2024-02-02 14:00:00
Guy Sarosi, Shaoli Rajwan, Nir Hirshman, Naa Mashiach, Haim Venatia, Ben Samuha, Yuval Roash (photo by Maxim Dinstein, Yael Tzur, Itamar Arieli, shutterstock) Optimism in the crypto market with the reports in recent days that the FTX exchange went bankrupt It will return to all its customers the funds they lost, but with a caveat: the refunds will be made according to the price rates of the crypto-currencies at the time of the bankruptcy and not according to their current price. At the same time, Celsius – the Israeli crypto company – whose collapse in 2022 caused a stir, also issued a statement that it intends to return the amounts lost by its customers. The names in the crosshairs are of course the founder of FTX Sam Bankman-Fried and the founder of Celsius Alex Meshinsky. Bankman’s trial began last October, with what he defined as the “crypto crook”. The billionaire whose get-rich story was initially presented as positive was arrested and charged with fraud after FTX collapsed into bankruptcy, with more than $8 billion of the company’s funds gone. The indictment claims that Bankman used customer funds deposited in FTX and spent them on personal needs, buying properties, and more. The story of Celsius is similar with its collapse in the summer of 2022. The company’s founder, Alex Meshinsky, was arrested last July and the American Securities and Exchange Commission (SEC) filed a criminal case against him for 7 offenses and revealed a series of no less than incredible lies on the part of Celsius and its founder, among them: the guarantees for loans given to customers, a number The customers, the scope of profits, the leverage of the company, the level of revenues and more. The biggest sin of the company, which eventually brought it to its inevitable collapse, is the use of customer balances to pay rewards to customers, or in other words – a pyramid scheme.
More in-
With the announcements by the companies Celsius and FTX that they will return the full funds to their customers, crypto executives are analyzing how the customer refunds will affect the market.
“Good news that delivers a cloud that clouded the entire field of digital currencies”
Naa Mashiach, CEO of the Israeli Bitcoin Association:
“The end of the case and the expected compensation of the customers is good news that removes a cloud that clouded the entire field of digital currencies. It is also a good opportunity to remind and sharpen the importance of checking the body in which you invest your money, also in terms of the existing licenses and the way it works in Western territory. It is also necessary to examine the nature The coins you invest in, do they have a real project behind them or mostly noise and ‘hype’ and of course don’t invest an amount you can’t afford to lose.”
Naa Moshiach. Photography: Yael Tzur
“Returning the money of the shortage arenas certainly restores some of the lost trust”
Attorney Guy Serosi, Chairman (joint) of the Cryptocurrency and Digital Assets Committee at the Bar Association:
“It seems that the surge in the crypto market, combined with the heavy hand of the legislator, is good for the victims of the trading platforms FTX and Ucelsius.
As someone who specializes in complex insolvency cases, the chance that the creditors (investors of the trading arenas) would get money back, seemed to be zero at the time. This is real news. It is important to note that the companies announced that they intend to return all of the funds that the investors lost with them, but at the moment this is still a positive direction and not a closed outline. This is also good news for Israeli holders who are known to have invested in FTX.
We see the crypto world becoming more and more regulatoryly consolidated in America. Bitcoin mutual funds will continue to establish this. Compared to the USA, in Israel the regulation is very strict, maybe even too much, so we have not seen this type of incident.
The return of the money of the shortfall arenas certainly restores some of the confidence that was lost in 2021-2022. Little by little, the world of crypto is taking regulatory shape in Israel and around the world, until it becomes the common domain.”
Attorney Guy Sarosi. Photo: Maxim Dinstein
“The restoration of trust, together with the renewed growth and the tightening of supervision of centralized exchanges, may improve the situation in the global industry and contribute to its continued growth”
Nir Hirschman, Nir Hirschman, CEO of the Crypto Blockchain and Web 3 Forum:
“The fall of FTX was one of the most severe blows that the digital currency market has suffered in recent years. It was not a structural blow, but a moral and image blow. FTX created trusting relationships with consumers and regulators, and was at the forefront of the fight for recognition in the field. This is precisely why their betrayal of consumers, And the terrible fraud they perpetrated created such a big and significant crisis of trust.
The swift action of the law enforcement authorities, the arrests and the prosecution, together with the beginning of the recovery of the funds can help to rebuild the trust, and help to continue to build this financial system, which may eventually, rebuild the entire global financial system.
The restoration of trust, together with the renewed growth and the tightening of supervision of centralized exchanges, may improve the situation in the global industry and contribute to its continued growth.”
Nir Hirshman. Photography: Yael Tzur
“The regulators are indeed showing that they are learning from such test cases, but there is still a long way to go”
Ben Samuha, founder of CryptoJungle and the ‘Crypto Speaking’ community:
During the bankruptcy proceedings there were several attempts to revive the exchange and establish FTX 2.0, claiming that the technology underlying the exchange is successful and provides value. However, in the discussion that took place this week, it became clear that the attempts to raise capital from investors for the purpose of re-establishing the platform were not successful, and therefore this option is dropped from the chapter.
The victims’ money will be returned in full according to the dollar value of their assets on the eve of the collapse of FTX in November 2022. At that time, the price of Bitcoin was about $20,000 per coin, while today it is over $40,000. That means that those who held a whole Bitcoin on the exchange, will receive $20,000 as compensation And not $40,000 according to the current bitcoin price. It is about tens of billions of dollars, according to estimates in the region of 30 billion dollars.
This is an amazing achievement of the bankruptcy-believing company, which managed to locate and take control of many assets, combined with great luck: an AI startup in which FTX invested $400 million and then sold the investment for more than 6 times, the Solana coin (SOL) whose value skyrocketed 5 times, and more.
Even Israelis who kept their money in the stock market, as long as they submitted a request to participate in the lawsuit when it was still possible, will get their money back.
In my eyes, the regulators are indeed showing that they are learning from such test cases, but there is still a long way to go.
Regarding Celsius:
The company was in Chapter 11, i.e. process freeze as part of a rebuilding procedure and to prevent bankruptcy, for over a year. Yesterday it was announced that the company is exiting Chapter 11 and managed to create an arrangement under which 3 billion dollars will be distributed to its million customers through two partners: the crypto exchange Coinbase, and PayPal.
The repayments will be made using both crypto and fiat money (such as dollars), and according to the reconstruction plan – the company will become a bitcoin mining company called Ionic digital. Celsius’ creditors will receive shares in the new company. The full details have not yet been published as to when the funds will be distributed, but unlike In the case of FTX it can be said that it will not be a 100% refund, but as of now it is estimated to be closer to 60%.
Ben Samuha. Photography: Itamar Arieli
“We are witnessing a new phase in which the market is beginning to recover and adjust itself to higher standards of safety and reliability”
Chaim Venetia, CEO and founder of Proxibit:
“The refunds to customers of Celsius and FTX mark a significant milestone in the crypto market, sending a message of optimism and renewed confidence in the world of digital currencies. These processes emphasize the importance of regulation and transparency for businesses operating in the field, while strengthening trust between customers and platforms. We are witnessing a new phase in which the market is starting to recover and adjust itself to higher standards of safety and reliability.”
Haim Venice. Photography: Yael Tzur
“I hope that the investing public knows how to learn from the mistakes it made and act in the right ways as required by the industry”
Shaoli Rajwan, managing partner of the Masterkey venture capital fund:
“The crypto industry has its own laws, to outside observers the crypto industry may create an illusion that the existing laws in the traditional industry also apply to it, but this is absolutely not true. The crypto industry has other laws and also other risks. The only thing that can be trusted is the set of laws inscribed in the system, and it is recommended to verify that” .
The return of customers’ money is a step that establishes trust between the investing public and the regulator, these efforts should be strengthened and encouraged as much as possible.
I am hopeful that the justice system will find the most appropriate ways to bring the guilty to justice. At the same time, I hope that the investing public knows how to learn from the mistakes it made and act in the right ways according to what is required of the industry, such as self-maintenance and the use of decentralized technologies without dependence on centralized factors.”
Shaoli Rajwan, photo: Yael Tzur
#Crypto #execs #analyze #Impact #Celsius #FTX #refunds