The monumental collapse of FTX will go down as one of many largest company scandals of all time. However, at the very least Sam Bankman-Fried, or SBF, is sorry. On Nov. 22, the disgraced founding father of FTX penned a letter to his former workers describing his function within the firm’s chapter. “I by no means meant this to occur,” he wrote. “I didn’t notice the total extent of the margin place, nor did I notice the magnitude of the chance posed by a hyper-correlated crash.” Get this: SBF nonetheless thinks the corporate could be saved as a result of “there are billion of {dollars} of real curiosity from new traders.” Shouldn’t he be preoccupied with making an attempt to keep away from jail proper now?

Bitcoin (BTC) and the broader crypto market have been reeling within the wake of the scandal. Whereas this has allowed many diamond handed hodlers to build up extra BTC on a budget, institutional traders are utilizing this chance to brief the market. We might lastly get that ultimate capitulation to spherical out the present four-year cycle.

As at all times, this week’s Crypto Biz publication delivers the entire newest high-profile enterprise information from our trade.

Sam Bankman-Fried says he’s ‘deeply sorry’ for collapse in letter to FTX crew

SBF’s letter to former FTX employees painted the image of a deeply remorseful founder who managed to squander billions due to extreme margins and poor oversight. He additionally blamed the “run on the financial institution” for FTX’s final demise. For these of you conserving monitor, the financial institution run that SBF talked about was triggered by Binance CEO Changpeng Zhao who, on Nov. 6, disclosed on Twitter — of all locations — that he can be selling $500 million worth of FTX tokens. That announcement triggered a tidal wave of redemptions on FTX as customers rushed for the exit. Inside 48 hours, FTX was proven to be bancrupt.

FTX owes over $3 billion to its 50 largest collectors: Chapter submitting

The opening in FTX’s steadiness sheet is estimated to be price round $8 billion — and an enormous portion of that’s owed to just 50 people. New chapter filings within the state of Delaware confirmed this week that FTX’s high 50 collectors are owed a mixed $3.1 billion. One particular person is owed greater than $226 million, whereas the remainder of the highest 50 had anyplace between $21 million and $203 million on the failed derivatives exchange. So, when can FTX collectors anticipate to get a few of their a refund? It could take years or even decades, in response to insolvency lawyer Stephen Earel.

FTX disaster results in report inflows into short-investment merchandise

Believers in Bitcoin as a sound cash different to the present financial regime have used the most recent market collapse to build up extra BTC. However, for some institutional traders, the FTX collapse has triggered a new shorting opportunity. In line with CoinShares, 75% of institutional crypto investments final week went to brief funding merchandise. In different phrases, they’re betting that Bitcoin and different crypto belongings will see an additional decline in worth. BTC has already plunged to around $15,500, marking a brand new low for the cycle. Though Bitcoin can go a lot decrease, we’re nearing the top of the present four-year cycle. So, the underside might be shut.

US senators urge Constancy to rethink its Bitcoin choices after FTX blow-up

Constancy Investments, one of many earliest institutional backers of digital belongings, is being strongly urged by members of Congress to restrict its Bitcoin funding choices. This week, Senators Elizabeth Warren, Tina Smith and Richard Durbin as soon as once more called on Fidelity to rethink its Bitcoin 401(ok) product providing in the wake of the FTX disaster. “Since our earlier letter [from July 26, 2022], the digital asset trade has solely grown extra risky, tumultuous, and chaotic—all options of an asset class no plan sponsor or individual saving for retirement ought to wish to go anyplace close to,” the senators wrote. The crypto skeptics can take their victory lap for now, however Bitcoin will get the final snicker.

Earlier than you go: Might Grayscale set off the following Bitcoin worth collapse?

Considerations round Grayscale’s Bitcoin Funding Belief (GBTC) started to mount final week after the corporate refused to provide on-chain proof of its reserves. Now, traders are anxious about whether or not Grayscale’s mum or dad firm, Digital Forex Group (DCG), might be pressured to liquidate a portion of its GBTC to cowl an enormous maintain in Genesis International Buying and selling’s steadiness sheet. What’s the connection between DCG, GBTC and Genesis? On this week’s Market Report, Marcel Pechman and I focus on this relationship and why it issues to Bitcoin traders. You possibly can watch the total replay beneath.

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