• Sam Bankman-Fried poached top Wall Street and Silicon Valley talent to build a haphazard business operation.
  • The bankruptcy filing reveals dubious shortcuts SBF's inner circle used to run the $32 billion FTX crypto empire.
  • Bitcoin price is back in the green, although its bullish outlook might only last a while.

The first bankruptcy hearing involving FTX, a fallen crypto empire, revealed how funds were mismanaged by "a small group of inexperienced and unsophisticated individuals." According to James Bromley, the talent hired by Sam Bankman-Fried (SBF) were subject to no checks and balances to control the vast estate.

Cryptocurrency markets have been in a tailspin since the FTX crisis started, with experts predicting a longer crypto winter – perhaps until the end of 2023.

Meet the top Wall Street talent that led FTX to its knees

The founder and former CEO of the defunct FTX hired talent from a renowned firm on Wall Street referred to as Jane Street Group. This star company has been trading crypto for over a decade and enjoyed a high-ranking status before piles of avoidable messes from FTX unraveled, shattering the industry.

Jane Street Group boasts over 2,000 staff nestled in lower Manhattan. It is often eyed for its love for risky market situations and an unmatched preference for stealth. Jane Street Group has maintained its top spot in financial markets by digging into the health of trading partners, modeling potential catastrophes and, above all, restricting employees from making public comments.

Nevertheless, the culture at FTX was nothing compared to that at Jane Street Group – to a large extent, it was the opposite. SBF carefully recruited into his inner circle top talent but with no ethics to build a haphazard crypto operation that has left over one million creditors counting losses.

Caroline Ellison, the CEO of Alameda Research, FTX's trading arm, is a Jane Street Group alumnus. It is alleged that she was SBF's one-time romantic partner. Brett Harrison, who was at the helm of FTX US, also hailed from the Wall Street firm.

Other top names in SBF's circle include Sam Trabucco, who assisted Ellison in managing Alameda before his exit in August, had left Susquehanna International Group to work for SBF. FTX's head of technology, Gary Wang, was once a Google employee, while Constance Wang, the firm's chief operating officer (COO) worked at Credit Suisse Group AG at one point in his career.

FTX found itself in the rabbit hole mainly because of SBF's inner cycle. The pile of evidence now in bankruptcy court shows how FTX did not have any regard for risk control and bookkeeping. They orchestrated secret dealings with some executives receiving unsecured loans. Company funds were used to purchase personal assets.

The Crypto market recovers, is this a dead cat bounce?

Bitcoin (BTC) price reclaimed support at $16,000 before stretching its leg to $16,655. A daily close above the 50-day Exponential Moving Average (EMA) (in red) at $16,527 could have functioned as a springboard to the expected run-up to $20,000.

BTC/USD four chart

BTC/USD four chart

However, a rally is unlikely to hold amid the uncertainties associated with the FTX contagion. Investor confidence is still lacking, a situation that may continue to deprive Bitcoin price of the necessary momentum to sustain an uptrend.

A four-hour to a daily close below the 50-day EMA could exacerbate declines, forcing Bitcoin price to seek refuge at $16,000 and $15,450, respectively.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

FTX’s ex-CEO Sam Bankman-Fried confesses failure of oversight, says “unknowingly commingled funds”

FTX’s ex-CEO Sam Bankman-Fried confesses failure of oversight, says “unknowingly commingled funds”

FTX’s founder claimed that he was unaware of Alameda’s position, which led to the subsequent collapse. Sam Bankman-Fried had earlier blamed FTX’s downfall on “messy accounting” that emanated during the Terra-Luna collapse.

More Cryptocurrencies news

Avalanche price remains submerged, but bulls can come out on top if this happens

Avalanche price remains submerged, but bulls can come out on top if this happens

Avalanche price may be setting up for one more decline targeting the halfway point of the 2020-2021 bull run. Despite this fact, the bulls are showing efforts to refute the bearish stronghold. The $14 price zone is crucial for defining the next directional rally.

More Avalanche news

Hedera Hashgraph (HBAR) Price Prediction: Countertrend bulls seem poised for more gains

Hedera Hashgraph (HBAR) Price Prediction: Countertrend bulls seem poised for more gains

Hedera Hashgraph price shows potential to rally a bit higher before the bears flex their power again. Based on the confounding technicals, HBAR could rise by 12%. Hedera Hashgraph price has rallied by 18% on the month.

More Hedera news

Why the Ethereum price could rally back to $1,375

Why the Ethereum price could rally back to $1,375

Ethereum price has investors watching closely as the recent recovery could be the start of a much larger move. As the bulls trot higher, subtle signs suggest the ETH price could continue to rally. A breach below $1,214 would make void ETH's bullish potential.

More Ethereum news

Bitcoin: Assessing chances of one last bear market rally for 2022

Bitcoin: Assessing chances of one last bear market rally for 2022

BTC is in a good place to trigger another bear market rally from a high-time frame perspective. This development, combined with the optimistic outlook seen in on-chain metrics, further strengthens the possibility of a happy ending to 2022.

Read full analysis

BTC

ETH

XRP