🐻 Sam gives his side of the FTX story

This is Web3 Seems Legit, the weekly newsletter on all the good, bad and FUDgly news in crypto.

In this issue:

• What's SBF's side of the story? While still a free man, SBF is going around on a media tour trying to convince us that he was clueless to all the crimes.

• What's the strange ties between FTX and Tether? The rabbit hole keeps getting deeper with new reports revealing strange close ties between FTX/Alameda and Tether. Was USDT at the center of all the fraud?

• Why are people suddenly worried about Binance? CZ, the "good guy" of the crypto industry is suddenly causing concern. Whose side is he really on?

What's SBF's side of the story?

After conning millions of dollars out of customers, the disgraced CEO of FTX, Sam Bankman-fried (SBF) is not only roaming free in the Bahamas, but he's also going around doing a PR media tour.

Yesterday, SBF dialled into the much anticipated NYTimes DealBook Summit where he gave his side of the story on the FTX fallout. TL;DR SBF admits that he made mistakes, but still can't admit that he committed fraud.

This thread gives a good play-by-play breakdown of the interview 👇

There's a lot to unpack in this interview. If you're able to look past his fidgeting and shifty eyes, here's what SBF had to say:

• He didn't know how "comingled" FTX and Alameda's funds were.

• FTX US is solvent and should not have been involved.

• His political donations were mostly for pandemic prevention, not for partisan support.

• His donations to traditional media was meant to just support "good" journalism and not influence it in any way.

You can watch the full video of SBF explaining how he had a "bad month" and completely distances himself from any responsibilities 👇

Besides the NYTimes interview, SBF also did a phone interview with journalist Tiffany Tong to clear the air on more rumours. According to SBF:

• He did not have a backdoor built to secretly move funds to Alameda.

• He donated equally to the Republican party, but just kept it secret.

• He believes that the $400M hack was done by a former employee.

• He admits to opening Bahamian withdrawals because he didn't want to be in a country “with a lot of angry people in it".

You can listen to the interviews and decide for yourself: is SBF being truthful or is he lying through is teeth?

To us, it seems like a PR stunt to prop up his image as a young, clueless CEO who just got way in over his head. It goes to show that even during these times, preserving his image is clearly still his main concern.

SBF will be continuing his media tour with a sit-down interview with Good Morning America and an appearance on Twitter Spaces.

We're guessing that it will just be a repeat of his lawyer responses.

What's the strange ties between FTX and Tether?

You know what they say: the more you dig, the more you'll find. That's certainly the case with the FTX rabbit hole as it keeps getting bigger and bigger by the day.

It turns out that there is another partner in crime to FTX - Tether, issuer of the popular stablecoin USDT.

The NYTimes recently reported that in March 2022, FTX made an $11 million investment into FBH Corp, parent holding company of Farmington Bank.

Before the investment, Farmington Bank was only 3 employees and processed on average $10 million of deposits every month. That number jumped to $84 million since FTX came into the picture. A majority of funds was held by only 4 accounts.

But there's more. The chairman of FBH Corp, Jean Chalopin, also owns Deltec Bank. It's not only one of FTX/Alameda's major banking partners, but also Tether's.

Alameda was Tether's second-largest customer and received over $36 billion of USDT. It's suspected that a majority of the funds likely flowed back to Tether through Deltec Bank.

Tether has been at the center of several controversies, including crypto laundering and tax evasion. So, it would be no surprise if FTX/Alameda was just another pawn in Tether's criminal activities.

What's even more interesting is how the Bahamian government is involved. Last week, the attorney general of the Bahamas, Ryan Pinder promised that there is an ongoing investigation on SBF/FTX.

That's great, right? Except for the fact that Pinder use to work at Deltec Bank.

How much more obvious do they want to make this collusion?

Why are people suddenly worried about Binance?

A lot can change very quickly in the crypto space. One week you could be loved, the next week you could be a villain, just like SBF.

It seems like the same thing is now happening to CZ of Binance. After being painted as the "good guy" of centralized crypto since the FTX fallout, some people are beginning to question CZ.

CZ has been openly calling out a number of competitors, including Crypto.com, Coinbase and Kraken. Some think he's purposely creating FUD to kill competition. Others think he is trying to do good by being transparent and calling out issues.

Either way, his tactics are working because Binance now has 75% of all exchange volume.

Is this good or bad?

In other news

Don't let the SBF marketing campaign distract you from everything else happening in crypto:

• Blockfi files for Chapter 11 bankruptcy.

• Telegram CEO confirms that they will build a decentralized exchange and non-custodial wallet.

• Porsche enters web3 with the unveiling of their first NFT collection.

• BMW has applied for web3-related trademarks.