Reading time 4m40s
GM geniuses 🧠
It’s an FTX kinda Friday, so I’m going to preemptively remind you to get your crypto off exchanges, or risk becoming just another clown.
And I get it - self custody isn’t the most intuitive way to store your savings.
There is a learning curve involved.
But as we say in the industry: everyone buys Bitcoin at the price they deserve.
Don’t be average. Trust yourself 💪
Today's Agenda:
- A Look at the Books 👀
- MORE BOMBSHELLS 💥
- Gala Games on Steam 🚀
- The ROYAL Metaverse 👑
- Binance SHIFTING $$ 😬
A Peek Inside FTX’s Books
The new FTX CEO John J. Ray III, who has helped oversee some of the largest bankruptcies in history and is now taking the lead on FTX’s, said he's never seen anything as bad 👀
"Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information,” he stated in the bankruptcy filing that dropped yesterday.
It’s so whacky I’m calling it the FTX-Files.
The FTX-files mention that the court will launch a “deliberate investigation” into claims made about SBF, and it confirms widespread suspicions that Sam had used Alameda to loan himself and other FTX co-founders big piles of cash.
Perhaps the most shocking revelation from the filing includes the line in section 58 which states that FTX “does not have an accounting department and outsources this function.”
God DAMN br0000 🤯
It goes on, “employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis.”
Next we’ll learn the paystubs were written with crayons on construction paper and cut out with squiggly scissors 😅
The filing also reveals that real estate and personal items were purchased for employees using FTX funds and almost none of those transactions were properly documented or accounted for.
But the cherry on top has to be their holdings as of Sept 30:
The chart is in $k, $659 = $659,000 in crypto, which is still insane considering it should be like $5.5B 👀
And remember, this was before the bank run that led to the collapse of FTX.
According to a leaked balance sheet, by Nov 10 FTX was down to $900M in liquid assets with $8.9B in liabilities.
Their “less-liquid” and illiquid assets total $8.7B, but are largely made up of FTX’s own token, FTT, as well as several coins from the Solana ecosystem which do not have the liquidity for FTX to convert them into cash, like at all.
For example, they list $2.2B in SRM tokens, yet the entire market cap of Serum today is only $97M.
I’m no math genius like Caroline Ellison (Alameda’s former CEO), but something doesn’t add up there 🤔
The new FTX CEO is in charge of liquidating FTX’s assets and trying to return as much money as possible to FTX users and investors, but these revelations suggest that there will not be enough money to make everyone whole.
Only time will tell.
More BOMBSHELLS Dropped in the FTX-Files
According to this thread, it seems like the Bahamian government ordered SBF to hack into FTX’s systems and transfer assets to them after he filed for bankruptcy, and after he left his position as CEO 👀
“In connection with investigating a hack on Sunday, November 13, Mr. Bankman-Fried and [FTX co-founder Gary] Wang, stated in recorded and verified texts that 'Bahamas regulators' instructed that certain post-petition transfers of Debtor assets be made by Mr. Wang and Mr. Bankman-Fried (who the Debtors understand were both effectively in the custody of Bahamas authorities) and that such assets were custodied on FireBlocks under control of Bahamian gov't,” the filing states.
It would be one thing for the government of the nation his company was based in to order him to secure and transfer the assets of his own company to them, but given it took place after he left his CEO position, it’s hard to imagine calling this anything other than a straight up state-sponsored hacking incident.
Not even SBF’s giant “web of influence” will save him from this, I don’t imagine.
The conclusion from all this is that clearly SBF and his companies were just raising and spending and taking and investing money aggressively, without keeping much account of anything, and just hoping they were coming out ahead.
Once he realized that there was actually a multi-billion dollar hole and most of his assets were worthless, he panicked and did whatever he was told because, well.. just imagine the gravity of his situation:
The whole world thought he was a tech genius boy wonder and tons of very serious people and organizations were backing him, and it turns out he absolutely messed up beyond belief.
Now which will be next to drop?
How many of the current top 10 crypto exchanges have done proof of reserves AND liabilities?
Tap your answer below to see if you’re right!
Web3 Pipeline 📢
Gala Games Shooter ‘Superior’ Goes Live on Steam - Gala is a web3 gaming studio formed by former Ubisoft and Insomniac employees; Superior is a blockchain game with NFT components, but as per Steam’s anti-crypto rules, the game will not feature any web3 aspects on their platform. This puts the game in a weird spot since there will also be a version for web3, but Gala has hinted future interoperability may be possible.
Introducing: The Meg-averse - Prince Harry and Meghan Markle inked a deal with Pax World to create their very own metaverse. The ex-royals believe they will be able to transmit their message more effectively with a presence in both the physical and digital worlds.
Binance Moved $2.7B Out Of ‘Proof Of Reserves’ Wallet 24H after Publishing - other assets are supposedly ‘missing’ as well, leading to a lot of speculation around whether or not the world’s top exchange is actually hodling all they say they are. Binance did respond to these accusations however, stating it was standard practice and that they are working with Vitalik to create a ‘Merkle tree proof of reserves’, which will show all their assets and liabilities verified by code. They also imply the tool they build with Vitalik will be available to other exchanges as well.
NFT drops of the day 👀
🌺 LILY | TBA (SOL)
Nov 18 - in expanding the Lotus brand, LILY aims to become the landing page of the new web pushing the boundaries through innovative technology, art and informed community.
🛑 NOTE: drops not promoted/endorsed
✅ DYOR and practice safe minting!
Just look at you looking at them looking at each other 👀
Now imagine you had “gains” 😂
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.