants.

In May’s hearing before the House Agricultural Committee, U.S. lawmakers were sceptical of the FTX’s proposal for an automated collateral system to be used for crypto and other digital assets in futures markets.

Cryptocurrency derivatives trading on centralized exchanges rose to $3.12 trillion in July, a 13% monthly increase, as crypto prices maintain efforts to gain recovery from the recent market crash. The crypto market plunged in May and June as worries about Federal Reserve interest rate hikes and high inflation prompted investors to ditch risky assets.

As of July, the derivatives market made up 69% of total crypto volumes, up from 66% in June, and helped push overall crypto volumes on exchanges to $4.51 trillion in July. The rise in derivatives trading volume indicates an increase in speculative activity as traders believe there is room for further upside in the crypto rally.

Image source: Shutterstock

Source

Tagged : Cme Group / DIRECT CRYPTO DERIVATIVES / FTX.US / Regulation / Regulators

FTX.US President Brett Harrison to Step down

by Blockchain NewsSeptember 28, 2022

Brett Harrison, the president of the cryptocurrency exchange FTX.US, on Tuesday, announced via Twitter social media that he is stepping down from his role but will stay at the exchange in an advisory capacity.

“Over the next few months, I’ll be transferring my responsibilities and moving into an advisory role at the company,” Harrison posted on the popular social media platform.

According to his LinkedIn profile, Harrison took over the role as president of FTX.US in May last year. But now, he is leaving at a time when the crypto exchange is acting as a ‘white knight rescue’ for struggling crypto firms amid a market downturn that nosedived most trading activities.

“This industry is at a number of crossroads. The one that matters most to me, as a financial technologist, is the intersection of the arrival of larger market participants and the increasing fragmentation and technological complexity of the market’s landscape,” Harrison wrote on social media.

While Harrison did not say what he plans to do next, he stated that “I’m remaining in the industry with the goal of removing technological barriers to full participation in and maturation of global crypto markets, both centralized and decentralized.”

Before joining FTX.US, Harrison worked for almost two years at market maker Citadel Securities. Prior to that, he served as the head of trading systems technology at investment firm Jane Street for 7 1/2 years.

Is the ongoing financial crisis the cause of executives quitting?

Harrison’s departure is one of many other recent high-profile resignations happening at a time when the crypto market shakeup cost thousands of job losses and set off a round of consolidations.

A series of successions is setting a stage for a change of guards in the roughly decade-old industry. Many of crypto’s most prominent leaders, such as Michael Saylor, Jesse Powell, are technologists who discovered digital assets early, cultivated big followers, and didn’t hesitate to express what they believe online.

The wave of changes started in early August with Saylor, who founded MicroStrategy in 1989, announcing his resignation as the company’s longtime CEO to focus more on Bitcoin. Two weeks later, the CEO of troubled crypto broker Genesis, Michael Moro, stepped down.

On August 24, Sam Trabucco, the co-CEO of Alameda Research – the trading firm founded by FTX CEO Sam Bankman-Fried, announced his resignation to “prioritize other things.”

Last week on September 21, crypto exchange Kraken announced that its co-founder Jesse Powell will step down as CEO and be replaced by Chief Operating Officer David Ripley. And yesterday, the CEO of bankrupt crypto lending firm Celsius Network, Alex Mashinsky, also announced his resignation.

Image source: Shutterstock

Source

Tagged : BRETT HARRISON / FTX.US / News

GameStop Announces Partnership with FTX US

by Blockchain NewsSeptember 8, 2022

GameStop, the world’s largest video game retailer headquartered in Texas, USA, announced that it has entered into a partnership with FTX US (“FTX”) to become FTX’s preferred retail partner in the United States.

The partnership aims to promote “FTX’s digital asset community and marketplace” and bring more GameStop customers into FTX’s ecosystem.

In addition to partnering with FTX on new e-commerce and online marketing campaigns, GameStop will begin rolling out FTX gift cards at select stores.

Specific financial information was not disclosed to the public.

Shares of GameStop rose nearly 12% to $26.84 a share in after-hours trading following the news, even though GameStop reported an almost 4% drop in net sales for the quarter to $1.14 billion.

The company reported revenue of $1.14 billion in the second quarter as of July 30. Operating loss for the quarter was $108 million compared to -$58 million a year ago.

The latest earnings data showed that its second-quarter loss was 35 cents per share on an adjusted basis, below the average Wall Street analyst estimate of 38 cents per share.

Although GameStop reported lower net sales for the quarter, the partnership with FTX US attracted an influx of buyers, with GameStop’s jumping 11.06% to $26.48 in after-hours trading.

On a recent GameStop earnings call, Furlong said the company has started working on updating the brand and driving growth. He revealed that the company had developed a redesigned app, its rewards program has attracted new users, and it has hired employees with backgrounds in e-commerce and blockchain gaming.

At the end of May, the video game retailer launched a digital asset wallet for sending, receiving and storing cryptocurrencies and NFTs,

In July, Video game retailer GameStop Corp announced Monday the launch of a public beta version of a non-fungible token (NFT) marketplace amid the crypto market’s downturn.

Image source: Shutterstock

Source

Tagged : Bitcoin / Blockchain / FTX.US / GAMESTOP / News

Former CFTC Commissioner Joins FTX.US Board

by Blockchain NewsSeptember 2, 2022

FTX.US, the United States subsidiary of FTX Derivatives Exchange, has announced the appointment of Jill Sommers to its Board of Directors.

Sommers served as a 2-term commissioner of the Commodity Futures Trading Commission (CFTC) as nominated by both former Presidents George W. Bush and Barack Obama and was confirmed twice by the US Senate.

As an experienced Policy Adviser in the Derivatives ecosystem, Sommers brings her years of experience to the crypto exchange, which is aiming at establishing its stance as one of the foremost regulated crypto exchanges and Clearinghouses.

“I am honored to be joining the FTX US Derivatives Board of Directors to advance the mission of reshaping market structure in the United States,” Sommers said in a statement, “The company has been at the forefront of bridging the gap between traditional and digital assets while staying true to its founding principles of transparency and leading the charge toward becoming the most regulated digital asset exchange in the world. I’m excited to join the board as we continue working closely with regulators to further establish FTX US Derivatives as the premier regulated crypto derivatives trading platform.”

Since it finalized the acquisition of LedgerX, which it has renamed FTX US Derivatives, it has been offering users crypto-related options and swaps contracts. Besides pioneering Bitcoin mini contracts, FTX US Derivatives also offers physical settlement of all contracts, block trading and algorithmic trading opportunities for institutional investors, and direct access for all traders.

According to CEO Zach Dexter, Sommers’ inclusion on its board will help guide the company as it looks to make a more ambitious plunge into the broader financial ecosystem.

Exchanges are becoming fond of onboarding government officials with deep regulatory experiences to help steer their regulatory push. In like manner, One River Digital Asset Management appointed Jay Clayton to its Advisory board after he stepped down from his role as the Chairman of the US Securities and Exchange Commission (SEC).

Image source: Shutterstock

Source

Tagged : Cftc / Cryptocurrency Exchange / FTX / FTX.US / Industry Expert / JILL SOMMERS

Former CFTC Commissioner Joins FTX.US Board

by Blockchain NewsSeptember 2, 2022

FTX.US, the United States subsidiary of FTX Derivatives Exchange, has announced the appointment of Jill Sommers to its Board of Directors.

According to CEO Zach Dexter, Sommers’ inclusion on its board will help guide the company as it looks to make a more ambitious plunge into the broader financial ecosystem.

Image source: Shutterstock

Source

Tagged : Cftc / Cryptocurrency Exchange / FTX / FTX.US / Industry Expert / JILL SOMMERS

FDIC Calls Out FTX US, Other Crypto Firms to Stop Misleading Users About Deposit Protection

by Blockchain NewsAugust 20, 2022

The Federal Deposit Insurance Corporation (FDIC), a US government agency tasked with stabilizing the financial system in the event of bank failures, on Friday issued five cease-and-desist letters demanding five crypto-related firms stop making false and misleading statements about the availability of deposit insurance for their clients.

The FDIC ordered five firms behind certain crypto websites — including FTX US, Cryptonews.com, Cryptosec.info, SmartAsset.com, and FDICCrypto.com — to “take immediate corrective action to address false or misleading statements concerning whether their customers’ funds were insured by the federal agency.”

Under the Federal Deposit Insurance Act, the FDIC has the power to prohibit use of the agency’s name or logo to imply customer funds are government insured when they are not.

In a statement, the regulator said: “Based upon evidence collected by the FDIC, each of these companies made false representations —including on their websites and social media accounts — stating or suggesting that certain crypto-related products are FDIC-insured or that stocks held in brokerage accounts are FDIC-insured.”

Concerning the case surrounding FTX.US, the FDIC’s letter cited a tweet from FTX. US President Brett Harrison that claims “direct deposits from employers to FTX and stocks are held in FDIC-insured accounts.”

For the other case, the cease-and-desist letter pointed out that SmartAsset.com identified FTX as an FDIC-insured exchange.

In general, the agency regulator said such claims are false and misleading statements implying that uninsured products are FDIC-insured.

The letters directed the above-mentioned companies to immediately remove the statements that suggest any firms deposited with FTX are FDIC-insured.

FDIC has given 15 days to these crypto-related firms to provide written confirmation that they have complied with the requests.

So far, FTX.US and SmartAsset.com have responded and said they have removed such content from their respective company’s online presence.

Harrison tweeted on Friday that he deleted the post and said the content didn’t mean to indicate that crypto assets deposited in FTX are insured by the FDIC, but rather “USD deposits from employers were held at insured banks.”

SmartAsset CEO and co-founder Michael Carvin also stated: “We are in communication with the FDIC to assess the matter and have removed the content at issue in the meantime.”

Controversy Surrounding Voyager

Late last month, FDIC issued a Financial Institution Advisory Letter informing the general public that the regulator does not insure assets issued by non-banking institutions like crypto companies.

On 29^th July, FDIC clashed with cryptocurrency brokerage Voyager Digital when it ordered the crypto lender to stop telling clients that their deposits are protected from losses by the Federal Deposit Insurance Corporation. The agency informed the public that such claims are not true.

Voyager mentioned its federally insured status on its website, social media accounts, and mobile app, the agency revealed.

FDIC said Voyager violated the Federal Deposit Insurance Act, which prohibits anyone from implying that deposits are insured when they are not.

Voyager Digital has a bank account with Metropolitan Commercial Bank of New York. The FDIC said that the account is insured.

But the agency clarified that customers opening and using accounts on the Voyager Digital platform are not insured.

Image source: Shutterstock

Source

Tagged : Crypto Firms / DEPOSIT PROTECTION / Fdic / FTX.US / Regulation

FTX and FTX.US Looking to Raise New Funds after Acquisition Campaign

by Blockchain NewsJuly 21, 2022

FTX Derivatives Exchange and its American subsidiary FTX.US are exploring the options to raise new sets of funds after the duo injected the bulk of the funds they raised earlier in the year into supporting distressed crypto companies.

As reported by Bloomberg, citing anonymous sources, the global FTX trading platform is looking to raise an almost equivalent amount it pulled earlier this year. As reported earlier by Blockchain.News, FTX concluded its Series C funding round in January, where it raised the sum of $400 million to increase its valuation to $32 billion.

FTX.US has also been active in the equity round scene, receiving $400 million in funding to top $8 billion in valuation. Riding on the back of this capital injection, FTX.US has notably acquired Embed Financial Technologies Inc., including its wholly-owned subsidiary Embed Clearing LLC for an undisclosed sum back in June, a move that aligned with its corporate strategy at the time.

By acting as a lender of last resort, FTX Global has positioned itself as a firm where distressed companies in the digital currency ecosystem run to.

Since the menacing turmoil that has caused several crypto lending platforms to halt transactions on their platform atop a deep-cut liquidity crisis, FTX Global has come to the aid of BlockFi and Voyager Digital, which are very large sums of money, including the $250 million credit facility extended to the former.

While Sam Bankman-Fried, FTX co-founder and CEO, acknowledged that the firm also has many more crypto firms it has helped without disclosing yet, it appears the two FTX arms will be better off with the proposed fundraising.

Known as one of the most liquid and profitable companies in the Web3.0 ecosystem nowadays, the attractiveness of the two FTX offshoots is still very much known to investors who may also bet on the future of the exchange yet again.

Image source: Shutterstock

Source

Tagged : Cryptocurrency / Exchange / Finance / FTX / FTX.US / Fundraising

FTX US Acquires Clearing Firm Embed, Enhancing its Stock Offerings

by Blockchain NewsJune 22, 2022

FTX US is deepening its hold as it looks to hit it off on the right foot with regulators concerning its new stock product offerings.

In doing this, the firm has announced the acquisition of Embed Financial Technologies Inc., including its wholly-owned subsidiary Embed Clearing LLC for an undisclosed sum.

According to the trading platform, the acquisition is subject to customary closing conditions and regulatory approvals. The acquisition is mutually beneficial for both companies as FTX US brings massive capital to help Embed scale and meet its brokerage and clearing obligations.

The company offers brokerage services and APIs to licensed brokers and registered investment advisors. Prior to this time, it counted FTX US as one of its numerous clients. The startup is a new FINRA, DTC, NSCC, Nasdaq, and IEX member clearing firm.

“As I mentioned when we launched FTX Stocks, our new equities and ETF trading platform, our goal at FTX is to provide a comprehensive trading application that spans all asset classes,” said FTX US President, Brett Harrison, “For equities and options trading this necessarily includes services such as clearing and custody, and our partnership with Embed showed us that they have built excellent technology and infrastructure to provide these services. We’re looking forward to working together to integrate both our teams and our technology as we continue to build FTX Stocks.”

FTX US is growing amongst the ranks, and it became a unicorn back in March when it raised the sum of $400 million at an $8 billion valuation.

The trading platform has a distinct interest in Mergers and Acquisitions (M&A) activities. The acquisition of Embed is not the first of its kind, as it completed the purchase of LedgerX, a Commodity Futures Trading Commission (CFTC) regulated clearing house.

Image source: Shutterstock

Source

Tagged : Cryptocurrency Exchange / EMBED FINANCIAL TECHNOLOGIES / Exchanges / FTX / FTX.US