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Is FTX Making a Comeback? 🤨

August 08, 2023

Hey fam!

So if you’ve been rockin’ with us for a while, you know that we love anything at the intersection of tech + culture. And in case you missed it, last November we wrote an article comparing the crash and fall of FTX, a (formerly) prominent cryptocurrency exchange, to the craziness of Love is Blind, one of our favorite reality TV shows on Netflix. 

Well, in classic Netflix fashion, it’s time to do a little check-in on one of the main characters of the article: Sam Bankman-Fried (SBF). Once again, the former CEO and founder of FTX is caught up in the news. 

This week, we’re breaking down everything that’s going on… Is FTX making a comeback? Is all of the lost money going to be recovered? Can we ever trust SBF again?

*Netflix announcer voice* Find out next on this episode of Web3 for the Culture! 

And as always, we’re bringing more than just the latest headlines. We’ve also got a company highlight, job opportunities, and more news worth paying attention to. So let’s dive in.

First – what’s going on with SBF?

Once heralded as a cryptocurrency savior, SBF is back in the news, this time for what was initially thought to be good news. However, it turned out to be too good to be true.

SBF was indicted on 8 counts of fraud, money laundering, and campaign finance offenses in December 2022. However, it was reported in recent weeks by many media outlets, including the New York Times, that several of these charges have been dropped.

But folks, don’t trust everything you read on the internet. Let’s set the record straight.

Was a charge dropped? Yes, two to be exact. 

  1. Federal prosecutors will not pursue a campaign finance charge against Sam Bankman-Fried because they did not get permission from the Bahamas government to do so when he was extradited from the country in December.

  2. On the same grounds, the U.S. Attorney’s Office in Manhattan dropped another charge against him for violating anti-bribery statutes.

What about the other charges? They aren’t going anywhere. On top of that, his $250M bond is at risk as he battles allegations of intimidating a former colleague, former Alameda CEO and girlfriend, Caroline Ellison. He faces claims that he attempted to influence the jury by leaking excerpts from her diary to the New York Times. Bold move, Sam. Very bold move.

What’s happening with FTX?

While there’s definitely a LOT going on with SBF, FTX has silently been making moves to save this company. On July 31st, John J. Ray III, Chief Executive Officer and Chief Restructuring Officer of the FTX Debtors, announced their initial restructuring plan with a focus on settling the evidently large and complicated collection of claims. Here are some of the highlights:

  • FTX 2.0: intended to rebuilt as an offshore exchange

  • FTX Token Holders: if you held an FTX Token, sorry, those are being canceled

  • FTX estates: will be liquidated to payout distributions to customers and creditors in cash

  • What creditors can request: a share of equity, tokens, and other interests in the potential offshore FTX exchange

  • SBF Sued: alongside other implicated directors in an attempt to recover over $1 billion in alleged misappropriated funds

This is the first of what will likely be many iterations of the reorganization of FTX, so sit tight as we see what develops over the coming weeks.

Now what does this mean for crypto?

Let’s just be straight up here. If the industry wants to have a sustainable future (which we believe it will!), some serious work needs to be done to ensure its long-term growth. There’s a need for transparency, accountability, and adherence to the legal and ethical standards that are currently set in place and also yet to be formed. If we had to relate it back to Love is Blind, It feels like a balancing act of giving the new guy or girl a chance, but also ensuring that they don’t cross boundaries that are in place for a reason! 

So what do these latest developments mean for crypto?

  • Feds Watchin’: The misappropriation of funds only further highlights a point we’ve been saying over and over again: regulation is key! Regulatory oversight is going to be what helps get rid of the bad guys and drive adoption in the long run. 

  • Market Confidence: In an industry where speculation has historically driven the highs and lows of crypto, events involving high-profile figures like SBF can significantly influence market sentiment and investor confidence. This type of negative news creates uncertainty and impacts the reputation of both specific projects and the broader crypto ecosystem.

  • Building Trust: This whole FTX fiasco and SBF comeback story means that the ability to transparently address and resolve issues like this will be crucial for maintaining trust within the crypto community.

Our biggest advice for those of you interested in crypto is to continue learning and observing what happens in this bear market. Pay attention to the regulation that comes out of mishaps like these and determine based on your risk tolerance how and when you want to engage. 

Company Spotlight: Moonpay 🌛

In the spirit of crypto, this week we’re highlighting Moonpay! They’re one of the first and most successful companies at helping onboard people into crypto through a user-friendly platform and convenient on-ramp.

How do they do it? They provide a platform for purchasing crypto using traditional payment methods like credit and debit cards. This acts as an intermediary between users and crypto exchanges, ultimately simplifying the process of buying crypto for people who aren’t as familiar with the technical aspects of trading on exchanges. 

Jobs in Web3: Bag Talk 💰

We know a lot of you might be looking for roles in tech these days. Don’t worry - we got you! Take a look at some dope roles in tech and VC:

What’s Happening in the News 🗞️

Here’s what caught our attention over the past two weeks –

Thanks for tapping in with us this week! Until next time :)

– Chad & Kendall