Crypto Flipsider News – FTX Diverted $200M; MicroStrategy buys BTC; 3Commas API leak; Celsius extends deadline; Alameda funnels $1.7 million from DailyCoin

©Reuters. Crypto Flipsider News – FTX Diverted $200M; MicroStrategy buys BTC; 3Commas API leak; Celsius extends deadline; Alameda pays out $1.7 million

Read in the digest:

• According to the SEC, FTX diverted $200 million in client funds into two venture deals.

• MicroStrategy buys more BTC – plans to offer Lightning solution in 2023.

• 3Commas claims responsibility for leaking API keys that led to $22 million hack.

• Celsius to extend the deadline for claims as administrative costs rise.

• On-chain data links Alameda Research to $1.7 million being funneled through coin mixers.

FTX diverted $200 million in client funds to two venture deals, per SEC

FTX’s multi-billion dollar collapse left clients insecure about their funds. However, the Securities and Exchange Commission (SEC) has reported that the exchange used $200 million in user funds to invest in two companies.

According to a recent SEC complaint, FTX made two separate $100 million investments through its venture arm FTX Ventures, but both “were funded with FTX client funds that were diverted to Alameda.”

The investments were made in fintech company Dave and Web3 company Mysten Labs in March and September respectively. While FTX had numerous assets, these were the only two disclosed $100 million investments.

Now, with the $2 billion that Bankman-Fried quietly transferred from FTX, the deals have raised questions about potential recovery issues for FTX bankruptcy attorneys and individual clients.

Flipsider:

• FTX Ventures has been described as a $2 billion venture fund that invests in “equity and/or tokens of any check size and blockchain stage.”

Why you should care

The intense scrutiny of FTX since the collapse in early November continues to unearth details of how Bankman-Fried mistreated the company and client funds.

MicroStrategy buys more BTC plans to offer Bitcoin Lightning solution in 2023

Michael Saylor’s MicroStrategy has announced the acquisition of additional Bitcoin (BTC), increasing its stake to approximately 132,500 BTC. In its filing, MicroStrategy announced that its last purchase of 2,500 BTC was made between November 1st and December 24th.

MicroStrategy’s subsidiary bought approximately 2,395 BTC on Dec. 24 at an average price of $17,871, while 810 BTC were bought at $16,845 per coin. The company’s 132,500 BTC was acquired for $4.03 billion at an average price of ~$30,397 per bitcoin.

In a Twitter Space conversation, Saylor, a Bitcoin permabull, said his company will launch software applications and solutions powered by the Bitcoin Lightning Network in 2023.

The enterprise products will include solutions that “support” enterprise marketing and cybersecurity for enterprise websites. He adds that MicroStrategy will likely launch one of the products in the first quarter.

Flipsider:

• The SEC filing also shows that on Dec. 22, MicroStrategy sold 704 BTC for approximately $11.8 million — the company’s first-ever Bitcoin sale.

Why you should care

The products are part of MicroStrategy’s “Lightning for Enterprise” agenda, which aims to help institutions navigate the Bitcoin ecosystem for greater adoption.

3Commas claims responsibility for the API key leak that led to the $22 million hack

After months of refuting community reports that crypto trading service 3Commas was responsible for the leak of API keys that allowed bad actors to steal $22 million worth of crypto, co-founder Yuriy Sorokin confirmed that the leak came from their page came from.

The announcement came after 100,000 API keys belonging to 3Commas users were obtained and released by an anonymous Twitter account on Wednesday. The leaker promised to release the remaining keys after releasing over 10,000.

The admission confused users, considering that on Dec. 11, Sorokin called victims’ reports of a leak “fake evidence” and that a phishing attack led to users divulging their details.

Sorokin said the investigation ruled out the possibility that the leak was an inside job; however, he assured that 3Commas will continue to be transparent in its communications.

Flipsider:

• Victims of the leak are demanding an apology and a refund from 3Commas for being gaslighted over the ordeal.

Why you should care

Meanwhile, 3Commas has asked supported exchanges like Binance, KuCoin, and Coinbase (NASDAQ:) to withdraw all [API] Keys associated with 3Commas.

Celsius is extending the deadline for claims as administration costs rise

Bankrupt crypto lender Celsius Network announced in a Dec. 29 tweet that it would file a motion requesting an extension of the deadline for users to submit claims until early February, starting Jan. 3.

The Claims Procedure allows creditors who believe they are entitled to make claims to file claims during the bankruptcy proceedings.

The Bankruptcy Court for the Southern District of New York will hear Celsius’ filing on January 10, with the current claim period extended through the same date.

The extension notice didn’t sit well with Celsius’ creditors, as it will mean additional management fees that have already totaled $53 million since the company first filed for bankruptcy in July.

Flipsider:

• Since the bankruptcy proceedings, only $44 million of the $4.72 billion in user deposits held by Celsius is earmarked for return to customers.

Why you should care

The deadline is extended to at least January 10, when Celsius is due to be heard in the bankruptcy court.

On-chain data links Alameda Research to $1.7 million being funneled through coin mixers

Just days after founder Sam Bankman-Fried was released on $250 million bail, funds linked to his embattled trading firm Alameda Research have reportedly had over $1.7 million worth of crypto through coin mixers Fixedfloat and Changenow moved.

OXT on-chain researcher Ergo reported that in the past 24 hours, addresses linked to Alameda had exchanged ERC-20 tokens for ETH and USDT. Ergo adds that “ETH and USDT were then routed through instant exchangers.”

On-chain detective Zachxbt further corroborated Ergo’s claims, sharing evidence that the same wallet addresses converted some funds into Bitcoin (11.9 BTC worth nearly $199,000).

Martin Lee, a researcher at blockchain analytics platform Nansen, has also noted that “there has been a lot of activity in the Alameda wallets over the last 6-7 hours” as funds are being consolidated into two wallets.

Flipsider:

• The reactivation of Alameda Research’s wallets has been linked to SBF’s $250 million bail – which previously said he had less than $100,000.

Why you should care

Alameda Research’s surge in on-chain activity appears to be part of a broader plan to obfuscate transaction paths.

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