All posts tagged: ftx

Turbulent Year for Cryptocurrencies Could Spur Progress Towards Regulatory Norms for Digital Assets in 2023

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Even as India has taken steps towards the launch of digital currency with components based on blockchain technology, the scenario with respect to cryptocurrency continues to be debated with the RBI pointing to the risks from private cryptocurrencies and no move yet for their regulation. The dramatic collapse of the trading platform FTX added to worries but there are people who feel that disruptions in crypto market do not take away the inherent value of the blockchain and that such products give end users control over their transactions. Blockchain technology enables the existence of cryptocurrency. Reserve Bank of India has been forthright about its views on cryptocurrency and its Governor Shaktikanta Das said last month that cryptocurrencies should be “prohibited” and that if they are allowed to grow “next financial crisis” will come from private cryptocurrencies. He said they have absolutely no underlying and it is a speculative activity. “I still hold the view that it should be prohibited. Countries have been taking different views, but our view is that it should be prohibited. If you …

RBI Suggests Common Approach to Crypto Assets to Avoid Potential Financial Risks

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To address potential financial stability risks and protect investors, it is important to arrive at a common approach to crypto assets, the Financial Stability Report released by RBI said on Thursday. In this context, various options are being considered internationally, it said. One option is to apply the same-risk-same-regulatory-outcome principle and subject them to the same regulation applicable to traditional financial intermediaries and exchanges, the report said. Another option is to prohibit crypto assets, since their real life use cases are next to negligible and the challenge is that different countries have different legal systems and individual rights vis-à-vis state powers, it noted. A third option is to let it implode and make it systemically irrelevant as the underlying instability and riskiness will ultimately prevent the sector from growing, it said. The third option, however, is fraught with risks as the sector may become more interconnected with mainstream finance and divert financing away from traditional finance with broader effect on the real economy, the report said. Regulating new technology and business models after they have …

Indian DeFi-Enthusiasts Call FTX Collapse ‘Good on Macro Level’, Here’s Why

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FTX, the US-based crypto platform that succumbed to liquidity crunch and shook-up the crypto market in November, led to the wipe-off of nearly $200 billion (roughly Rs. 16,53,499 crore) from the market. The drastic reaction from investors who pulled back capital from digital assets left several crypto firms gasping for breath. As per Indian Web3 builders, this FTX collapse, despite its severity, must be seen as a ‘blessing in disguise’ that has already begun to push for more finetuned financial structure around crypto that would slash its often-criticised element of volatility. “The companies that do not have a strong foundation and have strong investments will be flushed out,” said Tarusha Mittal, the COO and Co-Founder of Web3-focussed app store, Dapps and group farming and staking protocol, UniFarm. In conversation with Gadgets 360, Mittal said that crypto players and investors need to realise, now more than ever, that Web3 is all about decentralisation. “The FTX collapse is good on the macro level for the industry. FTX collapse is a good reminder that crypto is all about removing …

Sam Bankman-Fried released on $250 million bail while the FTX fraud case continues

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CAROLINE ELLISON, 28, is charged with and has pled guilty to two counts of conspiracy to commit wire fraud, each of which carry a maximum sentence of 20 years in prison; two counts of wire fraud, each of which carry a maximum sentence of 20 years in prison; one count of conspiracy to commit commodities fraud, which carries a maximum sentence of five years in prison; one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison; and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. GARY WANG, 29, is charged with and has pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit commodities fraud, which carries a maximum sentence of five years in prison; and one count of conspiracy to commit securities fraud, which …

FTX Founder Sam Bankman-Fried Allowed $250 Million Bond, House Arrest

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The cryptocurrency entrepreneur Sam Bankman-Fried can post $250 million (nearly Rs. 2, 070 crore) bond and live in his parents’ home in California while he awaits trial on charges that he swindled investors and looted customer deposits on his FTX trading platform, a judge said Thursday. Assistant US Attorney Nicolas Roos said in the US District Court in Manhattan that Bankman-Fried, 30, “perpetrated a fraud of epic proportions.” Roos proposed strict bail terms, including a $250 million bond and house arrest at his parents’ home in Palo Alto, California. An important reason for allowing bail was that Bankman-Fried agreed to waive extradition, Roos said. Magistrate Judge Gabriel W Gorenstein agreed to the bond and also approved the house arrest proposal. He also said Bankman-Fried would be required to get an electronic monitoring bracelet before leaving the Manhattan courthouse. Bankman-Fried wore a suit and tie in court and sat between his attorneys. Two US marshals sat behind him. Bankman-Fried, arrested in the Bahamas last week, was flown to New York late Wednesday after deciding not to challenge his extradition. While …

Binance Faces Weeks of Challenges After Collapse of Rival Crypto Exchange FTX : All Details

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Even by the extreme standards of cryptocurrency trading, the past few weeks have been a wild ride for Binance, the world’s biggest exchange for crypto assets. After the collapse of its rival FTX in a hail of allegations of fraud and criminality last month, trust in the entire sector has crumbled. Customers pulled more than $3 billion (roughly Rs. 24,000 crore) from Binance in a single day last week as part of a three-day frenzy that saw more than $6 billion (roughly Rs. 48,000 crore) withdrawn. On Friday, accountancy firm Mazars, engaged by Binance to provide a “proof of reserves” report, abruptly halted work with all crypto firms because of “public misunderstanding” of what they were providing. A “proof of reserves” report is not a full audit and gives no information about liabilities. Media reports suggested US prosecutors were still weighing up money-laundering and sanctions-busting charges against the company and possibly its co-founder and CEO Changpeng Zhao. The firm has refused to comment on the inquiry. The stakes could not be higher. “It is absolutely vital …

Sam Bankman-Fried Flies to US After Extradition, Two Associates Plead Guilty to Fraud

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FTX founder Sam Bankman-Fried left the Bahamas on Wednesday on a US-bound flight to face fraud charges as federal prosecutors announced that two of his former associates had pleaded guilty to charges and were now cooperating with the government. Manhattan US Attorney Damian Williams said in a video posted on Twitter late Wednesday night that Caroline Ellison, former CEO of Alameda Research, and Gary Wang, co-founder of FTX, had pleaded guilty to defrauding investors in the crypto trading platform. The revelation that two of Bankman-Fried‘s closest former associates had decided to cooperate with the government significantly ramped up pressure on the former billionaire. Williams said that Bankman-Fried is now in FBI custody and on his way to the U.S and urged others involved in the alleged fraud to come forward. “If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” William said. “We are moving quickly and our patience is not eternal.” “I also said that last week’s announcement would not be our last, and let me be …

Sam Bankman-Fried’s former friends are now cooperating in the FTX fraud case

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Caroline Ellison and Zixiao “Gary” Wang, two executives in Sam Bankman-Fried’s fallen crypto empire, have pleaded guilty to federal charges and are cooperating with prosecutors. The news was announced late Wednesday by Damian Williams, the US Attorney for the Southern District of New York. Williams didn’t specify the charges the two pled to but said the guilty pleas were related to their roles as insiders at FTX and its sister company Alameda Research. Wang was a co-founder of the FTX cryptocurrency exchange and owned 10 percent of Alameda Research. (Bankman-Fried owned the other 90 percent.) Ellison served as CEO of Bankman-Fried’s trading company Alameda Research. Ellison pleaded guilty to seven counts, according to The Washington Post. She faces up to 110 years in prison, WaPo says. Wang pleaded guilty to four counts and faces up to 50 years in prison. Bankman-Fried and Wang allegedly gave Alameda and Ellison “carte blanche” to use funds deposited by FTX customers At its peak, FTX moved $20 billion daily in trades, according to the CFTC. Bankman-Fried and a select …

Private Cryptocurrencies’ Growth Can Precipitate Next Financial Crisis: RBI Governor

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Reserve Bank Governor Shaktikanta Das on Wednesday warned that allowing private cryptocurrencies to grow can precipitate the next financial crisis. Speaking at the BFSI Insight Summit in Mumbai, Das also said the government and the central bank have been working in a coordinated manner to tame inflation and the Centre is “equally serious” about curbing price rise. On private cryptocurrencies like Bitcoin, Das reiterated the RBI’s demand for a complete ban, saying such instruments do not have any underlying value and are speculative in nature. “It’s a 100 percent speculative activity, and I would still hold the view that it should be prohibited. If you try to regulate it and allow it to grow, please mark my words, the next financial crisis will come from private cryptocurrencies,” he said. “Cryptocurrencies have huge inherent risks from macroeconomic and financial stability (perspective) and we have been pointing it out,” he added. The RBI governor further said the developments over the last one year, which include the latest crash of cryptocurrency exchange FTX, which has been termed as one …

Sam Bankman-Fried Signs Legal Papers Clearing Way for US Extradition to Face Fraud Charges, Official Says

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FTX founder Sam Bankman-Fried has signed legal papers paving the way for his extradition from The Bahamas to the United States, where he faces fraud charges over the cryptocurrency exchange’s collapse, a Bahamas official said on Tuesday. Doan Cleare, The Bahamas’ acting commissioner of Corrections, told Reuters the documents were signed around noon on Tuesday. A hearing in Bankman-Fried’s case will take place on Wednesday at 11:00am EST (9:30pm IST), a court official told Reuters. Wednesday’s proceeding could set the stage for the 30-year-old cryptocurrency mogul to depart the Caribbean nation, after several days of confusion about the status of Bankman-Fried’s extradition. A US-based lawyer for Bankman-Fried did not respond to requests for comment. A person familiar with the matter said Bankman-Fried intends to consent to extradition. Bankman-Fried has acknowledged risk-management failures at FTX, but has said he does not believe he has criminal liability. A spokesman for the US attorney’s office in Manhattan declined to comment. Bankman-Fried was arrested last week in The Bahamas, where he lives and where FTX was based, after a …