Reading time 4m50s
Today, we’ve got new developments in the FTX case and commentary on the looming possibility of recession — and why some people don’t feel scared at all.
Although Sam and the rest of the infamous Crypto Class of 2022 might look natural in those orange and white stripes, they’re nowhere near jail — and we won’t know more about SBF’s sentence till October.
But first, let’s head on down to trivia town:
How much did Web3 startups fundraise in 2022?
Tap your answer below to see if you’re right!
- Sam had a $65B Credit Line with FTX 😱
- Hope Amidst Rumors of Recession 🥺
- Amazon Partners with Avalanche?! 💥
- Samsung to Offer BTC ETF 😤
- El Salvador Levels UP Crypto Game 🐂
Yes, you read that right. Sam had Garry Wang, co-founder and former CTO of FTX, create a backdoor credit line from FTX straight to Alameda worth $65 billion.
That credit line was how Alameda got customer funds without permission — and with those funds, “It bought planes, houses, threw parties, made political donations. It made personal loans to its founders. It sponsored the FTX Arena in Miami, a Formula One team, the League of Legends, Coachella and many other businesses, events and personalities," according to FTX’s lead attorney Adam Landis.
Landis also announced that FTX has now located a total of $5B in customer funds, whereas they previously could only locate about $1B.
While that’s good news for their customers, it still might not be all of the money that they’re owed. The bankruptcy filings citing a number “between $1 billion and $10 billion” 🙄
I’d bet FTX’s horrendous record keeping (or lack thereof) is partially to blame for that. They would approve or deny employee expenses using emojis — and that was just about the most sophisticated record method they used.
This one gets me — goodbye, massive Basketball arena and League of Legends sponsorship. Miami Heat has officially cut ties with FTX, and the firm will be ending its 2021-2028 sponsorship deal with League of Legends, too.
It seemed like the limits of FTX’s sponsorships and funding had no end, and its influence reached every corner of relevant media — and now, everyone who got the “leper’s touch” is scrambling to distance themselves from SBF’s failed company.
SBF has pleaded not guilty to all the charges brought against him, and we won’t hear any developments on his personal case until October, which is freaking ridiculous — he’ll be cozy in his parents’ house till then.
Rumors of recession are everywhere right now — you can feel it in asset prices, market sentiment, and company labor cuts.
Amazon is shutting down warehouses. Coinbase just let go 20% more employees. And unsurprisingly, Genesis has laid off 30% of its labor force as it tries to figure out what the heck it’s doing.
Yeah, not gonna lie — this feels pretty grim. The World Bank is warning of recession this year in the wake of rising interest rates and the war in Ukraine. And according to a new survey from Bloomberg of 38 economists, there’s now a 70% chance of a recession in 2023.
But you know what? Many firms are taking this economic moment as an opportunity for investing further — Animoca is fundraising $1B for metaverse development, and the Venom Foundation from Abu Dhabi just launched a $1B Web3 fund.
Alex Thorn, the director of research at Galaxy Digital, a crypto investment firm, is super optimistic too — he thinks Web3’s massive funding growth in 2022 will continue into this year, and that we could see as much as 31% of all transactions happening on the blockchain.
This high-level institutional talk is interesting, but I’m actually more curious to zoom in on the case of an individual in the Web3 space instead of an entire company.
Andy Feili (@afeli.eth) is a security engineer who began his journey into Web3 last year — and he’s been absolutely crushing it. I got to ask him about his thoughts on Web3’s job security in the face of a bear market and possible recession.
I asked what drew him to Web3: “There is the opportunity to make a big impact, especially in web3 security where the field is still very immature.”
He went on to address the state of the market. “The bear market doesn't affect me personally working in Web3. …DeFi and security auditing are still plodding along fine.
“For people trying to break into the industry it might be harder due to the bear market, but I think the long term prospects for the industry are good.”
There are layers to this — recession is tough, but it isn’t the end of the world, and it certainly doesn’t mean there aren’t any opportunities to be found 👍
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Other Top Stories Today 📢
This is big. The world’s number one online retailer and cloud service provider has partnered with a blockchain that specializes in affordable scaling. The aim of the partnership is to help accelerate adoption among governments, institutions, and businesses. VP and Global Head of Startups at Amazon Web Services (AWS) had this to say about the announcement: “Looking forward, Web3 and blockchain are inevitable… The velocity of this one seems like it’s accelerating and we’re just excited to be a part of this.”
Samsung Asset Management Hong Kong (SAMHK) is launching a Bitcoin ETF to meet new interest from government and institutional investors. This ETF will invest mainly in CME Bitcoin Futures and CME MicroBitcoin Futures. Hong Kong remains the only place in all of Asia where ETF trading is legal.
The “Volcano Bond” will be used to fund El Salvador’s “Bitcoin City.” What a wild sentence that was. The bill was passed on the 11th and will become law after it’s ratified by the ever-pro-crypto President Bukele. The National Bitcoin Office of El Salvador self-described in a Tweet as “the epicenter of Bitcoin adoption.” That feels a little bit much to me, but hey — they're putting their Bitcoin where their mouth is. They plan to develop “Bitcoin City,” a crypto-mining hub powered by renewable hydrothermal energy from the Conchagua volcano.
Web3 Resource of the Day
Web3: Never Bet Against Innovation | John Wu | TEDxBostonStudio - Video from Tedx Talks and John Wu
Welcome to John Wu’s Ted Talk. The President of Ava Labs, the firm behind Avalanche, gives an inspiring and well-rounded explanation of “the Internet of value” — Web3. The question he poses is “What needs to happen for the Internet of value to become ubiquitous?” Check the video out to hear his answer!
Happy Thursday, Reader
Have a great day, and don’t forget to take it easy when you can. We’ll be here, same time tomorrow, for the last newsletter of the week — and then it’s the sweet, sweet weekend.
And while I’ll be trying to get a new highest rank on my favorite video game this weekend, I’ll be praying that no one beats the high score of Bankman-Fried and Bernie Madoff, who ran the largest Ponzi scheme in history until his arrest in 2008.
That’s all for today, frens!
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DISCLAIMER: This is not financial advice. This newsletter is strictly educational and is not investment advice to buy or sell any assets or to make any financial decisions. Do your own research.