Category: FTX

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Crypto Exchange Crypto News FTX Investing

FTX and Morgan Creek Want a Piece of Troubled Crypto Lender ‘BlockFi’

Less than a week after extending a US$250 million line of credit to BlockFi, Bahamian-based exchange FTX is now in talks to acquire a stake in the beleaguered crypto lending company.

FTX’s credit line offer stood to effectively wipe out all BlockFi shareholders, including investment firm Morgan Creek Digital, the firm told its investors. For this reason, Morgan Creek – a longtime backer of BlockFi – is attempting to raise an equivalent amount from investors to purchase a majority stake in the troubled lender, according to a leaked investor call.

VC Funds Line Up to Help Bail Out BlockFi

While Morgan Creek has declined to comment on the move, multiple venture capital funds are said to be exploring ways to provide equity financing to BlockFi as the lender struggles to stay afloat, according to an insider.

Morgan Creek managing partner Mark Yusko did reveal via the leaked call that BlockFi founders Zac Prince and Flori Marquez had good reason to accept FTX’s terms. Of the several emergency financing offers BlockFi had received, FTX’s was the only one that would not subordinate client assets to the rescuer:

Deal Just Days Away

Yusko also revealed on the leaked call that FTX and BlockFi were “probably three days away from signing a definitive agreement”. The outcome may prove to be the only bright light in what’s been a bleak month for BlockFi – and crypto in general – with Prince announcing in a June 14 tweet that “roughly 20 percent” of its workforce would be let go in the wake of the current market slump.

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Crypto News FTX

FTX to Bail Out BlockFi With $250 Million Line of Credit

Crypto lender BlockFi has secured a deal with crypto exchange FTX for US$250 million in revolving credit, as tweeted by BlockFi CEO Zac Prince this week:

Injection of Strength

Under the terms of the agreement, BlockFi will have access to capital amid the current massive downturn in the crypto market. FTX founder and CEO Sam Bankman-Fried said in a return tweet that the facility would enable BlockFi to “navigate the market from a position of strength”.

Prince has indicated that the proceeds from the loan are contractually subordinated to all client balances, meaning that BlockFi will satisfy its obligations on client accounts before paying FTX.

The news comes amid a difficult time for BlockFi, which recently had to cut its staff by 20 percent. Last week, Celsius, one of BlockFi’s crypto lending competitors, froze account withdrawals, swaps, and transfers to help it through the crypto winter, reportedly transferring US$320 million in cryptocurrencies to FTX before doing so.

Deal May Lead to Future Partnership

Along with the announcement of the line of credit, Prince hinted that the deal could open the door to a full-fledged partnership between FTX and BlockFi. He said on Twitter:

This agreement also unlocks future collaboration and innovation between BlockFi and FTX as we work to accelerate prosperity worldwide through crypto financial services.

Zac Prince, CEO, BlockFi
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CeFi Celsius Crypto News FTX

Claims Surface ‘Celsius’ Sent $320 Million to FTX Before Halting User Withdrawals

Before halting all withdrawals this week, crypto lending platform Celsius is alleged to have quickly transferred over US$320 million worth of cryptos to Bahamian exchange FTX. Rumours are now running rampant that Celsius may be heading to zero.

Celsius token (CEL) fell nearly 70 percent since the firm announced on June 13 it was pausing all withdrawals to “stabilise liquidity”. It now finds itself in troubled waters as the company is rumoured to have unstaked US$247 million in Wrapped Bitcoin from AAVE and sent it to FTX.

Transactions commenced over the weekend, with the first batch of 3,500 Wrapped BTC and 50,000 ETH, and continued to increase in subsequent hours. Celsius has yet to comment on the transfers, with the only communication coming from an announcement halting all users’ services, including withdrawals.

Twitter Accusations of Mismanagement

While the firm has not yet addressed the transfers to FTX, the crypto community is up in arms on Twitter and speculation runs wild that there are associated issues of liquidity.

Users have also criticised the platform for how they believe the project has mismanaged its funds following the collapse of the Anchor Protocol on the now-renamed Terra Classic blockchain. Celsius has been surrounded by scandal since its chief financial officer was arrested in December 2021 on charges of money laundering.

Some believe that if Celsius were to fail, it would precipitate a sell-off of its significant stack of staked ETH, which could cause it to depeg further from ETH.

While it is still unclear what the team at Celsius plans to do with the crypto it has moved, there is a real possibility that it could sell the assets it sent to FTX. Another option might be that it intends to stake the tokens it is sending to the exchange to earn yields. At this early stage, there appear to be more questions than answers. Hopefully some clarity will emerge shortly, particularly for those users who funds remained locked up.

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Crypto News FTX

FTX CEO Sam Bankman-Fried Willing to Spend up to $1 Billion to Stop Trump

Sam Bankman-Fried, the billionaire founder and CEO of FTX, has indicated in a recent podcast that he is prepared to donate up to US$1 billion towards the Democratic Party’s 2024 US presidential election campaign.

Some have viewed the move as more of a “calculated investment”:

Pot of Gold to Block Trump

In a recent episode of Jacob Goldstein’s podcast What’s Your Problem?, Bankman-Fried (widely known as “SBF”) indicated he would likely donate “somewhere” between US$100 million and US$1 billion during the 2024 US presidential election campaign:

The 29-year-old, who recently joined the Forbes Rich List, indicated that donations would likely be “north of US$100 million” and that US$1 billion was a “soft ceiling”:

As for how much more than that [$1 billion], I don’t know. It really does depend on what happens. It’s really dependent on exactly who’s running where for what … Yeah, I think that’s a decent thing to look at, as a sort of … I would hate to say hard ceiling, but at least as sort of a soft ceiling, I would say, yeah.

Sam Bankman-Fried, founder and CEO, FTX

Not SBF’s First Rodeo

While SBF’s political contributions are news to some, those paying attention know he is no stranger to the world of electoral politics. Two years ago, he donated US$5.2 million to Joe Biden’s 2020 campaign, making him the second-largest individual donor.

More recently, he contributed US$10 million in a failed campaign to nominate Carrick Flynn in the Oregon Democratic primaries. And that’s not all – some reports suggest SBF has dropped over US$31.5 million in this election cycle alone.

Buying Influence?

While some on Twitter joked that SBF should just “buy Congress”, others viewed his donations as “the oldest trick in the world” and that “doors would be opened” for the crypto executive with subsidies of that size.

Some praised him for his “altruism”, though others viewed the donations as a mechanism to gain political influence or as a tool to avoid regulatory scrutiny:

Billionaires tend to be polarising, so the pushback is not unexpected. Most placed in a similar position would find it difficult not to use their wealth to curry favours. From a legal perspective, the line between bribery and political donations is clear, and to be sure, SBF is on the right side of that line.

While it is difficult to draw conclusions about the crypto mogul’s intentions, one thing remains clear: SBF is willing to throw some serious capital at blocking Donald Trump’s resurgence.

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Alchemy Pay Binance Coinbase Crypto News FTX OpenSea

Forbes Releases Rich List for Crypto and Blockchain Billionaires

Forbes’ crypto billionaires list has grown by seven this year, increasing to 19 members, though these new additions have not knocked Binance founder and CEO Changpeng ‘CZ’ Zhao off the top spot.

Recent DLT News Review: New Launches by Forbes and Visa ...
Forbes releases its crypto billionaires list this week.

The Forbes list expanded by 58 percent this year. When it was first compiled in 2018, the bar to qualify was set at US$350 million. However, as the industry has since expanded exponentially, only billionaires qualify in 2022.

Binance founder and CEO ‘CZ’ Zhao is holding tight to his top position on the list for another year. Despite Forbes downgrading CZ’s wealth estimate from US$96 billion to $65 billion, he is still several lengths out in front:

In second place is FTX founder and CEO Sam Bankman-Fried, with a current estimated worth of US$24 billion. Bankman-Fried has grand intentions to donate much of his wealth to charities, keeping only 1 percent of his annual earnings each year, stating “I don’t want a yacht”. Brian Armstrong, CEO and founder of CoinBase, took third place with a net worth of US$6.6 billion.

Among the handful of newcomers are FTX’s co-founder Gary Wang, OpenSea co-founders Alex Atallah and Devin Finzer, Song Chi-Hyung (founder of Upbit), Kim Hyoung-nyon (Upbit’s EVP), and Nikil Viswanathan and Joseph Lau, co-founders of Alchemy.

Crypto Billionaires Line Their Pockets

For a select few, crypto investments have paid off immensely. Aussie billionaire Alex Waislitz bought crypto investments that reportedly increased in value by 400 percent. Nicknamed “Australia’s Warren Buffett”, Waislitz invested through a pre-IPO (initial public offering), which turned out to be a very smart move.

Billionaire PayPal founder Peter Thiel, on the other hand, has stated that he is disappointed he didn’t invest more before the boom.

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Chiliz FTX NFTs Sports

Chiliz (CHZ) Surges Amid Launch of Testnet Enabling Sports Brands to Mint NFTs

Chiliz, creator of the fan token Socios, is inviting brands to build alongside it on Chiliz Chain 2.0 blockchain network, which launched its first testnet on March 31.

The digital asset sporting project has announced the launch of the Scoville testnet for its newly established layer-1 blockchain network, Chiliz Chain 2.0, also known as CC2.

CC2 is aiming to advance the Web3 capabilities of high-profile sporting and entertainment firms to create NFTs and fan tokens, and construct DeFi applications and play-to-earn games along with implementing a range of programs and services for their community:

Chiliz Scores High on the Scoville Scale

Chiliz has defined the fan token market with its Socios platform, signing football heavyweights such as FC Barcelona, Paris Saint-Germain and Juventus, along with the UFC, F1 teams and esports clubs, with more than 130 partners in total. Argentinian football superstar Lionel Messi has signed on as the new face of the platform.

Chiliz grabbed the attention of the crypto world when its native token CHZ grew 7,000 percent in three months amid major sports partnerships. The token also pumped after a partnership with FTX was announced in September 2021.

CC2 to Run on Brand-New Blockchain BNB

The firm has bigger ambitions beyond fan tokens, which is the reason it is developing a second-generation blockchain to allow other sports and entertainment brands to build all sorts of Web3 applications alongside Socios. A rollout for a planned mainnet is scheduled for later in 2022. With CC2, the firm will shift away from its current blockchain that is forked from Ethereum to a brand-new one built on the BNB Chain.

According to chief strategy officer Max Rabinovitch, it has always been Chiliz’s plan to expand from its initial fan token focus into the wider crypto ecosystem – to let IP holders and other builders tap into a broader platform powered by the CHZ token. The broader fan token ecosystem generates billions in monthly trading volume, with the largest listed fan token, Socios’s Manchester City FC (CITY) token having a market cap of over US$58 million.

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Charity Cryptocurrencies FTX Ukraine

Ukraine Partners with FTX to Launch Crypto Fundraising Website

Digital asset exchange FTX and the Ukrainian Ministry of Digital Transformation have come together to develop a platform for crypto donations to the besieged country’s war defence.

‘Aid for Ukraine’ is utilising FTX’s technology to convert crypto donations into fiat money, which is then distributed to Ukraine’s National Bank’s fundraising account:

Three-Way Partnership

Mykhailo Fedorov, Ukraine’s Vice Prime Minister and Minister of Digital Transformation, took to Twitter on March 15 to announce Aid for Ukraine, the result of a partnership between the nation, FTX and decentralised staking provider Everstake.

FTX and Everstake have been developing the necessary technology to convert incoming donations into fiat money that can be used by Ukrainians in need. The money is sent to the National Bank’s fundraising account and distributed appropriately, though some Twitter users have raised concerns about how their donations are being spent:

The donated funds are said to be sent directly to both the nation’s armed forces and civilians in need of humanitarian assistance. At the time of writing, over US$48 million had been raised via the platform.

The site currently accepts BTC, ETH, SOL, EOS, DOGE, XMR, USDT, DOT, ICON and NEO. Updates on how much has been raised by the community so far can be viewed on the Aid for Ukraine website.

Crypto Funds Ukrainian Defence Effort

Crypto donations are playing a large role in Ukraine’s defence against Russia. On March 4, an NFT of the Ukrainian flag raised US$6.75 million in crypto for the nation, proceeds of which were directed to the ‘Come Back Alive’ organisation which donates supplies to the families of soldiers and civilians.

Total crypto donations to Ukrainians have now surpassed US$108 million. Kraken exchange recently distributed over US$10 million in aid to Ukraine citizens with crypto wallets. The total donations are dispersed across relief efforts, charities, and government wallets.