Founder tells his side of the FTX debacle

#Web3Weekly: Nov. 27 to Dec. 3, 2022

This post is adapted from the latest edition of my newsletter #Web3Weekly. If you would like to receive it in your inbox every Sunday, subscribe here.

Legendary Washington Post editor Ben Bradlee once said there is a large category of stories that are “interesting if true.” In other words, narratives some concerned party is peddling that require further independent verification.

The crypto world saw a doozie of such a story last week: FTX founder Sam Bankman-Fried granted several media interviews in which he portrayed the exchange’s implosion as unintended tragedy, not purposeful fraud. His most extensive remarks were an hour-long live interview with the New York Times’ Andrew Ross Sorkin at a conference sponsored by the newspaper, including some laudably tough questioning by Sorkin.

Needless to say, not everyone is buying Bankman-Fried’s benign characterization of events quite yet. But it is nevertheless interesting (strictly by Bradlee’s definition) to hear him go on the record with it, especially as he says he’s going public against his lawyers’ advice.

I definitely believe that last part, at least!

The week’s other notable headlines:

• The lending platform BlockFi filed for Chapter 11 bankruptcy, citing its financial exposure to FTX. The filing makes BlockFi the first industry casualty directly attributable to FTX’s meltdown, according to Reuters. BlockFi said in court filings it has over 100,000 creditors. It has also set up a website for parties to the bankruptcy case here.
• Kraken, the world’s number-three crypto exchange by trading volume, laid off almost a third of its workforce. The exchange said the job cuts are needed to weather the current bear market in token prices.
• A dispute erupted between Coinbase and Apple over non-fungible token sales. Apple wants a 30% cut of any NFT sales executed through Coinbase’s wallet app on iDevices, but the exchange is balking. Hence NFT sales are disabled for iDevice users for now.
• Galaxy Digital acquired the self-custody platform GK8 in a bankruptcy auction of the Celsius Network’s assets.
• Brave founder Brendan Eich recently did an interview with the Bad Crypto Podcast. The discussion thoroughly covered not only the evolution of Brave’s privacy-focused browser but also Eich’s considerable place in the broader history of the web as a former Netscape engineer and inventor of the JavaScript programming language.
• Five major Western newspapers published a joint open letter imploring U.S. prosecutors to drop their charges against WikiLeaks founder Julian Assange, citing the chilling effect the case could have on press freedom.
• Government workers in Suffolk County, N.Y., are still relying on ‘90s-era technology for some tasks following a ransomeware attack two months ago, the New York Times reports.
• A Modernist painting by Piet Mondrian may have been hanging upside-down for decades in a Berlin art gallery. But they’re going to leave it that way for now, according to CNN.

That’s it for now. Thanks for spending some time with the newsletter today! If you would like to receive updates like this in your inbox every Sunday, please join our email list here.

As ever, a brief disclaimer: This content is intended for journalistic purposes only, not as investment advice. For the latter, please DYOR and consult appropriate financial pros to make the most suitable choices for your individual needs.

Best wishes for a healthy and productive week ahead.