SBF Struggles On The Stand | Crypto’s New Rally

FTX founder may be digging his own grave.

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Nina Bambysheva Senior Reporter, Forbes Money & Markets
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Steven Ehrlich Director, Forbes Digital Assets
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BANKMAN-FRIED TESTIFIES IN HIS OWN TRIAL

After weeks of damning testimony from his close associates and former colleagues, FTX founder Sam Bankman-Fried took the stand himself this week. In meandering answers under cross-examination, he largely maintained the narrative his defense had presented to the court earlier in the trial: that he acted in good faith and did not intend to defraud anyone.

Bankman-Fried said he didn’t learn Alameda owed billions of dollars to FTX customers until just two months before the exchange collapsed in November and was “surprised” by this discovery—contrary to the prosecution’s claims that he was knowingly using FTX customer deposits to finance lavish spending on real estate, venture-capital investments and political donations.

When measured against the prosecution’s case and testimony from former FTX colleagues, Bankman-Fried did not seem to be making much headway. He faces up to 115 years in prison if convicted on all charges, including fraud and money laundering. The trial will resume on Monday morning.

BITCOIN STOCKS RALLY

Cryptocurrencies and shares of companies with substantial token holdings soared to double-digit gains this week as renewed optimism for the introduction of spot bitcoin ETFs kindled a short squeeze in derivatives based on the oldest digital asset.

Earlier this month, the SEC let pass a deadline to appeal the court’s order that it consider Grayscale’s application to change its existing bitcoin trust to an ETF, and the agency has begun to negotiate with several companies that are seeking to start such funds from scratch. Market participants are positioning for the funds to be approved early next year.

CURRENT PRICE OF TOP 5 COINS (7-Day % Change)

Coin

Price

Percent Change

Bitcoin (BTC)

$33,841

14.2%

Ether (ETH)

$1,780

10.8%

Tether (USDT)

$1.00

0%

Binance Coin (BNB)

$225

5.6%

XRP (XRP)

$0.55

5.8%

Source: CoinGecko. Prices as of 6:00 p.m. on October 27, 2023.

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WHY TOKENIZATION IS FAILING

Crypto tokenization was supposed to be a killer app for financial services. Token projects, focused on issuing digital receipts for real-world assets, run the gamut from hundred-million-dollar bond issues in Europe to Robinhood-esque investment apps that let users buy tokenized U.S. Treasurys—all with the promise of revolutionizing modern finance. So why after nearly a decade and top-tier backers like Goldman Sachs and McKinsey, hasn’t it gained any traction? Read more.

ELSEWHERE

Gemini Sues Genesis Over $1.6 Billion Of Bitcoin Trust Shares

Bloomberg