Didn’t see that coming

Gm, friends. Quick PSA: No Coinsider Radar this Friday—we’ll be busy recovering from the annual pumpkin pie-induced Thanksgiving food coma, hoping that the festivities will take our minds off of the train wreck that is crypto right now. (Provided that Aunt Susan doesn’t use FTX to point out that “this crypto thing is just one big scam.”)

Today: The TL;DR on FTX’s crazy bankruptcy filings, the fallout hits international markets, and Tether deals a blow to Solana. Let’s go.

—Angelina & Vincent

Everything You Need to Know About FTX’s Bankruptcy

FTX’s Chapter 11 bankruptcy filing was made public last week—and let’s just say the first day affidavit didn’t make things any simpler in what’s quickly shaping up to be the most unpredictable story crypto’s ever seen.

Some context: In a bankruptcy case, the first day affidavit lays out how an insolvent entity got into its precarious situation. In FTX’s case, the filings start off with an affidavit from its new CEO, John Jay Ray III (whose CV includes a stint overseeing Enron’s liquidation).

Ray’s take on FTX?

"I have been the Chief Restructuring Officer or Chief Executive Officer in several of the largest corporate failures in history,” he said. “Never have I seen such a complete failure of corporate controls."

We pored over the bankruptcy filing and came up with these—the 10 biggest (and wildest) revelations about FTX:

1. Alameda was handing out personal loans to execs. SBF got $1 billion and FTX’s Director of Engineering Nishad Singh got $543 million.

2. FTX didn’t keep a list of employees, the terms of their agreements, or even their roles.

3. FTX didn’t have any board meetings…like, ever.

4. Secretly, Alameda was liquidation-exempt on FTX’s trading platform—so if its risky trades backfired, Alameda didn’t have to pay up.

5. SBF communicated with employees via Signal, which auto-deleted his messages. So there were no lasting records of his decision making.

6. FTX bought employees real estate using customer funds.

7. Cybersecurity wasn’t a thing. SBF and his execs used an unsecured group email account to share private keys and other sensitive FTX data.

8. Managers approved of employee disbursements in chats using emojis.

9. Customers’ crypto deposits weren’t tracked—they just went into one big pool.

10. FTX never kept a record of its crypto assets, cash flow, or bank accounts.

Bottom line: The filings prove that nearly every public statement made by SBF in recent weeks about FTX’s solvency and responsibility was a lie. And this was only the first of many bankruptcy filings to come.

—Angelina

The Global Impact of the FTX Collapse

Bad news doesn’t need a passport to cross borders. While the majority of the FTX fallout has impacted US-based companies and venture capitalists, the Asian crypto markets are starting to see the effects, too.

Crypto fund Sino Global may have a $129 million hole in its balance sheet because of coins held in custody at FTX, according to CoinDesk. Making matters more complicated, Sino partnered with FTX in a fundraise targeting $200 million earlier this year. This funding round—$90 million of which has already been raised—could be at risk if Sino’s ties to FTX spook investors.

Big picture: FTX’s collapse has been a wake up call for crypto venture capitalists everywhere. Dragonfly partner Tom Schmidt said that VCs missed FTX’s biggest red flags because the investors who asked tougher questions—or dared to harsh the vibe—were left out of fundraising rounds in the last bull market.

What it means: FTX-related losses likely aren’t going to break the bank for VCs who diversify their investments. But…Asian crypto companies no longer have leverage in looking for new funding and will have to prepare for much more due diligence than before.

—Vincent

It’s Not Getting Any Easier for Solana

It's about to become a whole lot harder to trade on Solana: Tether is switching $1 billion in USDT from Solana to Ethereum.

FYI: For all the scrutiny surrounding Tether, it’s still very popular for DeFi protocols, and this move makes it much harder for Solana to compete with Ethereum.

This strategy shift follows large double-digit declines in the price of SOL, Solana’s native token. The protocol has been struggling to regain its footing as developers work to find a replacement for the decentralized exchange Serum, which devs feared could be controlled by FTX.

What’s next? Solana still has a committed crew of developers who could bring it back, but it’s not competing with Ethereum any time soon.

—Vincent

In other news:

How about a break from FTX? Here’s what’s going on in the circles of crypto not preoccupied with those three letters:

• Ex-royals Prince Harry and Meghan Markle plan to build their own metaverse (meg-averse?).

• Celsius customers will have until January 3, 2023, to file their proofs of claim.

• Binance launched an exclusive NFT partnership with Christiano Ronaldo—just in time for the World Cup.

• Cardano is launching Midnight, a new privacy blockchain that’s accessible to regulators and auditors.

• Edward Snowden has nothing but harsh words for Coinbase’s regulatory compliance practices.

And that’s what you need on your radar today in crypto. To all of you in the US, we hope you have a wholesome, FTX-free Thanksgiving. We’ll be back on Sunday.