Crypto News Daily – Dec 10, 2022

Last Updated on December 10, 2022

Audit shows has enough Bitcoin reserves:

Crypto Scammers Are Getting More Creative, Microsoft Warns of New Threats:

Class Action Lawsuit Against FTX’s Celebrity Promoters and Sam Bankman-Fried Is Quietly Dropped:

Digital collectibles firm Forum3 raises $10m in seed funding:

“The Sin of Shitcoinery”

Michael Saylor on the FTX/SBF Fraud

Bankman-Fried’s company was responsible for issuing a token called FTT, which offered various benefits to users of his exchange. Once a top 25 cryptocurrency, the asset collapsed by over 90% in value during a run on FTX last month, after which its bankruptcy quickly followed.

According to Saylor, Bankman Fried’s use of FTT and other tokens as collateral for taking out loans was “particularly diabolical,” given their relative illiquidity. However, traditional banks such as Goldman Sachs would refuse to lend money on such risky collateral.

As such Bankman-Fried turned “to himself” – using Alameda to “borrow” FTX users’ funds on the FTT collateral. Then, Alameda used those funds to prop up the price of FTT, allowing the company to borrow even more funds and slide money into Sam Bankman-Fried’s holding company, Paper Bird.

“Bankman-Fried generated $10 billion in an unregistered security, and then just borrowed $10 billion secretly from his depositors,” explained Saylor. “Gambled it, traded it, spent it, lost it. He scraped billions from unsuspecting investors in Silicon Valley. They should’ve known better.

Ultimately, Saylor believes FTX’s extremely low trading fees were a ploy to lure traders to put assets on the platform, which SBF could then freely trade with.