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Jump Trading’s cryptocurrency arm said it remains “well capitalized” after FTX and Alameda Research filed for Chapter 11 bankruptcy protection earlier this week.

On Saturday afternoon, Jump Crypto tweeted, “We, like all of you, were shocked by the events that unfolded over the past week. Jump’s exposure to FTX was managed in accordance with our risk framework and we remain well capitalized.”

Jump Trading operates one of the largest high-frequency trading operations in the world; its crypto arm Jump Crypto focuses on infrastructure and crypto venture investments.

“This is a massive blow to the industry, but we continue to believe in this space and work alongside others building towards its future,” Jump said in a follow-up tweet. Its total exposure, potential losses and capitalization amount remain unknown.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• Financial Times publishes leaked FTX balance sheet dated to Thursday, November 10, 2022 
• ~$900mm liquid assets to ~$8,860mm liabilities, a ~9.85x dislocation contrary to disgraced former CEO Sam Bankman-Fried’s tweets earlier this week 
• Pro forma liquid assets adjusted for Robinhood stake and Friday evening’s attack would reflect a sub 1 cent recovery, excluding less liquid and illiquid assets
• Latest development in FTX”s ongoing fraud and subsequent bankruptcy investigation

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FTX Digital Markets CEO Ryan Salame is sticking around the bankrupt company to salvage what’s left and has hired lawyers amid the bankruptcy chaos, people familiar with the matter told The Block.

Additionally, former Alameda Research CEO Sam Trabucco, who stepped stepped down in August, is hiring a lawyer. He was replaced by Caroline Ellison, who is among those in Sam Bankman-Fried’s inner circle. 

Salame joined FTX a little more than a year ago, and was head of OTC for Alameda Research for two years prior to that. Salame is staying on in the position to try to salvage what’s left of FTX.

FTX filed for bankruptcy yesterday and former CEO Sam Bankman-Fried has not officially been located, though reports say he is in the Bahamas.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

In total, the documents find that FTX Property Holdings spent $74,230,193 on property in the Bahamas over 2022. The bulk of that money, $67,440,193.99, went to entities surrounding Albany Bahamas, a luxury condo resort in New Providence.

The document, moreover, notes “one purchase of a condominium at One Cable Beach for 2 million made by Sam Bankman-Fried directly in late 2021.” For reference, the Bahamian dollar is pegged to and maintains parity with the U.S. dollar. One Cable Beach is another beachside luxury condominium complex.

FTX is known for its unique communal setup in the Bahamas, where teammates at the firm and other companies with ties to FTX work and live side by side. The Caribbean luxury oasis is striking, considering Bankman-Fried’s commitment to effective altruism and much-promoted indifference to the trappings of wealth.

Those properties were purchased outright, not rentals, leaving the question unanswered as to what happens with that property when it was for a company that is effectively shutting down. FTX and a cluster of linked entities have also recently filed for bankruptcy protections, making outstanding assets a critical point of contention for users who have been locked out of their funds. Those include FTX employees, who the firm reportedly pressured to keep their savings on the exchange.

Two days ago, the Securities Commission of The Bahamas froze FTX Digital Market’s assets and appointed a liquidator. 

Current FTX leadership could not be reached for comment. Representatives for Albany Bahamas had not returned a request for comment as of publication time.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

FTX confirmed Saturday afternoon that there was “unauthorized access” to crypto it is holding, following a reported hack.

FTX’s general counsel Ryne Miller tweeted a statement from new interim CEO John Ray, saying “we are in the process of removing trading and withdrawal functionality and moving as many digital assets as can be identified to a new cold wallet custodian. As widely reported, unauthorized access to certain assets has occurred.”

Ray also says the firm is “coordinating” with law enforcement and regulators. The statement follows reports of a hack of user funds late Friday night, including large on-chain movements of funds from FTX’s wallets.

The exchange went bankrupt earlier this week following a meteoric descent. That bankruptcy is on track to leave many users locked out of their funds indefinitely, making their transit across wallets a matter of tremendous interest for creditors.

Ray replaces Sam Bankman-Fried, the exchange’s founder and, until days ago, CEO, who has rapidly fallen from grace as more scandals have emerged from the wreckage of his firms.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Binance CEO Changpeng Zhao says he will be loosening up his “policy to not comment on competitors (we call industry peers) publicly” following the collapse of FTX.

“Going forward, I will break this policy a bit and be more vocal about issues I see in the industry,” he continued.

Zhao made his comments in a Twitter thread in which he pointed to tweets he’d made in July critical of FTX’s outstanding loans.

The thread is in many ways a victory lap for Zhao, whose feud with FTX CEO Sam Bankman-Fried weeks ago initially set off the chain of events that led to FTX’s high-profile collapse this past week. While denying he masterminded the collapse, Zhao nearly acquired the rival exchange as it was happening.

Zhao has also not exactly shied away from controversy.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

FTX had only $900 million in liquid assets against $8.9 billion in liabilities on the eve of bankruptcy, the Financial Times reports.

Citing investment materials, the report noted that the largest easily sellable assets available to FTX were $470 million of Robinhood shares owned via an outside corporate entity belonging to CEO Sam Bankman-Fried.

Despite being formally based outside of the U.S., $5.1 billion of the liabilities FT reported were in U.S. dollar balances.

The crypto exchange’s collapse into bankruptcy over the past week has captivated the financial world. Crypto assets belonging to FTX’s sister trading firm Alameda Research went into on-chain motion early this morning. A wide web of assets associated with the network of firms has been drained from accounts.

Given the vast hole in FTX’s balance sheet as well as the history of crypto exchange failures locking up user deposits, creditors face an uncertain future.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Sen. Pat Toomey criticized the the slow process of passing U.S. crypto trading regulations.

Hostility and a lack of transparency by the SEC, alongside a failure to pass regulatory guardrails, has “generated a debilitating amount of legal uncertainty,” the Pennsylvania Republican wrote on Twitter on Friday.

“These failures have driven crypto development to foreign jurisdictions that have little or insufficient regulation,” he added, referencing the collapse of Bahamas-based failed crypto exchange FTX.

Toomey posited that had there been a “sensible, legislatively authorized, American regulatory framework for digital assets,” the impact of the bankruptcy on Americans may have been mitigated. 

The comments come after a torrid week in the crypto industry and shocking revelations about one of the world’s largest crypto exchanges. A liquidity crisis brought on by revelations about its balance sheet pushed FTX toward insolvency. Binance, which signed a letter of intent that could have led to an acquisition, ultimately passed on the deal, citing due diligence concerns as well as reports of investigations by American regulators.

FTX and sister firm Alameda filed for Chapter 11 bankruptcy protection on Friday, citing balance sheet black holes of as much as $8 billion. 

Ironically, disgraced FTX CEO Sam Bankman-Fried had been working with the U.S. Senate to create crypto regulations. Bipartisan authors put forward legislation that would increase oversight of cryptocurrencies considered to be digital commodities in the U.S. They still plan to move forward with the bill, The Block reported earlier this week.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Bitfinex published details of its reserves on Friday, joining a stream of centralized crypto exchanges increasing their transparency following FTX’s high-profile implosion. 

The exchange’s holdings include 204,338 BTC ($3.4 billion) and 1.2 million ETH ($1.5 billion), according to a Twitter post from Bitfinex CTO Paolo Ardoino. The tweet linked to a list of 135 wallet addresses hosted on GitHub. 

“Bitfinex also developed in the past an opensource library called Antani,” Ardoino tweeted. “We plan to revive it and have a way for users to cryptographically verify their balances respecting their privacy.”

The crypto industry was thrown into turmoil this week as FTX’s finances unravelled over the course of a few hectic days, fueled by concern over the exchange’s ties with sister trading firm Alameda Research. Binance, the world’s biggest crypto exchange, offered to buy its struggling rival’s assets on Tuesday, before walking away a day later after examining FTX’s finances. 

Several crypto exchanges decided to offer more details on their reserves as FTX teetered on the brink of bankruptcy, before succumbing on Friday. Bitfinex joins Binance, OKX, Crypto.com, Kucoin and Bybit in promising more transparency in bids to boost user confidence. 

Still, reserves only provide part of the picture of an exchange’s financial health, as they say nothing about a company’s liabilities. 

The crypto market stress briefly caused tether, the stablecoin operated by another Ardoino company, to drop below its peg to the U.S. dollar this week. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Wrapped tokens on Solana issued by FTX or Alameda Research are experiencing sharp declines after both entities filed for Chapter 11 bankruptcy protection.

The price of wrapped bitcoin on Sollet is down 77% over the past 24 hours. Its current price is $3,866 — a far cry from the price of native bitcoin’s current $16,819 — according to CoinGecko, which is displaying a notice on its website that reads: “soBTC tokens are wrapped BTC tokens issued by FTX or Alameda. Both these entities have filed for Chapter 11 bankruptcy and the BTC tokens are no longer redeemable.”

Wrapped ether on Sollet is only down 9% to $1,138 over the same time frame. Native ether is trading at $1,255. CoinGecko is displaying the same warning for soETH as for soBTC.

Wrapping coins, such as bitcoin or ether, on Solana makes those assets available to use on the Solana blockchain — opening them up to usage in Solana’s decentralized finance ecosystem.

Many Solana-wrapped assets were custodied by FTX or Alameda, according to open-source portfolio tracker Rotkiapp’s founder on Twitter, which added: “That means they are no longer redeemable and will probably go to 0.” Pseudonymous crypto writer Aylo also noted that “Solana DeFi will have to absorb this loss.”

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.