This Week on Crypto Twitter: SBF Arrested! Binance Withdrawals Spike! Former President Pitches NFTs!
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Just when you thought the torrent of gossip was starting to subside in Cryptoville, this week crypto Twitter was slammed by a barrage of news that turned it back into its usual self: a festering hive of gossip, hot takes, judgements and speculation.
Two of the three bombshells dropped on Monday, giving people the whole week to chew on them. The first was the arrest of disgraced former FTX CEO Sam Bankman-Fried in the Bahamas. He was charged with conspiracy, wire fraud, money laundering by the Justice Department, and securities violations by the SEC, among others.
That same day, a leaked email from SBF to the Attorney General of The Bahamas, dated from November 10, revealed that the former multi-billionaire claimed he was “cautiously optimistic that [FTX] will be able to survive the turmoil and have enough liquidity for all customer withdrawals.”
Given the chronology of events, we can—with the added benefit of hindsight—deduce that he was probably definitely lying.
The official statement from the office of the Attorney General of The Bahamas following his arrest said: “it was deemed appropriate for the Attorney General to seek SBF’s arrest and hold him in custody pursuant to our nation’s Extradition Act.” Yikes!
Mattie Fairchild, a director of marketing for crypto metaverse gaming platform Core Games, highlighted the distinct atmosphere on Twitter that day.
“SBF just got arrested” twitter feels a LOT like “did you feel that earthquake in SF rn?” twitter
Because of his arrest, U.S. Representative Alexandria Ocasio-Cortez said she was “disappointed” that SBF would no longer be attending a hearing in DC that was scheduled for this week. It should be noted that SBF ducked out of appearing at the hearing earlier on Monday, citing concerns that his appearance would cause a “paparazzi effect.” Damned if he does, damned if he doesn’t.
Bankman-Fried was set to testify before the House tomorrow. Tonight he was arrested.
While I am disappointed we will not have the opportunity to present our line of questioning, we look forward to more information coming to light and justice being served in this case. https://t.co/HS9u1n5Kur
Meanwhile, crypto-friendly U.S. Senator Cynthia Lummis called the FTX saga a case of “good, old-fashioned, fraud.”
People lost their hard-earned money, and they deserve justice for any wrong doing. I am hopeful my colleagues share my desire to pass the Lummis-Gillibrand Responsible Financial Innovation Act. This comprehensive legislation would prevent future collapses like FTX.
As if all of this wasn’t bad enough, SBF also found himself in hot water from League of Legends publishers Riot Games. You know the old saying, “the higher they rise the harder they fall”? It’s definitely not applicable to SBF’s gaming skills.
What’s up with Binance?
The other big talking point this week was Binance’s increasing infamy. On Monday, Tom Wan, an analyst at crypto investment product firm 21.co, tweeted that a lot of money appeared to be leaving the centralized exchange.
24 hours later, the exchange had processed net outflows of well over 2 billion between Monday and Tuesday, the most since June, according to Nansen data.
On Wednesday, it came to light that CEO Changpeng “CZ” Zhao has allegedly told staff he expects the next few months “will be bumpy.” The chief remained poker-faced as outflows were mounting.
We saw some withdrawals today (net $1.14b ish). We have seen this before. Some days we have net withdrawals; some days we have net deposits. Business as usual for us.
I actually think it is a good idea to “stress test withdrawals” on each CEX on a rotating basis. 💪