Good morning! FTX’s lawyers painted a startling picture of the company in a bankruptcy court yesterday. But Sam Bankman-Fried continues to imagine how things could have played out differently.
First, a programming note: The newsletter will be taking a break for Thanksgiving, but we’ll be back in your inboxes on Monday. Happy holidays!
A tale of two FTXs
There’s the story of a ruined crypto firn, its reputation in tatters, new leaders chasing down assets, creditors increasingly expecting to never see their money again. And then there’s Sam Bankman-Fried’s dream of what might have been.
FTX’s lawyers spoke out yesterday in the company’s first appearance in a Delaware bankruptcy court. And, oof, it was not pretty.
- “FTX was in the control of inexperienced and unsophisticated individuals, and some or all of them were compromised individuals,” said James Bromley , a lawyer from Sullivan & Cromwell working on the FTX bankruptcy.
- “What we have here is a worldwide, international organization, but which was run as a personal fiefdom of Sam Bankman-Fried,” he added, calling the situation “one of the most abrupt and difficult collapses in the history of corporate America and the history of corporate entities around the world.”
The numbers make for grim reading. In a letter that SBF sent to his former employees, a copy of which was reproduced by The Wall Street Journal , the speed of FTX’s slide is laid bare.
- Heading into the spring, SBF claims, Alameda had borrowed $2 billion from FTX that was backed by what he says was $60bn in collateral. In November, that had shifted to $8 billion borrowed against $9 billion in collateral.
- Bromley also told the court that “substantial amounts of money were spent on things not related to the business” including “homes and vacation properties used by the senior executives” that cost about $300 million.
- The company’s lawyers are now attempting to make sense of a complex web of assets. The company’s new management has said it might take until January to prepare a full overview of assets and liabilities.
Meanwhile, SBF continues to imagine an alternate future, starting with the idea of paying back everyone who has been affected and ending with an arguably delusional dream of how he could have remade FTX.
- “I’m going to do what I can to make it up to you guys — and to the customers — even if that takes the rest of my life,” he wrote in his letter. “I believe that there are billions of dollars of genuine interest from new investors that could go to making customers whole.” But he also admitted that he was worried that might not be possible.
- He also explained how if he’d not filed for Chapter 11, he “could have returned large value to customers and saved the business.”
- And, wistfully calling FTX “something really special,” he painted a picture of what an alternative future could have looked like. “There would have had to be changes, of course,” he wrote. “Way more transparency, and way more controls in place, including oversight of myself.” Hindsight is, indeed, 20/20.
Five technologies reshaping mobility
Technology is changing everything about the way we move through the world. As part of our recent special report about the future of mobility, Protocol’s Satchie Snellings took a close look at some of the technologies that will have the most dramatic impact. Here are some choice cuts.
Data: “Municipalities, automakers, and micromobility startups will all need to rely on data insights to meet their mobility goals, from optimizing traffic flow to building and managing smart infrastructure, determining coordinates for new charging stations and e-bike docks.”
Artificial intelligence: “Will you have an autonomous vehicle in your garage by 2032? Perhaps not, but in the next 10 years we will see autonomous technology evolve and integrate into personal vehicles, public transit, and the transportation of goods across the world.”
All-purpose mobility apps: “The concept of mobility as a service has made a strong entrance into the transportation market in recent years, but the next decade will be all about perfecting and launching those platforms to the public in data-driven cities across the world.”
Sustainable aviation fuels: “Sustainable fuels are currently far more expensive to produce than conventional fuel, and not enough people are making them. While this technology will not arrive at scale in time to significantly lower emissions by 2030, the next decade will be a crucial time for perfecting the formula and the price point.”
Electrification: “We can expect to see other major sources of transit, including railways, buses, and planes go electric over the next decade, and we should not underestimate the emergence of e-micromobility. Over the next decade, we will see even more cities rethinking their infrastructure to support sustainable, electric transit.”A MESSAGE FROM CAPITAL ONE SOFTWARE
Through its cloud and data journey, Capital One also built its own tools to solve for gaps in the market, and key among them? Capital One Slingshot , a new product from Capital One Software that helps organizations manage Snowflake data costs with alerts, recommendations and performance dashboards.
People are talking
Is Dou Shen, the head of Baidu’s AI cloud group, worried about the U.S. chip ban? It deesn’t seem like it :
- “We think the impact is quite limited in the near future … A large portion of our AI Cloud business and even wider AI business does not rely too much on the highly advanced chips.”
Representatives Cathy McMorris Rodgers and James Comer think TikTok misled members of Congress :
- "Some of the information TikTok provided during the staff briefing appears to be untrue or misleading, including that TikTok does not track U.S. user locations."
White House COVID-19 response coordinator Ashish Jha has a pretty strong view on where you should turn for information:
- "You can decide to trust America's physicians, or you can trust some random dude on Twitter. Those are your choices."
Making moves
HP plans to lay off as many as 6,000 employees , or around 10% of its workforce, over the next three years.
Zendesk has gone private via a sale to private equity firms led by Hellman & Friedman and Permira. The deal is worth $10 billion.In other news
Twitter has not paid vendors that it owes, according to The New York Times. It reportedly owes “millions of dollars in back payments” that it has skipped since Elon Musk took over.
Some Meta execs have tried to stamp out trashy content , according to The Wall Street Journal. With “better definitions for low-quality content” they’ve reportedly made a major impact on reducing its circulation.
The U.K is deepening an investigation into Apple and Google over their control of web browsers on mobile devices.
Protests erupted at a Foxconn plant in Zhengzhou, China as workers railed against unpaid wages resulting from restrictions to curb a Covid outbreak.
Does Elon Musk represent what many bosses secretly think? That maybe it’s time for workers to stop complaining and work harder ?
Tax filing websites shared data with Facebook , according to an investigation by The Verge and The Markup. That data sometimes included “users’ income, filing status, refund amounts, and dependents’ college scholarship amounts.”
The Senate will hold a hearing on Taylor Swift. Sorry, no. I mean, it will hold a hearing on a lack of competition in the ticketing industry .
The verdict is in on the Meta Quest Pro headset and it’s … not good .Headline
A MESSAGE FROM CAPITAL ONE SOFTWARE
Through its cloud and data journey, Capital One also built its own tools to solve for gaps in the market, and key among them? Capital One Slingshot , a new product from Capital One Software that helps organizations manage Snowflake data costs with alerts, recommendations and performance dashboards.
TK