Crypto

Crypto’s crown prince stumbles • ZebethMedia

By zebethcontrolPosted on November 10, 2022Posted in Chain Reaction, CryptoNo Comments

Welcome back to Chain Reaction. Last week on the podcast, we talked about trouble brewing for bitcoin miners. This week, we had to tear up our plans to cover pretty much anything else and turn our attention to what we think is the biggest story in crypto to unfold this year: the fall from grace of once-revered crypto exchange FTX and its former billionaire founder Sam Bankman-Fried (SBF). Do you want Chain Reaction in your inbox every Thursday? Sign up here: techcrunch.com/newsletters. this week in web3 Here are some of the biggest crypto stories ZebethMedia has covered this week. Sam Bankman-Fried says FTX in talks to raise capital, Alameda Research to wind down trading Sam Bankman-Fried said on Thursday that he will be winding down the trading firm Alameda Research and is attempting to raise liquidity for the troubled FTX International, as he scrambles to keep the world’s second largest crypto exchange alive after a bailout deal with Binance failed earlier this week. Bankman-Fried said in a series of tweets that he is engaging with a “number of players” to raise capital for FTX’s international business and those discussions are at various stages, including letters of intent and term sheet deliberations. Troubled crypto exchange FTX investigated by US regulators over customer funds Crypto trading behemoth FTX fell from grace this week after the exchange experienced a liquidity crunch and agreed to give its rival, Binance, the option to purchase the company’s non-U.S. operations in what appears to be a bailout. Now, U.S. regulators, including the SEC and CFTC, are looking into whether FTX potentially mishandled customer funds on its platform. Say hello to the newest crypto startups from web3 accelerator Alliance DAO’s demo day New crypto startups forged ahead during Alliance DAO’s demo day on Wednesday amid the FTX implosion. The most recent cohort, known as All9, for Alliance DAO, a web3 accelerator and builder community, presented their ideas on Wednesday during a demo day, exclusively covered by ZebethMedia. There were about 953 applications for this cohort, but only 17 teams were chosen and graduated from the program. Sequoia Capital marks its FTX investment down to zero dollars Sequoia Capital just marked down to zero the value of its stake in the cryptocurrency exchange FTX — a stake that accounted for a minor percentage of Sequoia’s capital but as of last week likely represented among the most sizable unrealized gains in the venture firm’s 50-year history. It alerted its limited partners in a letter that it sent out to them this evening, a copy of which ZebethMedia obtained and shared in this article. Some crypto VCs see decentralization as the future following FTX collapse (TC+) As the crypto market digests the past few days of chaos, venture capitalists see the moment as a warning, but also as an opportunity for the growth of decentralization and maturation of the larger blockchain space. ZebethMedia spoke with some investors to understand their long-term view of the industry following this week’s news from FTX. the latest pod We had to talk about the news that rocked the crypto world this week in our Thursday episode: the Binance/FTX deal that never was. To begin, we gave you a rundown of WTF just happened with the beef between two of the largest crypto exchanges in the world and how Sam Bankman-Fried’s storied exchange fell so far so fast, bringing down investors, cryptocurrencies and other companies in the space tumbling down with it. Once we ran through the background behind the situation that’s been unfolding in real time this week, we shared our thoughts on the massive implications this fiasco might have for the rest of the crypto industry, from venture capitalists and startups to regulation across the globe. It’s a fascinating backdrop for our conversation at our crypto event in Miami next week, where we’ll be chatting with Binance CEO Changpeng Zhao (CZ), the billionaire who is seen as the catalyst for FTX’s downfall. You can use the promo code REACT for 15% off a General Admission ticket to the event to hear from CZ and plenty of other crypto market players about what the future of this tumultuous industry might hold in the coming months. Chain Reaction comes out every Tuesday and Thursday at 12:00 p.m. PT, so be sure to subscribe to us on Apple Podcasts, Spotify or your favorite pod platform to keep up with the action. follow the money Web3 messaging infrastructure platform Notifi raised a $10 million seed round co-led by Hashed and Race Capital. Web3 API provider Ramp secured $70 million in a Series B funding round, co-led by Mubadala Capital and Korelya Capital. Blockchain fraud prevention startup TRM Labs expanded its Series B funding round by $70 million led by Thoma Bravo with participation from existing investors PayPal, American Express and Citigroup. Eterlast emerged from stealth with $4.5 million to develop web3 games for sports fans. Decentralized search engine Sepana raised $10 million from Hack VC, Pitango First and others. This list was compiled with information from Messari as well as ZebethMedia’s own reporting. Hear CZ for free at TC Sessions: Crypto Who better to give an insider take on the recent Binance/FTX news than Binance chief executive CZ himself? Score a free ticket, get the lowdown and explore the many conversations and networking opportunities at TC Sessions: Crypto on November 17 in Miami. The first 25 readers to register with this will join us in Miami on November 17 for free!

Galaxy, Gradient and Lux VCs will judge the TC Sessions: Crypto pitch-off • ZebethMedia

By zebethcontrolPosted on November 10, 2022Posted in Crypto, Gradient Ventures, lux capital, Startups, TC Sessions: Crypto, TC Sessions: Crypto 2022No Comments

One of the most popular activities at a ZebethMedia conference is watching top-notch early-stage founders square off in a pitch competition. Seriously, who doesn’t love a pitch-off? And the Crypto Pitch-off is just one more compelling reason to go to ZebethMedia Sessions: Crypto on November 17 in Miami. Let’s take a look at the judges our intrepid startups will need to impress. But first (hey, you had to see this coming), if you have not yet done the deed, buy your pass right now. Changes in the crypto world are fast and furious — like Binance aiming to purchase FTX but just over 24 hours later backing out. Did you know Binance founder CZ will speak at the event? You do not want to miss that. Okay, back to the pitch-off. Be in the room when three of the brightest early-stage crypto startups take the stage in front of a live audience — for glory, for media and investor interest, and, drumroll please, for an automatic spot in the Startup Battlefield 200 at Disrupt 2023. ZebethMedia handpicks a cohort of 200 early-stage startups to receive a VIP Disrupt experience that includes, for starters, exhibiting all three days of the show — for free. The contenders will pitch their tech to this panel of expert VCs: Grace Isford, principal, Lux Capital; Wen-Wen Lam, partner, Gradient Ventures; and Will Nuelle, general partner, Galaxy Ventures — check out their bonafides below. Grace Isford invests at the nexus of web3, data infrastructure and applications of AI/ML. She focuses on crypto and blockchain infrastructure companies building the next-gen web3 stack, as well as on data and machine-learning startups that hyper-personalize user experiences and transform legacy industries. At Lux, Isford works with companies such as Tactic, Goldsky and RunwayML. Prior to joining Lux, she worked at Canvas Ventures and Handshake (in product management), and she earned her BS and MS from Stanford University. Before joining Gradient Ventures, Wen-Wen Lam was the CEO and co-founder of NexTravel (YCW15), a leading corporate travel solution that serviced thousands of customers like Lyft, Twilio and Stripe. She grew the business to over $100 million in annual sales before exiting to TravelPerk in 2020. Prior to founding NexTravel, Lam worked with startups in leadership roles. She received a BA in economics from UC Berkeley and her MBA from the USC Marshall School of Business, and she began her career in tech at LinkedIn. Will Nuelle focuses on early-stage investments in protocol layer infrastructure, DeFi applications and software products. Nuelle started at Galaxy Ventures in research, where he developed quantitative risk software for trading. Prior to joining Galaxy, he built incentive simulations for Ethereum protocol FOAM as an intern. He holds BS degrees in mathematics and architecture from Stanford University. He is a board member for Skolem Technologies and has led more than 13 investments for Galaxy. TC Sessions: Crypto takes place on November 17 in Miami. Don’t miss your opportunity to connect with our partners and to tap into the tech, trends and controversy spanning the blockchain, cryptocurrency, DeFi, NFT and web3 cryptoverse. Buy your ticket today! Is your company interested in sponsoring or exhibiting at TC Sessions: Crypto? Contact our sponsorship sales team by filling out this form.

Sam Bankman-Fried says Alameda Research to wind down trading, FTX attempting to raise capital • ZebethMedia

By zebethcontrolPosted on November 10, 2022Posted in Alameda Research, Binance, Crypto, FTXNo Comments

Sam Bankman-Fried said on Thursday that he will be winding down his trading firm Alameda Research, and is attempting to raise liquidity for the troubled FTX International exchange, as he scrambles to keep the world’s second largest crypto exchange alive after a bailout deal with Binance failed earlier this week. Bankman-Fried said he is engaging with a “number of players” and discussions are at various stages including letter of intents and termsheets. He also said that FTX’s U.S. business is “fine” and “100% liquid.” The 30-year-old entrepreneur, hailed as a wunderkind, said he assumes all responsibility for the mess FTX’s at and any raise for FTX International unit will be first used to do right by the customers. (Developing story)

Sequoia Capital marks its FTX investment down to zero dollars • ZebethMedia

By zebethcontrolPosted on November 10, 2022Posted in Crypto, VentureNo Comments

Sequoia Capital just marked down to zero the value of a stake that, as of last week, represented one of the firm’s biggest unrealized returns in its 50-year history. In short, Sequoia has decided not to bail out the beleaguered crypto exchange following its abrupt implosion over the last couple of days. This story is developing: here is the letter it just sent out to its limited partners. Dear Limited Partner, We are reaching out to share an update on our investment in FTX. In recent days, a liquidity crunch has created solvency risk for FTX. The full nature and extent of this risk is not known at this time. Based on our current understanding, we are marking our investment down to $0. Sequoia Capital’s exposure to FTX is limited. We own FTX.com and FTX US in one private fund, Global Growth Fund III. FTX is not a top ten position in the fund, and our $150 million cost basis accounts for less than 3% of the committed capital of the fund. The $150 million loss is offset by ~$7.5B in realized and unrealized gains in the same fund, so the fund remains in good shape. Separately, SCGE Fund, L.P. invested $63.5M in FTX.com and FTX US, representing less than 1% of the SCGE Fund’s 9/30/2022 portfolio (at fair value). We are in the business of taking risk. Some investments will surprise to the upside, and some will surprise to the downside. We do not take this responsibility lightly and do extensive research and thorough diligence on every investment we make. At the time of our investment in FTX, we ran a rigorous diligence process. In 2021, the year of our investment, FTX generated approximately $1B in revenue and more than $250M in operating income, as was made public in August 2022. The current situation is developing quickly. We will communicate in a timely manner when more information is available. If you have any additional questions, please contact Andrew Reynolds, Marie Klemchuk and Kathleen Forte at: investorrelations@sequoiacap.com. For SCGE questions, please contact Kimberly Summe at summe@sequolacap.com. Sincerely. Team Sequoia Footnotes: Global Growth Fund III (GGFIlI) data is as of September 30, 2022 and is based on U.S. GAAP. The $7.5B is composed of $5.8B of unrealized gain and $1.7B of realized gain. which includes the General Partner distribution on May 27, 2021 pursuant to the 2021 Amendment. Past performance is not indicative of future results Global Growth Fund III (GGFIII) refers to Sequoia Capital Global Growth Fund III – Endurance Partners, L.P. and does not include Sequoia Capital Global Growth Fund III – U.S./India Annex Fund, L.P., Sequoia Capital Global Growth Fund III – China Annex Fund, L.P., and their parallel funds More on this story shortly . . .

Some crypto VCs see decentralization as the future following FTX collapse • ZebethMedia

By zebethcontrolPosted on November 9, 2022Posted in Binance, blockchain, Crypto, EC Blockchain, EC Cryptocurrency, EC venture capital, FTX, Venture, venture capitalNo Comments

As the crypto market digests the past few days of chaos, venture capitalists see the moment as a warning, but also an opportunity for the growth of decentralization and maturation of the larger blockchain space. “As venture investors, we take a long-term view on the industry; despite the current market turmoil, we are actively assessing and investing in the right opportunities,” Marc Weinstein, founding partner of Mechanism Capital, said to ZebethMedia. “The premise of DeFi has, if anything, been strengthened by the collapse of centralized entities from opaque counterparty relationships.” Decentralized finance (DeFi) is often associated with trusting blockchain technology to execute services through smart contracts, while centralized finance (CeFi) usually refers to more traditional business models and involves having people manage funds and manually execute services. “Market sentiment is shaken, but committed VCs with experience from several crypto market cycles will continue to invest.” Marc Weinstein, founding partner of Mechanism Capital Historically, the venture market doesn’t get “too offended” by what transpires in secondary markets, David Gan, general partner at OP Crypto, said to ZebethMedia. Regardless, he said, the seeming death of FTX is saddening for everyone, “not just in the VC space, but across the board.” When there are massive crashes and burns, it speaks to what we’ve been seeing over the past decade: It’s the Wild West out there, Samantha Lewis, principal at Mercury, said to ZebethMedia. “When summarizing it all, I see it a continuation of the phase that started when winter hit and we saw Luna and all these crazy companies crash and burn like BlockFi, Celsius and now we have FTX,” Lewis said. “As an early-stage venture investor, it’s telling me the hype is now for sure gone. But that ushers in the maturation of the space that a lot of us have been craving for a really long time.”

Binance backs out of deal to buy FTX • ZebethMedia

By zebethcontrolPosted on November 9, 2022Posted in Binance, Crypto, crypto exchanges, FTXNo Comments

The world’s largest crypto exchange by volume, Binance, said it would walk away from a deal with the third largest crypto exchange by volume, FTX. On Tuesday, Binance signed a letter of intent to purchase its troubled competitor, FTX, in what appeared to be a potential bailout of the latter amid a liquidity crunch. But just a bit over 24 hours later, that plan crumbled. Binance backed out after reviewing the company’s structure and books, it said in a statement to the Wall Street Journal. “Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance said. “As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations, we have decided that we will not pursue the potential acquisition of [FTX],” Binance said in a tweet. “Every time a major player in an industry fails, retail consumers will suffer,” Binance continued. “We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market.” Binance and FTX did not immediately respond to ZebethMedia requests for comment. Earlier today, sources familiar with the matter told CoinDesk that FTX’s loan commitments raised concerns among Binance’s top brass. The report follows Binance CEO Changpeng Zhao tweeting that FTX “going down is not good for anyone in the industry.” This is a developing story and may be updated if new information arises.

Power up with our partners at TC Sessions: Crypto • ZebethMedia

By zebethcontrolPosted on November 9, 2022Posted in BSV, Crypto, Polygon, Startups, TC Sessions: Crypto, TC Sessions: Crypto 2022, wilson sonsiniNo Comments

We’re packing our bags and getting pumped about flying to Miami for TC Sessions: Crypto on November 17. What about you? Don’t miss your chance to rub elbows with the kings and queens of blockchain, cryptocurrency, DeFi, NFT and web3 — the current rulers and the up-and-coming contenders for the crown. Buy your pass today and join the royal courtiers of the cryptoverse. You’ll hear from the likes of Binance founder and CEO, Changpeng (CZ) Zhao; OpenSea co-founder and CEO, Devin Finzer; Sequoia Capital partner, Michelle Bailhe Fradin; and many other movers and shakers. I mean, just look at this power-packed agenda. Like all ZebethMedia events, these great speakers, interviews, panel discussions — plus world-class networking opportunities — are designed to help founders and early-stage startups build stronger businesses. But it’s not just us — our event partners are equally committed to your success. Take a look at the companies who have partnered with us for TC Sessions: Crypto: Hedera, MetaJuice, Polygon, Wilson Sonsini, Bitcoin Association for BSV and Otter.ai. They do more than cut a check — they show up to deliver their expertise and relevant content and to provide resources that educate, engage and support early-stage founders. TC Sessions: Crypto takes place on November 17 in Miami. Don’t miss your opportunity to connect with our partners and to tap into the tech, trends and controversy spanning the blockchain, cryptocurrency, DeFi, NFT and web3 cryptoverse. Buy your ticket today! Is your company interested in sponsoring or exhibiting at TC Sessions: Crypto? Contact our sponsorship sales team by filling out this form.

Say hello to the newest crypto startups from web3 accelerator Alliance DAO’s demo day • ZebethMedia

By zebethcontrolPosted on November 9, 2022Posted in accelerator, Crypto, demo day, web3No Comments

New crypto startups forged ahead during Alliance DAO’s demo day on Wednesday amid the FTX implosion. “This is actually worse than the 2018 bear market,” Qiao Wang, a core contributor at Alliance DAO, said, referring to the tentative plans for Binance to absorb competitor FTX. “Today, everyone was caught off guard, myself included … the last three months of working closely with our founders in All9, I’m hopeful again. It’s people like them that will push our industry forward.” The most recent cohort, known as All9, for Alliance DAO, a web3 accelerator and builder community, presented their ideas on Wednesday during a demo day, exclusively covered by ZebethMedia. It seems like it was just yesterday that we covered Alliance DAO’s previous demo day, but four months have passed. Twice a year, Alliance DAO brings in web3 founders for a three-month program. To date, Alliance DAO alumni have created over $10 billion in market capitalization, Wang said. There were about 953 applications for this cohort, but only 17 teams were chosen and graduated from the program. Many of the teams are looking at improving crypto themes like proof-of-physical-work, wallet experience for everyday users, product-driven protocols, crypto B2B products, on-chain data and verticalization, Wang said. “The cohort is a fairly representative sample of what’s happening in the industry at large.” The cohort focused on a range of subsectors and products across web3 like authentication, liquid staking, crypto wallets and decentralized machine learning, among others. About 38% of the startups focused on the Ethereum ecosystem, while Polygon made up 21% and Solana 17%. Mentors include Colleen Sullivan, co-head of ventures at Brevan Howard Digital; Mike Dudas, founder of LinksDAO, The Block and an investor for 6th Man Ventures; Anatoly Yakovenko, co-founder of Solana; Ryan Selkis, founder and CEO of Messari; Mounir Benchemled, founder of ParaSwap; Amir Bandeali, co-CEO of 0x Labs; and Ryan Wyatt, CEO of Polygon Studios. Here’s a breakdown of the 17 startups: Company name: Ora What it does: Search engine for web3 Founders: Dennis Antela Martinez, Sanny Kim, Jacob Shiohira Stage: Seed The pitch: Ora is building a search engine for web3 as the ecosystem continues to expand, co-founder Jacob Shiohira said during his pitch. “Blockchain data is confusing and we can see this in explorers today,” he said. For crypto to go mainstream, there need to be products that every person can understand, he added. Ora aims to combine sequel engines, dashboards and explorers through one interface. It began with indexing data from the layer-1 blockchain Solana, but plans to expand across web3. Company name: Mensari What it does: Quickbooks for web3 Founders: Vidur Jain, Manuj Paliwal Stage: Seed The pitch: Mensari aims to help businesses involved in web3 with its own Quickbooks platform. As organizations integrate crypto, their bookkeeping complexity is “skyrocketing,” co-founder Vidur Jain said during his presentation. Mensari built a double-entry accounting system offering operational accounting and portfolio accounting for organizations with web3 idiosyncrasies like asset swaps, payment streaming, NFTs and liquidity provision. The platform is live on blockchains Ethereum and Polygon and has 15 beta customers to date. Company name: Tensor What it does: Solana-focused NFT aggregator Founders: Richard Wu, Ilja Moisejevs Stage: Seed The pitch: Tensor is aiming to build a Solana-focused NFT aggregator. Current NFT marketplaces cater to retail investors, not traders, and as more professionals enter the NFT market, they need more sophisticated tooling, Ilja Moisejevs said during his pitch. Tensor aims to provide Solana-based NFT traders more services so they can “fire off hundreds of transactions across eight of the largest marketplaces with just a single click.” Company name: Raleon What it does: Web3 marketing analytics Founders: Nathan Snell, Adam Larson Stage: Seed The pitch: Raelon is building a marketing analytics firm for web3. The current marketing technology doesn’t cater to web3 tools or on-chain and off-chain data, so it needs to be revamped to consider new technologies, co-founder Nathan Snell said. Raleon combines blockchain data with Web 2.0 data to create an “enriched identity” so projects can target web3 users, Snell said. The platform is looking for strategic investors to source customers. Company name: Spexigon What it does: Proof-of-physical-work for drone imagery Founders: Adam Killam, Peter Szymczak, Bill Lakeland, Alec Wilson Stage: Seed The pitch: Spexigon is a proof-of-physical-work platform for drone imagery where drone owners can earn crypto by capturing imagery in a fly-to-earn rewards system. Pilots are rewarded with tokens once the algorithm verifies images and moves it into the marketplace for consumption by businesses and developers. The platform has had over $1.5 million in revenue over the past eight months after gaining interest from government agencies, engineering firms and rail companies, to name a few. It has raised $5.5 million in a seed round with participation from Alliance DAO, Dapper Labs, and others. Company name: SlashAuth What it does: Web3 authentication Founders: Ned Rockson, Nicolas Salhuana Stage: Pre-seed The pitch: SlashAuth is a web3 authentication platform that aims to help developers create distributed and secure identities across both Web 2.0 and web3 ecosystems. It cryptographically merges identities across both layers so users can have access to all of their accounts through one single sign-in, co-founder Nicolas Salhuana said during his presentation. It currently is in closed beta and has raised $3 million from investors like Alliance DAO and Y Combinator. Company name: Stride What it does: Cosmos-focused liquid staking Founders: Riley Edmunds, Aidan Salzmann, Vishal Talasani Stage: Seed The pitch: Stride is building a liquid staking platform for layer-1 blockchain Cosmos. Users can trade their tokens for Stride’s ST tokens, then Stride stakes those tokens for users to be used throughout the Cosmos DeFi ecosystem. The platform was launched eight weeks ago but has $7 million in total value locked, $150,000 of recurring revenue and over 8,000 users, co-founder Vishal Talasani said. Stride has raised $6.7 million from investors like Pantera, Distributed Global, North Island Ventures, 1confirmation and Staking Facilities. It’s looking for LP commitments in exchange for Stride tokens. Company name: Ethos What it does:

Crypto’s biggest M&A deal, between Binance and FTX, looks unlikely to close • ZebethMedia

By zebethcontrolPosted on November 9, 2022Posted in Binance, Crypto, FTXNo Comments

Crypto exchange Binance, the largest in the world by volume, signed a letter of intent Tuesday to purchase its troubled competitor, FTX, in what appears to be a potential bailout of the latter amid a liquidity crunch. But after less than a day of due diligence, Binance appears highly unlikely to go forward with the deal, sources told Coindesk. Specifically, FTX’s loan commitments raised concerns among Binance’s top brass, Coindesk reported. The report comes shortly after Binance’s chief executive, Changpeng Zhao, tweeted that FTX “going down is not good for anyone in the industry,” and the ongoing episode has “severely shaken” the confidence of consumers. FTX, helmed by billionaire Sam Bankman-Fried, found itself in trouble this week after reports revealed that the exchange was unusually intertwined with its sister entity, Alameda Research, which held large amounts of the exchange’s native FTT token. In the 72 hours leading up to Tuesday morning’s deal announcement from Binance and FTX, the latter exchange saw some $6 billion in withdrawals from its platform stoked by investor fears over its financial health. And it is embroiled in a reported months-long probe by U.S. regulators over potentially mishandling customer funds that came to light on Wednesday. Zhao and Bankman-Fried had clashed for months on social media over regulatory issues and other points of conflict before they both announced the potential deal. Their tension came to a head earlier this week after Zhao Tweeted that Binance would be liquidating its holdings of FTT, which it acquired through its participation as an early backer of FTX, as a “post-exit risk management” measure. It appeared tensions had cooled on Tuesday as Bankman-Fried called Zhao, asking the Chinese-Canadian fellow billionaire to rescue his exchange by purchasing its non-U.S. operations. Bankman-Fried offered a “huge thanks” to Zhao and Binance in a string of Tweets following that call, noting that the deal was “a user-centric development that benefits the entire industry.” Binance wasn’t Bankman-Fried’s first call, though. A spokesperson for crypto exchange OKX told Reuters on Wednesday that Bankman-Fried had approached OKX Monday morning about a potential deal, which OKX says it declined out of concerns over industry consolidation.

Troubled crypto exchange FTX investigated by US regulators over customer funds • ZebethMedia

By zebethcontrolPosted on November 9, 2022Posted in Crypto, FTX, regulationNo Comments

Crypto trading behemoth FTX fell from grace this week after the exchange experienced a liquidity crunch and agreed to give its rival, Binance, the option to purchase the company’s non-U.S. operations in what appears to be a bailout. Now, U.S. regulators are looking into whether FTX potentially mishandled customer funds on its platform, sources told Bloomberg. In addition to the liquidity crisis itself, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are investigating FTX’s relationship with its sister entity Alameda Research as well as with FTX US. The investigations, which haven’t been publicly disclosed, began “months ago as a probe into FTX US and its crypto-lending activities,” Bloomberg reported. Alameda Research, a crypto trading firm run by FTX chief Sam Bankman-Fried, was caught in the eye of the storm this week when its leaked balance sheet financials revealed unusually close ties with FTX through the exchange’s native FTT token. Changpeng Zhao, Binance’s chief executive, sent shockwaves through the cryptoverse when he Tweeted that his firm, an early investor in FTX and a large holder of its tokens, would be liquidating its position in FTT. Since that series of Tweets, FTT holders have been selling off their tokens in droves. Zhao claims Bankman-Fried then called him, asking Binance to rescue the troubled exchange. Binance and FTX both revealed yesterday that the former had signed a non-binding letter of intent that gives it the option to purchase FTX pending due diligence. At this point, it is unclear whether the deal will go through because of alleged concerns that have arisen during the diligence process.