Singapore’s state-owned investor Temasek Holdings Pte wrote down its $275 million investment in FTX, saying it had “misplaced” its belief in Sam Bankman-Fried and would learn from the experience.
(Bloomberg) — Singapore’s state-owned investor Temasek Holdings Pte wrote down its $275 million investment in FTX, saying it had “misplaced” its belief in Sam Bankman-Fried and would learn from the experience.
Bankman-Fried said in a tweet that he made a mistake on the crypto exchange’s leverage levels — it was $13 billion, not about $5 billion. The bankrupt platform will be in Congressional crosshairs next month as House and Senate panels probe the company’s collapse.
More crypto lenders are feeling the pain as contagion spreads. BlockFi Inc. is preparing to file for bankruptcy, according to people with knowledge of the matter. Gemini Trust Co., the crypto platform run by the Winklevoss brothers, paused withdrawals on its lending program. Coindesk reported that bankrupt lender Voyager Digital may find a new rescuer in Binance.
Key stories and developments:
- Winklevoss Faithful Have a $700 Million Problem in Genesis Halt
- Silbert’s Once-$10 Billion Crypto Empire Is Showing Cracks
- Singapore’s Temasek Writes Down $275 Million FTX Investment
- FTX Wipeout Is Fresh Test of Nerves for Asia’s Crypto Regulators
(Time references are New York unless otherwise stated.)
Binance Is Preparing to Bid for Voyager Digital, CoinDesk Says (4:10 p.m HK)
Binance.US is preparing to bid for bankrupt crypto lender Voyager Digital, CoinDesk reported, citing a person familiar with the matter.
Voyager has been trying to sign a deal to sell itself to one of the bidders that lost out in an auction won by FTX. The sale to FTX valued at about $1.4 billion collapsed after the former’s own bankruptcy.
Voyager filed for bankruptcy protection in July after a failed attempt by FTX-affiliated Alameda Research to bail it out with a revolving line of credit.
FTX Wipeout Is Fresh Test of Nerves for Asia Regulators (4:00 p.m. HK)
Crypto’s latest existential crisis flared amid far-reaching planned changes in the digital-asset rulebooks of Asian centers including Hong Kong and Singapore. Officials in both jurisdictions and further afield face calls to ensure greater transparency, especially on customer assets.
Hong Kong two weeks ago pivoted to a more welcoming stance, detailing plans to become a crypto hub with legalized retail trading and dedicated exchange-traded funds. Singapore, in contrast, is clamping down on retail crypto trading, focusing instead on productive applications of blockchain technology.
Both appear to be sticking with their diverging regulatory paths.
El Salvador’s Bukele Vows to Buy Bitcoin Everyday (1:30 p.m. HK)
President Nayib Bukele tweeted, “We are buying one #Bitcoin every day starting tomorrow,” without elaborating.
The country’s 2,381 Bitcoins have suffered a huge drop in value amid the recent selloff of the cryptocurrency. However, the nation’s finance minister said in an interview last week that the government has not sold any of its Bitcoin and has therefore not realized any loss. Tron founder Justin Sun said he’d join Bukele in buying one Bitcoin per day.
Bankman-Fried Tells His Side of FTX-Collapse Story in Tweets (1:10 p.m. HK)
On Wednesday, Bankman-Fried added a further 18 tweets to a meandering thread he started at the beginning of the week.
The posts, published at sporadic intervals, have combined apologies for his failings with his perspective on what went wrong at the companies he founded and ran. They add to a previous series of cryptic posts. “We got overconfident and careless,” he said.
Temasek Writes Down $275 Million FTX Investment (8:50 a.m. HK)
Singapore’s state-owned investor said in a statement that its belief in Sam Bankman-Fried was likely “misplaced” after it invested $210 million in FTX International and $65 million in FTX US across two funding rounds. It added that it has no direct exposure to cryptocurrencies remaining.
Temasek said it had conducted an “extensive due diligence process” on FTX and that its audited financial statement showed the company to be profitable. It added that while the writedown has no significant impact on its overall performance, “we treat any investment losses seriously and there will be learnings for us from this.”
Winklevoss Faithful Have a $700 Million Problem in Gemini (8:00 a.m. HK)
Customers of crypto exchange Gemini, founded by brothers Cameron and Tyler Winklevoss, are caught in the fallout from FTX due to a high-yield product called Gemini Earn — which has just Genesis Global listed as a single accredited borrower that passed its vetting process. Gemini halted redemptions from the product on Wednesday after Genesis suspended withdrawals.
That left in limbo a program that, according to a person familiar with the matter, has $700 million of customer money tied up in it. Whether Gemini Earn customers ever get their money back remains to be seen. And much depends on Genesis itself, which has hired advisers to explore all possible options, including raising new funding.
Silbert’s Crypto Empire Is Showing Cracks (7:05 a.m. HK)
Suspended withdrawals at cryptocurrency brokerage Genesis have cast an unwanted spotlight on Barry Silbert, the man at the helm of the Digital Currency Group empire.
Last year, DCG’s valuation reached $10 billion, after it sold $700 million of stock in a private sale led by SoftBank. In addition to Genesis, it has more than 200 companies in its portfolio including Grayscale Investments, which offers the world’s largest crypto fund. DCG is also the parent of crypto-mining service provider Foundry Digital, Coindesk and exchange Luno.
ASX Delays Blockchain Project (7:00 a.m. HK)
Australia’s main exchange is reassessing plans to swap its settlement and clearing platform with a blockchain-based system, suspending work on the years-long project that was already plagued by delays.
The high-profile plans had been seen as a major coup for the blockchain industry, but came under scrutiny following a string of delays, several million of dollars of investments and leadership reshuffles at the exchange.
BlockFi Said to Plan Bankruptcy (3:34 p.m.)
Cryptocurrency lender BlockFi Inc. is preparing to file for bankruptcy within days, according to people with knowledge of the matter who asked not to be named because discussions are private.
The crypto lender paused client withdrawals, citing bankruptcy uncertainties with FTX, while saying it had adequate liquidity and was exploring options with outside advisers.
Congress to Probe FTX Collapse (3:18 p.m.)
FTX and its former chief executive officer, Democratic mega-donor Bankman-Fried, will be in congressional cross hairs next month as House and Senate panels probe the company’s collapse.
The House Financial Services and Senate Banking committees plan December hearings that will look at FTX’s sudden demise and its ripple affects in the broader digital asset industry. Democrats and Republicans alike have expressed anger about the current state of the crypto marketplace.
SBF Mistaken About FTX’s Leverage Levels (2:25 p.m.)
Bankman-Fried says he was mistaken about the cryptocurrency exchange’s leverage levels, thinking it was about $5 billion when it was $13 billion.
In his latest series of tweets explaining how FTX imploded, Bankman-Fried says the company got “overconfident and careless.”
Gemini Exchange Back Online (1:31 p.m.)
Gemini says its exchange is fully back online and that all customer funds held on it are “available for withdrawal at any time,” it said in a tweet.
Genesis Hires Alvarez, Cleary Gottlieb (10:29 a.m.)
Crypto brokerage Genesis is working with financial and legal advisers to explore options as it halts redemptions and originations at its lending business amid a liquidity crunch.
The company hired Alvarez & Marsal and law firm Cleary Gottlieb Steen & Hamilton for advice, according to a spokesperson for Digital Currency Group, the parent of Genesis.
Winklevoss’ Gemini Pauses Withdrawals (8:35 a.m.)
Gemini Trust Co., the cryptocurrency platform run by the Winklevoss brothers, has halted withdrawals from its Earn program after partner Genesis Global did the same.
This does not impact any other Gemini products and services, the company said in a statement.
Genesis Suspends Withdrawals (8:00 a.m.)
Crypto brokerage Genesis is suspending redemptions and new loan originations at its lending business after facing what it described as “abnormal withdrawal requests” in the aftermath of the collapse of FTX.
The withdrawal requests exceeded current liquidity at Genesis Global Capital, the lending arm, according to interim Chief Executive Officer Derar Islim. Genesis has hired advisers to explore all possible options, including raising new funding, and will deliver a plan for its lending business next week, Islim said.
–With assistance from Sunil Jagtiani and Dara Doyle.
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