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It’s week three of the Sam Bankman-Fried trial…how are you holding up?
On Thursday, Can Sun, former FTX general counsel, took the stand to testify on behalf of the prosecution’s case against Bankman-Fried. Sun dove into the company’s terms of service, how he documented loans from Alameda to FTX executives and the reason he eventually resigned, which you can read about here.
Nishad Singh, a former FTX executive and head of engineering, testified earlier this week that he, Bankman-Fried and other executives at the exchange and its sister company Alameda Research spent $8 billion worth of customer funds. The money went to real estate, venture capital investments, campaign donations, endorsement deals and even branding rights to a sports stadium, he added.
Singh was the third FTX executive to take the stand after Gary Wang, co-founder and CTO of FTX; and Caroline Ellison, CEO of Alameda. All three pleaded guilty for crimes regarding FTX and Alameda’s collapse and could face up to 75 years, 50 years and 110 years in prison, respectively.
More details on where the money went can be found here.
In a similar tune, on day 11 of Bankman-Fried’s trial, Peter Easton, an accounting professor at University of Notre Dame, testified regarding whether or not the FTX collapse was predicated on fraud.
When prosecutors asked Easton if FTX ever spent user funds, he bluntly said, “oh, yes.”
Read more on Easton’s findings after compiling thousands of pages of bank statements and internal documents here.
This week in web3
If you’re getting SBF trial fatigue, here are some articles on what else is happening in the wild world of web3.
- NY attorney general sues Gemini, Genesis and DCG for allegedly defrauding crypto investors of over $1B
- Meet Alliance DAO’s latest accelerator cohort of startups building in crypto winter (TC+)
- Reddit is killing blockchain-based Community Points
- Asia emerges as a promising haven amid the crypto winter
- Trezor launches two new devices to help onboard crypto newbies
- FTC sues bankrupt crypto company Voyager’s CEO over false FDIC insurance claims
The latest pod
Bitwise is a crypto asset manager that is known for creating the world’s largest crypto index fund. The firm also filed for a bitcoin spot ETF in the U.S., making it one of a number of firms whose applications are pending after the U.S. Securities and Exchange Commission (SEC) delayed its decisions.
Katherine previously has worked in compliance at True Capital Management and Luminate Capital Partners. Before that, she spent a decade as assistant U.S. attorney, most recently in the economic crimes unit of the U.S. attorney’s office for the Northern District of California.
We talked about the status of Bitwise’s bitcoin spot ETF application and how recent developments with other firms’ similar applications may bring on the momentum needed for the financial vehicle to be approved.
We also talked about:
- How regulatory legal procedures affect legislation
- Easiest places to start for crypto regulation
- Key factors for crypto companies’ compliance
- FTX trial being “baked in” for regulators
Also check out the latest episode on Equity, TechCrunch’s podcast about the business of startups, which dove into funding of web3 gaming companies this week. (Spoiler: Web3 gaming capital inflows declined in Q3, but it’s not all that bad.)
Follow the money
- DeFi protocol Elixir raised $7.5 million at a $100 million valuation
- Decentralized application Fileverse raised $1.5 million to help improve collaboration and productivity
- Animoca Brands subsidiary Darewise Entertainment raised $3.5 million in token presale
- Solana-focused Squads Labs raised $5.7 million to develop a mobile-focused smart wallet
- MyShell raised $5.6 million to create AI-focused apps and creator ecosystems on the blockchain
This list was compiled with information from Messari as well as TechCrunch’s own reporting.
What else we’re writing
Want to branch out from the world of web3? Here are some articles on TechCrunch that caught our attention this week.
- Ray-Ban Meta sunglasses have ‘influencer’ written all over them
- One year post-acquisition, X traffic and monthly active users are in decline, report claims
- Tesla Q3 profit falls 44% on EV price cuts
- Hacker leaks millions more 23andMe user records on cybercrime forum
- Was Loom’s $975M exit a fair price? (TC+)
Follow me on Twitter @Jacqmelinek for breaking crypto news, memes and more.