blockchain.news/news/tribe-capital-explores-injecting-capital-into-bankrupt-ftx-exchange

Tribe Capital explores injecting capital into bankrupt FTX exchange

Tribe Capital, a San Francisco-based venture capital firm, is reportedly exploring the possibility of injecting new capital to revive the bankrupt cryptocurrency exchange, FTX. Bloomberg reported on April 18 that Tribe Capital is considering leading a $250 million fundraising campaign, with $100 million from itself and its limited partners. According to sources familiar with the matter, Tribe co-founder, Arjun Sethi, met with FTX’s Committee of Unsecured Creditors in January to discuss the informal proposal.

The venture capital firm's proposal in January included an estimated 9 million customer accounts, FTX US, FTX Australia, FTX Japan, FTX EU, FTX International, and LedgerX. However, the proposal excluded a venture capital portfolio and crypto assets, among others. If the reboot plan is successful, the revived exchange would retain the name FTX.

On April 18, the Official Committee of Unsecured Creditors of FTX confirmed via Twitter that it was "working with the Debtors to evaluate all options to reboot or sell the FTX exchanges and create value for creditors." However, the committee added that "there is no definitive timetable for a reboot or sale of the exchanges at this time."

In January, the judge overseeing the FTX bankruptcy proceedings gave the troubled crypto exchange approval to sell some of its assets to help repay its creditors. According to a filing in Delaware Bankruptcy Court, Judge John Dorsey approved the sale of four key units of FTX - the derivatives platform LedgerX, stock-trading platform Embed, and the exchange’s regional arms, FTX Japan and FTX Europe.

Attorneys from Sullivan & Cromwell, representing FTX at a hearing in the United States Bankruptcy Court for the District of Delaware on April 12, stated that the exchange had recovered approximately $7.3 billion in liquid assets. This development offers hope for the future of the exchange, and it is possible that Tribe Capital's proposed capital injection could be a critical step in FTX's revival.

FTX was one of the fastest-growing cryptocurrency exchanges in the world, with a valuation of $18 billion in December 2021. The exchange was founded in 2019 by Sam Bankman-Fried, a former Wall Street quant trader, and Gary Wang, a software developer. The exchange's meteoric rise was driven by its advanced trading infrastructure and innovative products, such as leveraged tokens and prediction markets.

However, in December 2021, the exchange suffered a massive blow when it was hit by a wave of liquidations caused by the collapse of its risk-management system. The incident resulted in the loss of over $4 billion in customer funds, triggering a chain of events that led to the exchange's bankruptcy.

Tribe Capital's potential involvement in FTX's revival is significant given its previous investment in the exchange. The venture capital firm was part of a group of investors that participated in FTX's $900 million funding round in July 2021. However, Tribe Capital was also an investor in Archegos Capital Management, the family office that triggered a $20 billion margin call in March 2021, resulting in significant losses for several banks. The firm's involvement with Archegos led some to question its due diligence processes and risk management practices.

blockchain.news/news/us-prosecutors-seek-lengthy-sentence-for-crypto-shadow-bank-executive

US Prosecutors Seek Lengthy Sentence for Crypto Shadow Bank Executive

US prosecutors are seeking a lengthy sentence for Reginald Fowler, a former minority owner of the Minnesota Vikings NFL team, over his alleged involvement in shadow banking practices through Crypto Capital Corp, an alleged crypto shadow bank. Fowler's sentencing is scheduled for April 20, following his arrest in 2019 and subsequent charge with bank fraud, illegal money transfers, and conspiracy connected to his operation of an unlicensed money transmitting business.

In a request filed on April 18, US District Attorney Damian Williams requested a sentence of at least seven years imprisonment for Fowler, with a suggested range of 15 to 20 years to reflect the seriousness of the offense. Williams argued that Fowler's actions as an unlicensed money transmitter and his alleged deception of financial institutions warranted a significant penalty.

Fowler established a firm called Global Trading Solutions (GTS) in 2018 under the umbrella of the Panama-based Crypto Capital Corp, an alleged crypto shadow bank. Through GTS and Crypto Capital, Fowler is alleged to have provided shadow banking services to several crypto exchanges including Bitfinex, Binance, CEX.io, and QuadrigaCX. Between February and October 2018, GTS and Crypto Capital processed approximately $750 million in cryptocurrency transactions, providing unlicensed crypto firms with unlawful access to the U.S. banking system, according to the filing.

The use of shadow banking practices by Crypto Capital and GTS came to light during the court case regarding Bitfinex's failure to disclose the loss of $850 million in customer funds. Fowler and Crypto Capital were identified as key players in the case, which was settled in February 2022 with the firms ordered to pay $18.5 million in civil penalties and shut down New York trading operations.

The alleged involvement of Fowler and Crypto Capital in shadow banking practices highlights the risks associated with unlicensed money transmitting businesses and the potential for illegal activities to occur within the crypto industry. The case also underscores the need for stronger regulation and oversight of crypto exchanges and shadow banking practices to prevent illicit activities and ensure the integrity of the financial system.

protos.com/this-metamask-exploit-has-stolen-10m-ether-from-og-crypto-users/

Over 5,000 ether has been stolen from the MetaMask wallets of cryptocurrency veterans across multiple chains since December 2022, according to a MetaMask developer known as Tay.

At press time, the amount of ether stolen is worth $10.5 million. The ongoing hack deliberately targets “OGs who are reasonably secure,” the dev noted on Twitter, but it remains unclear how the sophisticated hacker is pulling it off.

“This is NOT a low-brow phishing site or a random scammer… It ONLY [steals from] OGs,” Tay wrote.

The MetaMask dev speculates that the hacker acquires a data cache from the victim’s device. “My best guess … is that someone has got themselves a fatty cache of data from [over a year ago] and is methodically draining the keys as they parse them from the treasure trove.”
Though information on the hacker’s methods remains unclear, all victims have something in common besides being embedded in the space for several years: their wallet keys were created between 2014 and 2022.

According to the MetaMask dev, the hacker will commit a secondary theft in the hours following their initial heist to collect assets and dust that they initially missed. Large thefts are carried out by swapping assets into ether within the victims’ wallets and then into bitcoin through a centralized swapper. A week later, the bitcoin is washed through a crypto mixer in order to make it difficult to trace.

Tay has urged MetaMask users to split their crypto across multiple keys.