Connect with us


Crypto Exchange FTX Collapses, Files for Bankruptcy

Avatar for VORNews



Crypto Exchange FTX Collapses, Files for Bankruptcy

FTX took less than a week to go from the world’s third-largest cryptocurrency exchange to bankruptcy. The embattled cryptocurrency exchange sought bankruptcy protection.

On Friday morning, FTX, the hedge fund Alameda Research, and dozens of other affiliated companies filed for bankruptcy in Delaware. FTX US, which was not expected to be part of any financial rescue, was also included in the company’s bankruptcy filing.

According to the company, CEO and founder Sam Bankman-Fried has resigned. Bankman-net Fried’s worth was recently estimated to be $23 billion, and he has been a major political donor to Democrats. According to Forbes and Bloomberg, which closely track the net worth of the world’s richest people, his net worth has vanished.

“I was shocked to see things unravel the way they did earlier this week,” Bankman-Fried wrote on Twitter.

The unravelling of FTX is causing ripple effects. Companies that backed FTX are already writing down their investments. Politicians and regulators are increasing their calls for stricter regulation of the cryptocurrency industry.

And the latest crisis has put downward pressure on bitcoin and other digital currency prices. According to, the total market value of all digital currencies fell by about $150 billion in the last week.

The failure of FTX extends beyond finance. The company also had major sports sponsorships, such as Formula One racing and a deal with Major League Baseball. Miami-Dade County decided to end its relationship with FTX on Friday, which means the venue where the Miami Heat play will no longer be known as FTX Arena.

Mercedes announced that FTX would be removed from its race cars this weekend.

Semafor, the high-profile news startup run by former BuzzFeed editor-in-chief and New York Times columnist Ben Smith, was also an early investor for FTX and Bankman-Fried, as well as his brother.

VOR NewsSEC Investigating FXT

Bankman-Fried also has other issues. According to a person familiar with the situation, the Department of Justice and the Securities and Exchange Commission are investigating FTX to determine whether any criminal activity or securities violations occurred. The person could not speak publicly about the investigations and spoke to The Associated Press on the condition of anonymity.

The inquiry is focused on the possibility that FTX used customer deposits to fund bets at Alameda Research. Brokers in traditional markets are expected to keep client funds separate from other company assets. Regulators have the authority to penalize violations. When MF Global intermingled client assets with its own bets roughly a decade ago, it effectively failed for a similar practice.

FTX listed more than 130 affiliated companies worldwide in its bankruptcy filing. The company estimated its assets to be worth $10 billion to $50 billion and its liabilities to be worth the same amount. The company named John Ray III as its new CEO, a long-time bankruptcy litigator best known for having to clean up the mess left by Enron’s demise.

The bankruptcy of FTX will undoubtedly be one of the most complicated bankruptcy cases in recent years. According to bankruptcy lawyers, the company listed more than 100,000 creditors in its filing, and because all of its customers are effectively creditors because they deposited their funds with FTX, determining who is owed what will take months.

VOR News

Cryptocurrency Not Protected

Cryptocurrencies are not legally protected, and politicians on both sides have issued statements opposing any Lehman Brothers-style bailout for cryptocurrency investors.

“Unlike in a case where there is (security insurance in the case of a brokerage failure) or where the FDIC steps in with a bank failure, these customers are completely exposed,” said Daniel Besikof, a partner at Loeb & Loeb LLP, specializes in bankruptcy law.

After experiencing the cryptocurrency equivalent of a bank run, FTX agreed earlier this week to sell itself to larger rival Binance. Customers abandoned the exchange after becoming concerned about FTX’s capital.

The cryptocurrency community had hoped that Binance, the world’s largest cryptocurrency exchange, would be able to save FTX and its depositors. However, after reviewing FTX’s books, Binance concluded that the smaller exchange’s problems were too large to solve and backed out of the deal.

FTX is the latest in a string of disasters rocking the crypto industry, which is now under intense pressure from collapsing prices and circling financial regulators. Its failure is already being felt across the cryptocurrency universe.

Sequoia Capital, a venture capital firm, announced Thursday that it is writing down its total investment in FTX of nearly $215 million.

VOR NewsBitcoin price drop

BlockFi, a cryptocurrency lender, announced late Thursday on Twitter that it is “unable to conduct business as usual” and has paused client withdrawals due to FTX’s demise.

BlockFi, bailed out by Bankman-FTX Fried’s early last summer, said it was “shocked and dismayed” by the news about FTX and Alameda in a letter posted late Thursday on its Twitter profile.

The company concluded by stating that future updates on its status “will be less frequent than what our clients and other stakeholders are accustomed to.”

Bitcoin fell immediately after the letter was published and is now trading below $17,000. Bitcoin, the original cryptocurrency, had been hovering around $20,000 for months before FTX’s problems were revealed this week, sending it briefly down to around $15,500.

Shares of Coinbase, a publicly traded cryptocurrency exchange, and Robinhood, an online trading platform, rose nearly 12%.

Meanwhile, institutional investors were already turning against cryptocurrencies before this week. Sam Fried’s abrupt demise may have permanently harmed their chances of inclusion in mainstream portfolios.

While there are still many industry zealots, many professional money managers believe the case for cryptocurrency as a portfolio diversifier or digital gold has been debunked. They claim that the losses are too great and the market structure is too risky.

“It has become clear that it will not find a home in institutional asset allocation,” Hani Redha, multi-asset portfolio manager at Pinebridge Investments in London, said. “There was a time when it was regarded as a potential asset class that every investor should include in their strategic asset allocation, and that is no longer the case.”

VOR News

Tiger Global and SoftBank are facing new FTX losses.

The recent explosions and scandals have demolished the key arguments of crypto supporters, effectively erasing the notion of Bitcoin as a safe haven in turbulent times. But none of those events, from the TerraUSD collapse to the Celsius bankruptcy, were as damning as the discovery that even FTX, once considered one of the most reliable names in crypto, was insolvent.

Salman Ahmed, the chief investment strategist at Fidelity International, which manages $646 billion from London, said the FTX collapse is “raising questions about the viability of the crypto ecosystem.” “It was always difficult to make a case for including crypto, but the setup has come under increased scrutiny.”

In February, his firm launched a Bitcoin exchange-traded product aimed at professional European investors. Since its inception, it has lost approximately 55% of its value.

Only a year ago, cryptomania was at its peak, with Bitcoin reaching $67,000. Bridgewater estimated in January that institutional investors owned 5% of Bitcoin.

Back then, frothy predictions were everywhere. JPMorgan Chase & Co. strategist Nikolaos Panigirtzoglou wrote that Bitcoin could theoretically reach $146,000 in the long run by crowding out gold. According to a PWC survey conducted in April, 42% of crypto hedge funds expect Bitcoin to trade between $75,000 and $100,000 by the end of 2022.

Investors’ perspectives are becoming more restrained. In a recent report, Panigirtzoglou predicted that Bitcoin would return to its summer lows of $13,000. On Friday, Bitcoin was trading below $17,000.

“The argument for investing in cryptocurrency for diversification died a long time ago,” he said in an interview.

Bitcoin has previously crashed and recovered. Some believers believe market hubris is being flushed out, putting the industry on a path to maturity. According to Mike Cyprys, an analyst at Morgan Stanley, FTX’s problems may benefit established companies with a track record of risk management, such as the Nasdaq Stock Market and CBOE Global Markets Inc.

According to Mark Dowding, chief investment officer at BlueBay Asset Management, the case for Bitcoin becoming a digital gold version is bogus. He believes it’s only time before more investors flee and crypto prices plummet.

“It should have been obvious that an industry that was producing nothing, burning cash, and promising alluring returns was doomed to fail,” he said.

VOR News, Bloomberg, AP


Amazon Prime Video Will Soon Come With Ads, Or A $2.99 Monthly Charge To Dodge Them

Avatar for Kiara Grace




Beginning early in 2019, Amazon Prime Video will include advertisements during TV programs and films, joining other streaming services that have added tiers of subscriptions.

The company announced on Friday that Amazon Prime members in the United States can pay $2.99 monthly to maintain their ad-free service.

Streaming services are engaged in fierce competition for viewers, and users are becoming increasingly proficient at joining and leaving these services, often based on price. The platforms risk losing consumers if they increase prices, but they also risk losing them if they fail to generate user-appealing new content.

Mid-October, Disney will begin charging $13.99 per month for ad-free Disney+ in the United States, 75% more than the current ad-supported service. Already, Netflix’s ad-free plan costs $15.49 per month, more than double the monthly subscription for Netflix with advertisements. Beginning early next year, The company will air limited advertisements during TV programs and films to “continue investing in compelling content and increase that investment over time.”


Live sporting events on Amazon Prime already include advertisements.

The United States, the United Kingdom, Germany, and Canada will be the first to implement Prime Video advertisements in early 2024, followed by France, Italy, Spain, Mexico, and Australia later in the year.

The company has stated that it will not alter the pricing of Prime membership next year. Pricing for ad-free programming in countries other than the United States will be announced later.

The company stated it would send an email to Prime members in the United States with instructions on how to sign up for the ad-free option if they choose to do so several weeks before advertisements are introduced into its programs.

Prime Video is just one of the many benefits of an Amazon Prime membership. Members also receive free shipping on purchases, groceries, online audio, and more.

The Federal Trade Commission accused Amazon in June of engaging in a multi-year campaign to enroll consumers without their consent in Amazon Prime, making it difficult for them to terminate their subscriptions. At the time, a spokesperson for Amazon stated that the FTC’s claims were false.


Continue Reading


Shein In Talks To Buy Missguided From Mike Ashley’s Frasers Group

Avatar for Kiara Grace




Shein, created in China in 2008, is a global fast fashion behemoth.

According to the BBC, Mike Ashley’s Frasers Group is in talks to sell its Missguided clothing brand to online fashion giant Shein.

The talks regarding a purchase, first reported by Sky News, occurred only a year after Frasers acquired the brand.

Last year, Frasers Group paid £20 million for Missguided after the online apparel store went bankrupt.

Shein, created in China in 2008, is a global fast fashion behemoth.


Frasers Group and Shein have both been reached for comment.

According to Sky, the agreement will see Shein acquire Missguided’s brand and other intellectual property while Frasers retains the head office.

Missguided, situated in Manchester, was launched in 2009 by Nitin Passi and has since grown to become one of the UK’s largest online fashion players.

However, due to supply chain issues, rising freight prices, and increased competition from rivals, it went into administration in May 2022 before being acquired by Frasers Group.

Frasers, which owns the Mike Ashley-founded Sports Direct company, has grown swiftly by acquiring troubled brands. Game, Evans Cycles, Jack Wills, and are examples.

While Mike Ashley is no longer the CEO of Frasers, he still maintains a majority ownership in the company.


Shein, which currently has its headquarters in Singapore, saw a boost in sales during the Covid epidemic when lockdowns increased internet purchases.

It was valued at roughly $66 billion earlier this year, which was lower than a previous valuation of around $100 billion.

It has been speculated that Shein will attempt to float its shares in the United States.

However, in May, a group of US congressmen demanded that Shein be investigated amid allegations that people from China’s predominantly Muslim Uyghur community were used as forced labor to create some of the clothing it sells.

Human rights organizations and Western governments, particularly the United States and the United Kingdom, have accused China of perpetrating crimes against humanity against the Uyghurs.

Shein responded to the BBC, saying, “We have zero tolerance for forced labour.”

“Our suppliers must follow a strict code of conduct that is aligned with the core conventions of the International Labour Organisation.”


Continue Reading


Around 3,000 Jobs At Risk At UK’s Biggest Steelworks Despite Government-Backed Package Of Support

Avatar for Kiara Grace




LONDON, England – Around 3,000 workers at Britain’s largest steelworks face job losses as part of a government-backed plan announced Friday to make the factory “greener.”

The British government confirmed popular speculation that it will invest up to 500 million pounds ($620 million) in the loss-making Port Talbot steelworks in south Wales, money it claims will ensure the site’s future.

“This proposal is a watershed moment for sustaining ongoing steel production in the United Kingdom, supporting sustainable economic growth, reducing emissions, and creating green jobs,” said Treasury Secretary Jeremy Hunt.

The steelworks’ owner, Tata, will utilize the government subsidies to assist in converting the plant’s two coal-fired blast furnaces to electric arc versions that can run on zero-carbon electricity.

Tata, which employs over 8,000 people in the United Kingdom, will also invest approximately 750 million pounds in the project but has warned that the proposals will result in consultations regarding a “deep potential restructuring” – a euphemism for job losses.

In a second statement issued Friday, the UK’s Department for Business and Trade stated steelworks that the arrangement will only protect about 5,000 jobs from Tata’s total workforce.

Tata stated that the agreement established the groundwork for long-term regional steel production and pledged to hold “meaningful” consultations with labor organizations.


Around 3,000 workers at Britain’s largest steelworks face job losses as part of a government-backed plan announced Friday to make the factory “greener.”

“With the support of the UK government and the dedicated efforts of Tata Steel UK employees and all stakeholders, we will work to transform Tata Steel UK into a green, modern, future-ready business,” said TV Narendran, CEO and Managing Director of Tata Steel.

The agreement comes two months after Tata announced intentions to establish a 4 billion-pound battery facility in the United Kingdom with government subsidies.

Unions were outraged at the prospect of job losses at Port Talbot, which employed over 20,000 people at its peak in the 1960s before cheaper alternatives from across the world took over manufacturing.

“The cost to local people and the wider Port Talbot community will be immense,” said Gary Smith, general secretary of the GMB trade union. “Once again, we have leaders hyping the fantasy land of a ‘just transition,’ while the harsh reality for workers is being laid off.”

After receiving regulatory and planning permits, the 1.25 billion-pound furnaces will be operational within three years.


Around 3,000 workers at Britain’s largest steelworks face job losses as part of a government-backed plan announced Friday to make the factory “greener.”

Tata warned last year that its operations in the United Kingdom would be jeopardized unless it received government support to help it transition to less carbon-intensive electric arc furnaces.

According to Luke Murphy, head of the Institute for Public Policy Research’s fair transition team, the government has “ignored or abandoned” the interests of unions and workers.

“The use of coal in steelworks must end, but this appears to be a bad deal for workers, the Port Talbot community, and Britain,” he said.

He emphasized that Germany has committed to working with unions to protect jobs and has invested more than $53 billion in decarbonizing heavy industry.

“The United Kingdom has nothing on the scale of this commitment to steelworks and has done nothing to improve investment conditions,” he continued.


Continue Reading

Recent News