After a tumultuous year in crypto, judicial affairs inevitably followed. Bankruptcy, liquidity problems and fraud have passed the industry under the microscope of regulators around the world.
Travel Digital, the old cryptocurrency brokerage; Alameda Research, the FTX investment branch; And the cryptocurrency exchange binance has all found itself in the reticle of the American Commission for Securities and Exchange (SEC) in battles on assets and funds.
Like 2023 Troundles, there are also many Crypto-Cour cases. Here is a brief gathering of the current status of some of the most urgent legal battles in industry.
It all started with the bankruptcy of traveling
The situation around Voyager Digital began before the FTX liquidity crisis was revealed. On July 5, 2022, the company filed for bankruptcy, initially trying to “return the value” to more than 100,000 customers who had lost millions.
Almost a month after his bankruptcy deposit, it was revealed that traveling had “deep ties” with Alameda research. Alamada was also the largest stakeholder in traveling, with an participation of 11.56% in the company after two investments totaling $ 110 million.
The auction of the assets of traveling began on September 13, which saw some of the main players in the industry in the running of what remained of the company. This included the tastes of Binance, Crosstower and FTX.
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FTX prevailed during the auction after an offer of $ 1.4 billion on the company’s assets. At the time, it was said that traveling customers could recover 72% of their assets after the FTX agreement – similar to the current statements of some involved in the attempt of Binance.us to acquire travel.
However, at the end of October, Texas prosecutors opposed the auction of traveling and launched an investigation into the FTX for potential titles.
The fall of FTX
Before any transaction was finalized, the cryptographic industry received one of the largest bombs of the year when the FTX, FTX US and Alameda research put a bankruptcy for chapter 11 in the United States, with the resignation of the co-founder and former CEO SAM BANKMAN following shortly after, on November 11.
This incident sent shock waves throughout the industry, with a domino of companies affected by their proximity to the FTX.
As part of our objective in the provision of transparency around this week’s market events, the Genesis derivatives company currently has around $ 175 million in funded funds in our FTX trading account. This has no impact on our market manufacturing activities.
– Genesis (@genesistrading) November 10, 2022
After this dramatic collapse, the SEC began to question its surveillance strategies for the cryptographic industry. FTX’s offer to travel was out of the table, and FTX itself was also to be won.
Binance intervenes
At the start of the liquidity crisis, the co-founder and CEO of Binance, Changpeng “CZ” Zhao, was the first to go out with a concept of proof of reserve after the FTX. The exchange even played with the acquisition of FTX, but ultimately did not proceed.
Around December 19, it was revealed that Binance.us had to acquire digital assets travel for around $ 1 billion.
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Shortly after, on January 5, 2023, the SEC tabled an objection to the acquisition of the Binance.
Dry essentially opposing the ground that Binance US could not have this size of assets without a little negotiation (probably with Parentco)
Which would mean a commander of the American entity. So if Binance fights, they risk exposure to the United States… https://t.co/9ww6ertol7
– Adam Cochran (Adamscochran.eth) (@adamscochran) January 4, 2023
Although the SEC and the legislators of Texas both opposed the Binance.us agreement, a survey published in court documents revealed that 97% of customers to travel interviewed favored the restructuring plan.
On March 7, bankruptcy judge Michael Wiles approved the agreement and said that the case could not be placed in an “freezing of indefinite depths” while regulators have problems. However, the next day, the ping-pong game continued while the United States Ministry of Justice has appealed against approval.
Alameda back on the stage
Meanwhile, on January 30, Alameda Research opened legal action against Digital Traveling for $ 446 million, saying that traveling “knowingly or reckless” customer funds to Alameda.
Following the initiation of this trial, on February 6, travel lawyers served a summons to Sam Bankman Fried, with the former CEO of Alameda, Caroline Ellison, the co-founder of the FTX, Gary Wang and Ramnic Arora, product manager at FTX.
On February 19, the creditors to travel served banks with a summons to appear in court for a “remote deposit”.
On March 8, court documents revealed that the bankruptcy judge of Delaware, John Dorsey, approved that traveling Digital will put 445 million dollars aside in light of the Alameda trial. The next day, Alameda revealed that she was planning to sell her remaining interest in Sequoia Capital to an Abu Dhabi fund for $ 45 million.
The situation between these three entities concerning legislators and regulators in the United States is underway.
