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Nexo's $3 Billion Arbitration Claim Against Bulgaria: Unveiling the Legal Battle

Nexo, a prominent crypto lending firm, has recently filed a $3 billion arbitration claim against the Republic of Bulgaria following a year-long criminal investigation into the company and its founders. In a press release on Wednesday, Nexo strongly argued that Bulgaria's investigation was unjustified and politically motivated, resulting in significant reputational damage and lost business opportunities estimated to be in the billions. The company, now cleared by the Bulgarian Prosecutor's Office, is seeking reparations for the financial harm suffered as a result of the investigation. Key Points: Nexo is one of 22 investors in Decrypt. The company had to abandon plans for a funding round with leading U.S. banks and an IPO on a major U.S. stock exchange due to the lawsuit. Nexo was finalizing a strategic alliance with a major European football club, which included the launch of a club-branded crypto payment card. Antoni Trenchev, co-founder of Nexo, emphasized that the arbi

## FTX's Digital Wallets Fall Short: Shocking Revelations in Sam Bankman-Fried's Criminal Trial

In a surprising twist during Sam Bankman-Fried's criminal trial, an expert witness revealed that FTX's customers may have owned significantly less in digital assets than they had believed. According to Notre Dame Alumni Professor of Accountancy Peter Easton, who specializes in financial statement analysis, FTX's digital wallets contained closer to $5 billion in crypto during the peak of the industry in November 2021, rather than the estimated $20 billion. Easton's assessment, which was conducted at the request of prosecutors, relied on a comprehensive analysis of bank statements, a large FTX database, documents from lenders, and blockchain data.

A Robust Assessment

Professor Easton emphasized that his assessment was based on meticulous research and analysis, leveraging data from various sources to ensure its robustness. By tapping into bank statements, FTX's extensive database, lender documents, and blockchain records, Easton was able to provide a comprehensive picture of the funds held in FTX's digital wallets.

Comparing On-Chain Balances

During his testimony, Professor Easton presented several charts to the jury, one of which specifically focused on FTX customers' crypto deposits. This graphic compared the on-chain balances of FTX's "sweep" wallets to the customer balances recorded in the exchange's database. Easton explained that when FTX customers deposited funds, their digital wallet address would be swept along to another wallet that pooled customer funds. However, his investigation revealed that at no point since January 2021 did FTX's digital wallets contain funds that matched the combined total stated in customer accounts.

Consistently Trailing by Billions

According to Easton's analysis, FTX's digital wallets consistently trailed behind the total account balances of FTX customers by billions of dollars, with this discrepancy stretching through October 2022. Just days before Bankman-Fried's empire collapsed, the total account balances of FTX customers appeared to be $11.4 billion. However, the reality was that FTX's digital wallets held just over $5 billion.

Final Thoughts

The revelation of the significant difference between FTX customers' perceived digital asset holdings and the actual funds held in FTX's digital wallets is undoubtedly a concerning development in Sam Bankman-Fried's criminal trial. Professor Easton's thorough investigation, which drew on various sources of data, including blockchain records, has shed light on the true state of affairs. As the trial continues, it remains to be seen how this new information will impact the proceedings and the ultimate outcome.


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