The biggest news in the cryptoverse for December 13 includes the arrest of former FTX CEO Sam Bankman-Fried, testimony from new FTX CEO John Ray on what led to the failure of the exchange, and, according to Binance reportedly has billions stored in secret reserves.

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The indictment filed by United States Attorney for the Southern District of New York (SDNY) Damian Williams for the arrest of FTX founder Sam Bankman-Fried includes eight criminal counts.

The charges include conspiracy to commit money laundering, conspiracy to commit wire fraud against customers and lenders, conspiracy to commit commodity and securities fraud, and separate wire fraud against customers and lenders.

The Indictment also includes conspiracy to defraud the United States and violate campaign finance laws.

In addition, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have filed separate charges against the former chief executive.

Binance CEO Changpeng Zhao was unfazed after $1.4 billion worth of assets were withdrawn in one day.

Despite the uncertainties, the CEO believes it is a good idea to run a “withdrawal stress test” on each centralized exchange on a rotating basis.

However, Nansen, a Hong Kong-based blockchain analytics platform, reported that $3 billion worth of assets had been removed from Binance in the past 24 hours.

Former FTX CEO Sam Bankman-Fried (SBF) claims in his scheduled testimony before the US House Committee on Financial Services that he was pressured by the law firm Sullivan & Cromwell to plead filed for bankruptcy for the FTX companies, stating that their motivation for doing so was potential legal and consulting fees.

SBF was scheduled to testify before the US House of Representatives Committee on Financial Services on December 13. However, he was arrested in the Bahamas on December 12, at the request of the US government.

Forbes obtained a draft of Bankman-Fried’s planned testimony and has published it verbatim.

In testimony, SBF claims under ‘Chapter 11’ that it had received a “billion-dollar offer to help make clients feel complete”, shortly after signing off on a nomination for John Ray to take over as director. FTX Overview.

Binance’s publicly reported reserves may only be a fraction of all the assets it owns and the exchange has “more money than it’s leaving,” a source told CryptoSlate, citing people familiar with the matter, including former Binance employees. .

Sources told CryptoSlate that “Binance is safe” as the exchange’s CEO, Changpeng ‘CZ’ Zhao, has disclosed “maybe only half or a fraction of what he actually owns.”

“In the early days of Binance, most of the funds were going directly to CZ, which means that there are reserves behind the reserves.”

Regarding the possible lack of transparency around Binance’s reserves, the sources said that “I should be more concerned if there is no money behind CZ.”

FTX CEO John Ray III, Dec 13 testimony to the US Congress revealed that the bankrupt exchange mixed assets and stored the private keys of the wallets unencrypted.

According to Ray, FTX’s collapse was caused by the failure of corporate controls, the worst he has seen in more than 40 years of handling bankruptcy cases. He noted that the FTX operation was concentrated in the hands of a “very small group of extremely inexperienced and unsophisticated individuals” who did not implement the form of control necessary for a company that owns other people’s money.

Earlier in the day, FTX co-founder Sam Bankman-Fried was arrested in the Bahamas on the orders of the US government. A December 12 press release from the Bahamas Attorney General revealed that the US government .had filed criminal charges against SBF and is likely to request extradition.

US Attorney for the Southern District of New York Damian Williams confirmed the development. Williams said that SBF “was arrested at the request of the US government, based on a sealed indictment filed by SDNY.”

Binance has recorded more than $2 billion in outflows in Ethereum-based tokens since Dec. 12, its highest daily withdrawal since June, according to Nansen data.

When Binance users so aggressively withdrew assets in June, the crypto market was reeling from the collapse of Terra Luna.

A seperation cheep from the blockchain intelligence platform reported that the exchange recorded more than $2.5 billion in withdrawals in the last 24 hours and has a negative net flow of $1.57 billion. The exchange had an inflow of around $935 million during this period.

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Less than 12% of the current supply of Bitcoin (BTC) is held on exchanges, marking a new low since January 2018, according to Glassnode data analyzed by CryptoSlate.

The chart below shows the balance of BTC held on exchanges with the orange line and starts in January 2018, when the balance was just above 10.8%.

BTC balance on exchanges

The exchanges’ BTC reserves grew exponentially between January 2018 and January 2020, when the COVID-19 pandemic began. In January 2020, almost 18% of all BTC supply was held on exchanges. After that spike, the amount of BTC held on exchanges began to steadily decline, falling to as low as 12% today.


In the last 24 hours, Bitcoin (BTC) rose 4.01% to trade at $17,717.64, while Ethereum (ETH) rose 4.92% to trade at $1,316.80.

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This post SBF faces 8 criminal charges; Binance allegedly has billions in undisclosed reserves

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