beehiiv-import

⚡Binance Founder CZ Loses $12B🪭

Croxroad

28 Oct 2023 — 4 min read

☕️ GM Dear Plebs!

Here is Crox Road, your daily dose of orange pill that will turn you into a Bitcoin Maxi.

The menu for today:

💸 CZ's Wealth Falls by $12 Billion

The founder of Binance, Changpeng Zhao, known as CZ, likely lost around $11.9 billion because Binance, the big crypto exchange he created, didn't make as much money. This drop means his wealth would be around $17.2 billion. Back in January 2022, he was super rich, with a net worth of about $96 billion, but it has gone down a lot since then. They figure this out by looking at the money Binance makes from people trading cryptocurrencies, using data from various sources like CoinGecko and CCData.

Sure, let me break it down for you. Binance, a big cryptocurrency exchange, used to have the lion's share of the crypto trading market at 62% in the first quarter. They attracted a lot of users with a no-fee promotion. But as time went on, their market share dropped to 51% by the end of the third quarter. This means that they were not the go-to place for trading crypto as much as before. It's interesting to note that Binance didn't respond when CoinDesk asked for their thoughts on this.

🧑‍⚖️ FTX CEO Defends Actions

Sam Bankman-Fried, the former big shot in the crypto world, is in court facing some serious accusations. He's accused of lying to investors, stealing money from his cryptocurrency exchange, FTX, and other shady stuff. He's telling the judge that he was actually following legal advice and acting in good faith. The jury was sent home so the judge could decide which parts of his testimony can be shown to them. This way, Sam and his lawyers get some practice before facing the jury. He's defending his actions, like setting up group chats to delete automatically, by saying it was all part of the plan made by his legal team. He even trusted his lawyers to do stuff like preparing bank account applications for his companies. However, the prosecutors are saying that following legal advice doesn't excuse everything, especially if his lawyers didn't know all the facts. The judge hasn't made a final decision yet, but he's a bit sceptical about some of the arguments. We'll find out on Friday what the jury will get to hear.

Sam Bankman-Fried's court appearance drew a crowd of curious onlookers, including screenwriters, retirees, and others fascinated by his dramatic journey from billionaire to facing serious legal trouble. He's in court after 12 days of prosecution testimony from his former colleagues. If he's found guilty, he could end up spending a long time in prison.

Now, in the U.S., defendants don't have to testify during trials, and it's often advised against, as it opens them up to tough questioning by prosecutors. It also lets the jury form their own opinions, which might not be in the defendant's favour. Some legal experts say that if the jury doesn't believe Sam, it could almost guarantee a conviction.

Despite the risks, many experts following the trial expected Sam to take the stand and tell his side of the story to challenge the prosecutors' version of events. The prosecutors have presented a strong case, relying on statements from Sam's close associates who've already pleaded guilty. They've linked him to using money from his cryptocurrency businesses for various purposes, including repaying lenders and making investments. So, Sam's decision to testify is a significant moment in the trial.

The prosecutors claim that Sam Bankman-Fried tried to hide money transfers between his two companies and their close relationship. They've presented evidence like text messages, spreadsheets, and tweets to support their case. Throughout the trial, witnesses, including his ex-girlfriend and the former CEO of Alameda, have been questioned extensively, and their credibility remains mostly intact.

Sam's defence team argues that he was simply following reasonable business practices as his companies grew rapidly. While he admitted to managerial mistakes after his companies collapsed last year, he insists that he never intended to commit fraud.

Testifying in one's own defence can be a risky move. For instance, Elizabeth Holmes, the founder of Theranos, did so, claiming she didn't mean to defraud investors. She was convicted on four out of 11 counts and sentenced to over 11 years in prison. However, in some cases, it can pay off. People like Tom Barrack and Jean Boustani testified in their defence in separate cases and were acquitted. So, whether Sam's testimony helps or hurts his case remains to be seen.

⤵️ Downside Tasuki Gap

This is a pattern on a stock or cryptocurrency chart that signals a likely continuation of a downward trend. It involves three candles. The first one is a big red one, showing a significant price drop. The second one is also red and indicates that the price continued to fall after a gap down, meaning it opened lower than the previous candle. However, the third candle is green, meaning there's a price increase, but it falls within the gap between the first two red candles. Essentially, this pattern suggests that the downward trend is likely to persist, like a brief pause before the price heads further down.