The Fed Throws Stones Again | Worse Than ENRON – FTX CEO

The Fed Throws Stones Again | Worse Than ENRON – FTX CEO

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2023-02-07 14:10:47

Market situation

US stocks yesterday continued to decline in all three indexes. Futures contracts also show a similar downtrend. Gold and oil prices both fell and fluctuated around 1763 USD/barrel and 81 USD/ounce.

Bitcoin price around 16,700 USD. Altcoins fluctuate slightly.

FTX scared the market and droves of people withdrawing BTC and crypto from exchanges. While the exchanges all had a large amount of BTC leaving, yesterday, suddenly a large amount of BTC was pushed onto the Binance exchange.

ETH was also withdrawn from the exchange, but the amount and speed of withdrawal from the exchange was much less than BTC.

Although the market is scared, long-term BTC investors are almost unaffected. The number of wallets with more than 0.1 BTC and 1 BTC continues to increase sharply. Wallets with more than 1000 BTC showed signs of a slight decrease. Maybe institutional investors want to leave the market but small investors continue to increase and accumulate.

Coinshare data shows that last week there was an additional $42 million in capital into the crypto market from investment funds. In which, most of the money goes to BTC with the figure of $ 19 million. Next is the Short BTC fund with $ 12.6 million, ETH with an additional $ 2.5 million, …

The Fed is continuing to “stone the way”

The cost of rent is a very important part of the CPI, it makes up 40% of this index. Therefore, the Fed is interested in relevant information to consider about raising interest rates. According to data, rents in the United States are still higher than they were a year ago. However, rental returns are falling as landlords lose their pricing power in the face of inflation.

Rents in October increased 4.7% compared to October 2021, the slowest annual increase in 18 months. The median U.S. rent is $1,734. The majority of landlords still said they would continue to raise rents next year, but at a lower rate than recently.

Recently, the president of the Federal Reserve Bank of St. Louis, James Bullard said the central bank still has a lot of work to do before it gets inflation under control. With his view, he called on the Fed to continue to raise interest rates higher because what the Fed is doing now is not enough. Using the so-called Taylor Rule for monetary policy, Mr. Bullard suggested the appropriate range for lending rates could be in the 5%-7% range, well above current levels as well as unofficial projections. of the Fed.

The market and investors are still worried that high interest rates could cause the economy to go into recession. They expect the Fed to slow down the rate hike, but the Fed seems to be monitoring the market’s reaction after the statements of the Fed presidents of the states.

As for the election so far, although there are no official results, the majority of seats in the Senate still belong to Republicans. The Democrats have the majority of seats in the House of Representatives. Yesterday, House Speaker Nancy Pelosi announced that she would not run for re-election as her congressional leader, ending a two-decade streak as the top Democrat in the House of Representatives. saw her become the first woman to lead the council.

However, she also said when speaking in the House of Commons that she would remain a member of Congress and serve the rest of her term.

Update the FTX information from the court

Newly appointed FTX CEO John Ray III to lead the company during the bankruptcy and had a period of reviewing the company’s books. He had to declare that in his 40 years of restructuring and legal experience, he had never seen a complete failure of control of the company and the complete lack of reliable financial information as described. happened at the FTX Group. He said this because he saw a complete lack of reliable data and a lack of financial protections.

John Ray III said that FTX lacks adequate human resources, cybersecurity, accounting and auditing teams. Ray revealed that he does not trust the balance sheet statements of Alameda, FTX, or their subsidiaries.

He also added that FTX used the company’s money to buy houses for the benefit of its employees. What is strange, however, is that certain properties are recorded as being personally owned by certain employees as well as Sam. This makes investors think of Sam Bankman – Fried’s penthouse in the Bahamas.

In addition, an official statement in Chapter 11 bankruptcy filing, John Ray III also revealed Bankman Fried’s continued embezzlement of funds. According to the filing, Alameda Research loaned Bankman-Fried $1 billion directly, while FTX chief technical officer Nishad Singh also received a $543 million loan from the company.

The structure of FTX companies is also extremely complex. Ray III identifies four “silos,” covering a range of different businesses that make up the FTX Group. The “WRS” silo includes subsidiaries of West Realm Shires Inc., which include FTX US, LedgerX, FTX US Deriators, FTX US Capital Markets and Embed Clearing.

Alameda Research is an independent silo on file with its own subsidiaries, while Clifton Bay Investments LLC and Ltd, Island Bay Ventures Inc. and Debtor FTX Ventures Ltd under the “Ventures” silo. The final “Dotcom” silo includes FTX Trading Ltd and exchanges that do business under the umbrella of

According to Ray III filings, all silos are controlled by Bankman-Fried, while the small dividends are held by former FTX chief technology officers Zixiao “Gary” Wang and Singh. The WRS and Dotcom silos have third-party equity investors including a wide range of hedge funds, endowments, sovereign wealth funds and families that have been affected by the collapse of the WRS and Dotcom companies. FTX.

Companies in this group are also unable to perform daily reconciliations of crypto holdings and use software to conceal misuse of client funds. Alameda already has a “secret immunity” from FTX liquidation protocols. This means that Alameda when trading on FTX will not be liquidated, no matter how reduced the order, even if it becomes negative. Mr. Ray III found that cold wallets containing $740 million in cryptocurrency were collected, but it is not clear to which group the money belongs because there is no clear accounting paper.

Finally, Binance’s CZ also spoke about FTX. He said Sam Bankman-Fried was in a desperate situation when he called him for a bailout. And if Binance can’t help FTX, maybe no one else can. He also suggested that Sam may have asked for help from many other people before but no one agreed.

The community is concerned about Solana

Solana announced her financial loss when FTX collapsed. However, the community does not yet know how these damages will affect the Solana Foundation’s operations.

Another thing that has just been released from the court document makes investors involved with Solana continue to worry. According to the leaked balance sheet, Alameda is holding $292 million in unlocked SOL, $863 million in locked SOL, and $41 million in SOL collateral. The number of Solanas held by Alameda is very large. Therefore, investors are worried that selling pressure of SOL will continue if Alameda’s assets are liquidated upon bankruptcy.

Some exchanges, like Binance, have moved to stop sending stablecoins such as USDC, USDT through the Solana network. Other exchanges such as OKX and Bybit have already canceled sending stablecoins through the Solana network. It is possible that exchanges are concerned that the collateral of stablecoins on Solana is not guaranteed 1:1 as promised.

According to on-chain data, the supply of Solana-USDC is 62% larger than the supply of Solana-USDT. The total amount of USDC in circulation on Solana amounts to 5 billion USDC ($5 billion), or 11% of the total USDC market cap.

In response to investor concerns, Circle company (the company that issues USDC) then took to Twitter to announce that USDC on Solana is working as usual and there are no issues with issuance or redemption. stablecoins. USDC can always exchange 1 for 1 for USD any amount and at any time.

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