FTX trial explains company’s end while Bitcoin’s Uptober turns very positive
Last Updated on 6 November 2023 by CryptoTips.eu
This week during the FTX lawsuit we learnt wat exactly happened in that fateful week in November 2022 when the company went bust (and how much the company spent to attract celebrities for publicity). Bitcoin didn’t pay too much attention to all that FUD and calmly continued to climb to $30k.
Our Korean friend
The former director of FTX’s engineering department, Nishad Singh, took his turn as a witness in the FTX trial this week. Along with Gary Wang and Caroline Ellison, Singh (who co-founded FTX together with Sam) is the third witness to agree to a deal with the FBI to testify against Sam Bankman-Fried in exchange for a reduced sentence.
Singh’s account didn’t really provide many new facts, but it did give us a detailed overview of the last week of FTX.
When the price of the FTT coin (FTX’s cryptocurrency) collapsed after it became known that both FTX and Alameda had supported a large part of their accounting with those coins (of which they could ‘print’ as many as they wanted), many FTX customers wanted to urgently withdraw their money from the platform.
Singh calculated that FTX had enough money to meet their customers’ demand, but was then reminded by Sam that there was also that one account from ‘our Korean friend’, which left an $8 billion hole in their portfolio.
Nishad Singh, FTX’s former chief of engineering, frequently said he disapproved of Sam Bankman-Fried’s actions — but didn’t always take action — in his testimony at SBF’s fraud trial https://t.co/7KtuJJo1X6
— Bloomberg (@business) October 19, 2023
Our Korean friend pointed to Do Kwon, the founder of the Terra and Luna coins that had gone bankrupt in April of that year. FTX had already lost billions and decided to put all the losses of both Alameda and FTX into one large account in their joint accounting, forget about past transgressions and just blame everything on the collapse of Terra and Luna.
This ‘Korean’ account already contained a loss of 8 billion dollars, and another 5 billion dollars were added due to the collapse of the FTT currency.
Five days later, FTX was declared bankrupt.
Earlier this week we already heard how much SBF spent to obtain the marketing services of Tom Brady, Stephen Curry and many other celebrities.
The FTX lawsuit is now on hold until October 26.
Uptober
The month of October is traditionally one of the best months for Bitcoin and 2023 is no different. With a return of some 15% (so far) you would have had a nice return if you had purchased Bitcoin on October 1st. In any case better than most European stock markets. For example, the Dutch AEX and the Belgian BEL20 both fell in October.
