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Coinbase Global Inc.’s junk bonds may have been an early warning sign of FTX contagion. The largest US digital asset trading platform has seen the price of its bonds tumble this year. The drop was mostly due to the crypto winter, but some industry participants said it was an omen.
Binance Holdings Ltd CEO and founder, Changpeng “CZ” Zhao, pledged to raise at least $1 billion for the purchase of distressed assets as he further outlined his plans to support the affected industry. The centerpiece of his plan is to raise partners for a fund aimed at supporting promising but cash-strapped crypto projects, Bloomberg Television’s Haslinda Amin told Thursday in an interview.
Cryptocurrency markets stabilized as Bitcoin traded above $16,000. The world’s largest cryptocurrency by market value is down 70% from the same period last year, when the token was trading just below an all-time high of nearly $69,000. So, it might be wise to avoid talking about cryptocurrencies at the dinner table this Thanksgiving.
Key stories and developments:
FTX Investors Chasing Brady, Shaq – Here Are Their Legal Chances
FTX has turned Jane Street’s obsession with risk into disastrous effects
Cathie Wood Sticks to $1M Bitcoin Call as Others See Route
What the FTX crash suggests on cryptocurrencies and risk
Sequoia Capital apologizes for FTX but defends vetting process
(Time references are New York unless otherwise noted.)
Binance CEO Outlines Crypto Bailout Plan (05:02)
Cryptocurrency billionaire Changpeng “CZ” Zhao plans to raise at least $1 billion for a fund to buy distressed assets, he said Thursday in an interview with Bloomberg Television’s Haslinda Amin. He said he will try to gather partners for the fund aimed at supporting promising cryptocurrency projects that are cash-strapped.
Bankman-Fried Says He’ll Speak at NYT Event (8:12 PM)
Sam Bankman-Fried tweeted that he would be speaking with The New York Times’ Andrew Ross Sorkin at the DealBook Summit in New York next week. A spokesperson for The New York Times said it is currently expecting Bankman-Fried to participate in the interview from the Bahamas. FTX was based in the island nation.
Metaverse Accounting Firm Sucked Into Meltdown (2:42 PM)
An accounting firm that prides itself on being the first to open its headquarters in the metaverse has been accused in a lawsuit of turning a blind eye to a racketeering pattern by FTX, the cryptocurrency exchange that collapsed causing losses in the billions of dollars. Prager Metis CPAs LLC, an auditor for FTX, has been sued by an investor who says he lost nearly $20,000.
Coinbase Debt Seen as Early Warning Sign (2:22pm)
In the wake of the spectacular collapse of Sam Bankman-Fried’s crypto empire, many investors are looking for warning signs that may have heralded the contagion that was about to unleash. One chance? Coinbase Global Inc.’s Junk Bonds
The largest US digital asset trading platform has seen the price of its bonds tumble this year. In early January, the price of one of its most active banknotes was around 92 cents. It then fell to around 77 cents in April before falling to 63 cents during the Terra Luna market crash in May. The bonds traded about 53 cents on the dollar — a level typically associated with distress — in Wednesday morning trading in New York, according to trading data from Trace.
Cryptocurrency Market Activity Crashes (1:17 PM)
Cryptocurrency investors are still sifting through the rubble of the FTX crash, but one thing is already evident: market activity has dropped significantly.
Senators want executives accountable (10:49)
Democratic Senators Elizabeth Warren and Sheldon Whitehouse have asked the Justice Department not to pull any punches as it investigates and tries to hold FTX executives accountable for contributing to the cryptocurrency firm’s demise.
Keepers Like Fidelity Will Attract Users: Novogratz (9:45am)
Crypto billionaire Mike Novogratz said the “crisis of confidence” in the world of digital assets will prompt more cryptocurrency users to seek institutional players like Fidelity Investments.
The founder of Galaxy Digital Holdings Ltd., a crypto financial services company, told CNBC that more people will be putting their money in “secure and reliable custodians.”
Novogratz Says “Bitcoin Won’t Go Away” (8:48)
Mike Novogratz, CEO and founder of Galaxy Digital, told CNBC in an interview that while there was a “bubble” in cryptocurrencies this is a long-term buying opportunity because “Bitcoin is not going away.”
He says what happened to FTX is an indictment of the company and other similar companies that are poorly managed, however it is not an indictment of cryptocurrencies themselves.
Serving Humble Pie This Thanksgiving (8:00am)
A polite company never talks about politics or religion. This Thanksgiving, it might be wise to avoid cryptocurrencies as well.
Last year’s digital asset investors consolidated with the riches of Bitcoin. Then, the token traded just below the all-time high of nearly $69,000 set weeks earlier. By dessert time, would-be cryptocurrencies may have even sold the Baby Boomers on a coin or two.
This holiday season, Bitcoin bulls have less to be thankful for. The largest digital asset has tumbled about 70% since Turkey Day last year. That decline could annoy guests who have accepted, including Baby Boomers persuaded by their younger relatives.
Jane Street alumni drop Wall Street firm’s risk focus at FTX (7:49)
Jane Street Group is known among peers for its obsession with risk and preference for stealth. The Lower Manhattan-based powerhouse of more than 2,000 employees digs into the health of business partners, models potential disasters, autopsies leaks, and prevents staff from commenting publicly, because that, too, poses a danger.
The simplest way to describe the culture that Sam Bankman-Fried and a group of Jane Street alumni have created at FTX: the opposite.
Crypto Crash Offers Recovery Path for Damaged Relationships (6:58)
Devoting days and nights to a gamified digital economy has left a mark on some people’s relationships, turning partners into crypto widows and widowers.
They now have some emotional work to do: In the aftermath of the digital asset chaos, believers are trying to mend what Bitcoin and Bored Ape obsessions have done to intimacy.
Wild Divergence in Bitcoin Predictions Highlights Uncertainty (4:32)
In recent days, long-term goals for the world’s largest token by market value have ranged from $5,000 for strategists BCA Research Inc. to $1 million by 2030 for Ark Investment Management’s Cathie Wood.
The cavernous spread reflects the gnarly question of what further contagion might or might not be expected following the evisceration of Sam Bankman-Fried’s FTX exchange and once-crypto darling trading house Alameda Research.
El Salvador Closer to Bitcoin Bond Issuance (12:05HK)
The country’s presidency has sent lawmakers a digital securities bill, bringing the nation one step closer to raising $1 billion via the world’s first sovereign blockchain security.
Legislation requires a digital assets commission and a Bitcoin funds management agency to oversee cryptocurrency-related debt sales. The proposed blockchain bonds, with a minimum investment of just $100, are intended to help finance the construction of the Bitcoin City project.
New York Governor Signs Moratorium to Curb Crypto Mining (11:10am HK)
Kathy Hochul has signed into law one of the most restrictive laws in the US regulating cryptocurrency mining, with the bill triggering a two-year moratorium on new permits for cryptocurrency mining companies.
“I will ensure that New York continues to be the center of financial innovation, while also taking important steps to prioritize environmental protection,” Hochul said in a statement.
Bankman-Fried says collateral plunges $51B on FTX drop (8:30am HK)
Bankman-Fried, the disgraced founder of now-collapsed cryptocurrency exchange FTX and trading house Alameda Research, apologized to staff in a letter outlining a plunge in “collaterals” to $9 billion from $60 billion.
“I didn’t mean for any of this to happen, and I would give anything to be able to go back and do things again,” she wrote in a message sent to employees Tuesday and obtained by Bloomberg News.
Sequoia Capital apologizes to FTX but defends verification process (7:20HK)
The venture capital firm’s major partners apologized to their investors in a conference call Tuesday for backing FTX, according to people familiar with the meeting.
Roelof Botha, the firm’s global leader, opened the call, and he and his colleagues were rueful for backing the firm, with investments totaling $214 million in FTX.com and FTX.us across two funds . Alfred Lin, the partner who spearheaded the FTX deal, provided an update on the situation. Shaun Maguire, another partner who focuses on cryptocurrencies, provided an overview of the industry.
Cathie Wood Maintains $1M Bitcoin Goal (7:10am HK)
“Bitcoin is coming out of all of this smelling like a rose,” the CEO of ARK Investment Management said while defending his predictions.
Wood also said that the crypto infrastructure “works beautifully”. He added that digital asset manager Grayscale Investments is now the crown jewel of Barry Silbert’s $10 billion Digital Currency Group conglomerate.
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