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SBF’s lawyers terminate FTX representation due to conflicts of interest

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Paul, Weiss, the law firm backing FTX CEO Sam Bankman-Fried (SBF) amid bankruptcy, renounced representing the entrepreneur, citing a conflict of interest. The decision to withdraw from representation after SBF’s tweets were found to disrupt the law firm’s reorganization efforts.

Starting Nov. 14, SBF published a series of tweets that amassed extensive attention across Crypto Twitter. The move, however, sparked speculations that the cryptic tweets were used to distract bots from noticing concurrently deleted tweets. While no ill-intent could be concluded, Paul, Weiss attorney Martin Flumenbaum believed that SBF’s “incessant and disruptive tweeting” was negatively impacting the reorganization efforts:

“We informed Mr. Bankman-Fried several days ago, after the filing of the FTX bankruptcy, that conflicts have arisen that precluded us from representing him.”

The law firm’s decision to back out from helping SBF coincided with a much-awaited ruling of fellow fraudster Elizabeth Homes, who got sentenced to prison after being convicted of criminal fraud.

SBF currently faces scrutiny from multiple directions, including ongoing investigations around the misuse of customer funds and disclosing of bankruptcy-related documents.

Despite informing the defendants, the court may refuse an attorney’s request and order them to continue representation — which may seem impossible considering SBF’s behavioral concerns raised by the law firm.

Related: Sam Bankman-Fried says he regrets filing for bankruptcy: Report

Recently, Binance CEO Changpeng “CZ” Zhao opened up about the time when Binance was almost ready to bail out FTX from a collapse. Reflecting on the situation, he said:

“When he came to me, I knew he was desperate. If we can’t help him, there’s probably nobody else that would. Probably a bunch of people passed on the deal before us.”

However, the deal for a takeover was called off after a due diligence revealed bigger problems.



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Crypto lender Genesis has no solution yet for withdrawal halts

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Crypto lending platform Genesis has informed its customers that its withdrawal freeze is likely to last “additional weeks” amid efforts to stave off a potential bankruptcy filing.

In a Dec. 7 letter to its customers shared by Genesis to Cointelegraph, interim CEO Derar Islim — who took the temporary helm of the company in August — said it will be weeks for them to formulate a recovery plan that could see withdrawals reopened, stating:

“At this point, we anticipate that it will take additional weeks rather than days for us to arrive at a path forward.”

The letter also stated that Genesis is “working in consultation with highly experienced advisors” and are “evaluating the most effective path to preserve client assets, strengthen our liquidity, and ultimately move our business forward.”

“All other Genesis entities remain fully operational,” the letter added.

Related: Crypto lender Genesis allegedly owes $900M to Gemini’s clients: Report

Genesis Trading, the market maker and lending subsidiary of Digital Currency Group (DCG) first flagged exposure to FTX in a Nov. 10 Twitter thread, revealing that it had $175 million in funds locked on the FTX crypto exchange.

DCG attempted to bail out Genesis with a $140 million cash infusion that same day.

However, this didn’t appear to be enough to resolve its liquidity issues, as Genesis Global Capital froze withdrawals on Nov. 16 citing “unprecedented market turmoil” caused by the collapse of FTX, which led to “abnormal” levels of withdrawals that exceeded its liquidity.

On Nov. 21, the crypto lender denied plans to file for bankruptcy “imminently” after failing to cover a reported $1 billion shortfall in its balance sheet.

Shortly after on Nov. 22, Genesis confirmed that the firm hired investment bank Moelis & Co for restructuring services as a means to avoid the Chapter 11 route.

In the letter, Genesis reaffirmed that it is “committed to being as transparent as possible” to those affected and that customers will be informed of “meaningful developments, including any updates on timing.”



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Pakistan signs in new laws to expedite the launch of CBDC

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The State Bank of Pakistan (SBP) has approved new laws for Electronic Money Institutions (EMIs).

KEY TAKEAWAYS

The SBP plans to launch a CBDC within the next three years.
The World Bank helped Pakistan design the new regulations.
After the passing of the new laws, the SBP will issue licenses to EMIs for CBDC issuance.

The laws target non-bank entities offering digital payment instruments and are geared towards ensuring the timely issuance of a central bank digital currency (CBDC).

Pakistan’s CBDC plan

Pakistan joins the list of governments around the world that see CBDCs as a means to enhance fiat capabilities by bringing on board blockchain technology that powers cryptocurrencies. Following the launch of the new laws, Pakistan targets to launch its CBDC by 2025.

The new laws signed tonto place by the SBP were designed with the help of The World Bank.

In essence, the new laws enable prevention measures against laundering and terror financing while also offering consumer protection and reporting requirements.

Issuing licenses to EMIs for CBDC issuance

The SBP bank will be issuing licenses to EMIs to allow them to issue the CBDC.

While announcing the launch of the new laws, Deputy Governor of SBP Jameel Ahmad said:

“These landmark regulations are a testament of the SBP’s commitment toward openness, adoption of technology and digitization of our financial system.”

The Pakistani Finance Minister Asad Umar also said that promoting the digital economy using EMIs will safeguard financial institutions from cybersecurity threats.

Pakistan’s move towards CBDC comes after the neighbouring country India recently joined the League of Nations in the race to launch homegrown CBDCs as reported in our earlier news. The Reserve Bank of India (RBI) announced that it intended to launch a retail CBDC pilot by the end of 2022.



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Elon Musk alleges SBF donated over $1B to Democrats: “Where did it go?”

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The attempts of mainstream media to water down the frauds committed by FTX CEO Sam Bankman-Fried (SBF) did not fare well in convincing the crypto community and entrepreneurs. Instead, the misinformation campaign collided with Tesla CEO Elon Musk’s drive to position Twitter as “the most accurate source of information.”

The world is yet to overcome the shock after witnessing the legal leniency awarded to SBF for misappropriating users’ funds and shady investment practices via trading firms Alameda Research and FTX. Will Manidis, the CEO of ScienceIO, a healthcare data platform, pointed out that SBF made the “highest ROI trade of all time” by donating $40 million to the right people for getting away with stealing over $10 billion.

On the other hand, Musk alleged that SBF donated over $1 billion to Democratic candidates, which is way more than the publicly disclosed amount of $40 million. SBF previously admitted to making backdoor donations to the Democratic Party. Musk asked:

“His actual support of Dem elections is probably over $1B. The money went somewhere, so where did it go?”

The United States House Financial Services Committee chair Maxine Waters, a Democrat, and ranking member Patrick McHenry, a Republican, have requested SBF to appear in an investigative hearing scheduled for Dec. 13.

To this request, prominent entrepreneurs, including Polygon CEO Ryan Wyatt, informed Waters that “he’s (SBF) a criminal” after being shocked at the leniency shown by the people in power to the fugitive.

Related: FTX collapse drives curiosity around Sam Bankman-Fried, Google data shows

The crypto community openly criticizes paid narratives that try to show SBF in good light. The latest backlash is related to SBF’s interviews in New York Times DealBook Summit and Good Morning America interviews.

Speaking to the news outlets during the ‘apology tour,’ SBF portrayed himself as a victim and got applauded at the end. “Watching SBF’s interview is kind of like watching Casey Anthony’s documentary. They’re so mechanical, they’re so inauthentic in their delivery. If you feel any emotion, at all, it slows people down. The way it is expressed is a separate subjective matter,” said Twitter user and developer Naom.



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