Canada's biggest pension fund, CPP Investments, has ended its nearly year-long effort of studying investment opportunities in the volatile crypto market, Reuters reported Wednesday, citing people familiar with the matter. From the report: The reasons behind CPPI's abandonment of crypto research were not immediately clear. CPPI declined to comment but said it has made no direct investments in crypto. It referred to previous comments on cryptocurrency by its CEO, John Graham, in which he sounded a note of caution. CPPI's Alpha Generation Lab, which examines emerging investment trends, had formed a three-member team in early 2021 to research crypto currencies and blockchain-related businesses, with a view to taking potential exposure, the people added.

The U.S. Federal Trade Commission (FTC) is investigating several unnamed crypto firms over deceptive or misleading crypto advertising, according to a Bloomberg report. Decrypt reports: "We are investigating several firms for possible misconduct concerning digital assets," the FTC spokeswoman Juliana Gruenwald Henderson said in a statement. Henderson declined to share further information about which firms are the subject of the probe or what had prompted the Commission to launch investigations.

According to the FTC's website, "when consumers see or hear an advertisement, whether it's on the Internet, radio or television, or anywhere else, federal law says that ad must be truthful, not misleading, and, when appropriate, backed by scientific evidence." Additionally, the agency enforces laws that require truth in advertising, including rules that individuals disclose when they have been paid for endorsements or reviews. "While we can't comment on current events in the crypto markets or the details of any ongoing investigations, we are investigating several firms for possible misconduct concerning digital assets" an FTC spokesperson told Decrypt.

Crypto broker Genesis and its parent company Digital Currency Group (DCG) owe customers of the Winklevoss twins' crypto exchange Gemini $900 million, the Financial Times reported on Saturday. Reuters reports: Crypto exchange Gemini is trying to recover the funds after Genesis was wrongfooted by last month's failure of Sam Bankman-Fried's FTX crypto group, the newspaper said, citing people familiar with the matter. Venture capital company Digital Currency Group, which owns Genesis Trading and cryptocurrency asset manager Grayscale, owes $575 million to Genesis' crypto lending arm, Digital Currency Chief Executive Barry Silbert told shareholders last month.

Gemini, which runs a crypto lending product in partnership with Genesis, has now formed a creditors' committee to recoup the funds from Genesis and its parent DCG, the report added. Separately, Coindesk on Sunday reported that creditor groups in negotiation with Genesis currently account for $1.8 billion of loans, with that number likely to continue to grow. A second group of Genesis creditors, with loans also amounting to $900 million, is being represented by law firm Proskauer Rose, CoinDesk said citing a source. Further reading: Sam Bankman-Fried Says He Will Testify Before Congress On FTX Collapse

An anonymous reader quotes a report from BleepingComputer: A previously undocumented data wiper named CryWiper is masquerading as ransomware, but in reality, destroys data beyond recovery in attacks against Russian mayor's offices and courts. CryWiper was first discovered by Kaspersky this fall, where they say the malware was used in an attack against a Russian organization. [...] CryWiper is a 64-bit Windows executable named 'browserupdate.exe' written in C++, configured to abuse many WinAPI function calls. Upon execution, it creates scheduled tasks to run every five minutes on the compromised machine.

Next, it contacts a command and control server (C2) with the name of the victim's machine. The C2 responds with either a "run" or "do not run" command, determining whether the wiper will activate or stay dormant. Kaspersky reports seeing execution delays of 4 days (345,600 seconds) in some cases, likely added in the code to help confuse the victim as to what caused the infection. CryWiper will stop critical processes related to MySQL, MS SQL database servers, MS Exchange email servers, and MS Active Directory web services to free locked data for destruction.

Next, the malware deletes shadow copies on the compromised machine to prevent the easy restoration of the wiped files. CryWiper also modifies the Windows Registry to prevent RDP connections, likely to hinder intervention and incident response from remote IT specialists. Finally, the wiper will corrupt all enumerated files except for ".exe", ".dll", "lnk", ".sys", ".msi", and its own ".CRY", while also skipping System, Windows, and Boot directories to prevent rendering the computer completely unusable. After this step, CryWiper will generate ransom notes named 'README.txt,' asking for 0.5 Bitcoin (approximately $8,000) in exchange for a decrypter. Unfortunately, this is a false promise, as the corrupted data cannot be restored.

European Central Bank officials argued on Wednesday that bitcoin is "rarely used for legal transactions," is fuelled by speculation and the recent erosion in its value indicates that it is on the "road to irrelevance," in a series of stringent criticism (bereft of strong data points) of the cryptocurrency industry as they urged regulators to not lend legitimacy to digital tokens in the name of innovation. From a report: The value of bitcoin recently finding stability at around $20,000 was "an artificially induced last gasp before the road to irrelevance â" and this was already foreseeable before FTX went bust and sent the bitcoin price to well down below $16,000," wrote Ulrich Bindseil and Jurgen Schaaf on ECB's blog.

The central bankers argue that bitcoin's conceptual design and "technological shortcomings" make it "questionable" as a means of payment. "Real bitcoin transactions are cumbersome, slow and expensive. Bitcoin has never been used to any significant extent for legal real-world transactions," they wrote. Bitcoin also "does not generate cash flow (like real estate) or dividends (like equities), cannot be used productively (like commodities) or provide social benefits (like gold). The market valuation of bitcoin is therefore based purely on speculation," they wrote.

Former FTX head Sam Bankman-Fried (SBF) selected cryptocurrency vlogger Tiffany Fong for a series of lengthy and candid telephone interviews. In the two interviews that had been released on YouTube at press time, SBF speaks about many of the major questions connected with the collapse of FTX. CoinTelegraph reports: The first interview was conducted Nov. 6 and released Nov. 29 on YouTube. [...] The recording began with SBF saying, "You don't get into the situation we got in if you, like, make all the right decisions." Taking her cue from that, Fong started her interview by asking about the "backdoor" that allowed SBF "to execute commands that could alter the [FTX] company's financial records without alerting others." SBF expressed surprise at the very idea. "And this is something I would be doing?" he asked. "That I can tell you is definitely not true. I don't even know how to code. [...] I literally never even opened the code for any of FTX." This set the tone for the rest of the conversation, in which Fong politely asked hardball questions and SBF answered with seeming openness.

SBF went on to comment on FTX's FTT coin. "I think it had real value. That being said, there are a few problems. [...] This was f*****g embarrassing given my background. [...] I think it was basically more legit than a lot of tokens in some ways. Its was more economically underpinned than the average token was," he said. "Illiquidity didn't cause the crash," SBF continued. Rather, it was "the massive correlation of things during market moves, especially when they are triggered by fear over the position itself." SBF agreed with Fong that "the recovery looks pretty slim" for international customers, while "U.S. is a hundred percent. If its Amazon account had not been turned off, "they could already be withdrawing." Speaking about his political activities, SBF said, "I donated about the same to both parties. [...] All of my Republican donations were dark." [...]

In the second, undated, phone interview, SBF addressed the use of FTX customer funds by Alameda Research. Struggling for words, SBF said that he should have thought more about "what a hyper-correlated cross-scenario looks like. It's the oldest game in the book in finance. [...] There was no one person in charge of monitoring risk positions at FTX." Fong pressed for specifics from the situation, with little success. SBF took a moderate position on the role of Binance CEO Changpeng Zhao (CZ) in the FTX downfall. "Things would certainly be a lot more stable and there would be a lot more ability to generate liquidity [...] and I don't know for sure." Asked about the impact of the collapse of FTX and surrounding scandal on him, SBF said, "I wake up each day and think about what happened, and I have hours per day to ruminate on it. [...] It's different than what it seems to other people."

Newly-bankrupt crypto lending platform BlockFi has filed a lawsuit against Sam Bankman-Fried's holding company Emergent Fidelity Technologies seeking his shares in Robinhood that were pledged as collateral earlier in November. CoinTelegraph reports: The suit was filed on Nov. 28 in the United States Bankruptcy Court for the District of New Jersey just hours after BlockFi filed for Chapter 11 bankruptcy in the same court. As per the filing, BlockFi is demanding Emergent turnover collateral as part of a Nov. 9 pledge agreement that saw Emergent agree to a payment schedule with BlockFi that it has allegedly failed to pay.

BlockFi names the collateral as "including certain shares of common stock." In May, Bankman-Fried acquired a 7.6% stake in the online brokerage firm Robinhood, buying a total of $648 million in Robinhood shares through his Emergent investment company.

Coinsquare, one of Canada's largest cryptocurrency exchanges, may have been breached, but the company claims customer assets are "secure in cold storage and are not at risk." CoinDesk reports: The exchange, which touts itself as "Canada's trusted platform to securely buy, sell and trade Bitcoin, Ethereum, and more," emailed customers Friday to report a "data incident" in which an unauthorized third party accessed a customer database containing personal information. According to the email, the breach exposed "customer names, email addresses, residential addresses, phone numbers, dates of birth, device IDs, public wallet addresses, transaction history, and account balances." Although the email was sent Friday, Coinsquare discovered the breach last week and notified customers via Twitter. "No passwords were exposed. We have no evidence any of this information was viewed by the bad actor," the email stated.

Coinsquare suspended activities on its platform after detecting the vulnerability last week, triggering speculation of possible liquidity issues, given the momentous implosion of multi-billion-dollar crypto exchange, FTX, earlier this month. Full service was restored on Friday, according to a tweet. "We want to reiterate that 100% of client funds are safely held in cold storage and are not used for business activities," the company tweeted.

BlockFi, a cryptocurrency lender and financial services firm, filed for bankruptcy on Monday, becoming the latest company in the crypto industry hobbled by the implosion of the embattled exchange FTX. From a report: BlockFi had been reeling since the spring, when the collapse of several influential crypto firms pushed the market into a panic, sending the value of cryptocurrencies like Bitcoin plunging. In June, FTX agreed to provide the company with a $400 million credit line, which BlockFi's chief executive, Zac Prince, said would provide "access to capital that further bolsters our balance sheet." The deal also gave FTX the option to buy BlockFi.

But that agreement meant that BlockFi was financially entangled with FTX, and its stability was thrust into uncertainty this month after a series of revelations about corporate missteps and suspicious management at FTX. A few days after the exchange collapsed, BlockFi suspended withdrawals, explaining that it had "significant exposure" to FTX, including undrawn amounts from the credit line and assets held on the FTX platform. BlockFi is not the first crypto lender to collapse in a devastating year for the industry. After the spring crash, in which Bitcoin fell 20 percent in a week, two other lenders, Celsius Network and Voyager Digital, filed for bankruptcy. BlockFi, which is based in Jersey City, N.J., was created in 2017 and, as of last year, claimed more than 450,000 retail clients who can obtain loans in minutes, without credit checks. "We are just at the beginning of this story," Flori Marquez, a co-founder of BlockFi, told The New York Times in September. But its business has attracted close scrutiny from regulators.

Long-time Slashdot reader destinyland writes: A new book identifies "26 Lines of Code That Changed the World." But its cheeky title also incorporates a comment from Unix's source code — "You are Not Expected to Understand This". From a new interview with the book's editor:

With chapter titles like "Wear this code, go to jail" and "the code that launched a million cat videos," each chapter offers appreciations for programmers, gathering up stories about not just their famous lives but their sometimes infamous works. (In Chapter 10 — "The Accidental Felon" — journalist Katie Hafner reveals whatever happened to that Harvard undergraduate who went on to inadvertently create one of the first malware programs in 1988...) The book quickly jumps from milestones like the Jacquard Loom and the invention of COBOL to bitcoin and our thought-provoking present, acknowledging both the code that guided the Apollo 11 moon landing and the code behind the 1962 videogame Spacewar. The Smithsonian Institution's director for their Center for the Study of Invention and Innovation writes in Chapter 4 that the game "symbolized a shift from computing being in the hands of priest-like technicians operating massive computers to enthusiasts programming and hacking, sometimes for the sheer joy of it."

I contributed chapter 9, about a 1975 comment in some Unix code that became "an accidental icon" commemorating a "momentary glow of humanity in a world of unforgiving logic." This chapter provided the book with its title. (And I'm also responsible for the book's index entry for "Linux, expletives in source code of".) In a preface, the book's editor describes the book's 29 different authors as "technologists, historians, journalists, academics, and sometimes the coders themselves," explaining "how code works — or how, sometimes, it doesn't work — owing in no small way to the people behind it."

"I've been really interested over the past several years to watch the power of the tech activists and tech labor movements," the editor says in this interview. "I think they've shown really immense power to effect change, and power to say, 'I'm not going to work on something that doesn't align with what I want for the future.' That's really something to admire.

"But of course, people are up against really big forces...."

Binance has released its proof-of-reserves system, starting with bitcoin, in order to show that the exchange is healthy and solvent. From a report: This comes just weeks after rival exchange FTX collapsed, after seemingly swapping user funds for other, more illiquid tokens -- eventually leading to a liquidity crisis. Binance's goal is to show that it holds its users' assets in the same tokens that they have deposited. For bitcoin, Binance has provided a snapshot of account balances and the exchange's bitcoin reserves. It claims it has 582,485 bitcoin in its reserves, while its users have a net balance of 575,742 bitcoin -- giving it a margin of 6,743 bitcoin. It also provided a link for Binance users to verify their own bitcoin on the exchange.

A new working paper by Matthew Ferranti -- a fifth-year PhD candidate in Harvard's economics department and advisee of Ken Rogoff, a former economist at the IMF and the Federal Reserve Board of Governors who is now a Harvard professor -- has caused a minor splash. From a report: In it, Ferranti argues that it makes sense for many central banks to hold a small amount of Bitcoin under normal circumstances, and much more Bitcoin if they face sanctions risks, though his analysis finds gold is a more useful sanctions hedge. DFD caught up with Ferranti at Harvard's Cabot Science Library to discuss the working paper, which has not been peer-reviewed since its initial publication online late last month.

What are the implications of your findings?
You can read op-eds, for example in the Wall Street Journal, where people say, "We overused sanctions. It's going to come back to bite us because people are not going to want to use dollars." But the contribution of my paper is to put a number on that and say, "Okay, how big of a deal is this really? How much should we be concerned about it?" The numbers that come out of it are that yeah, it is a concern. It's not just you change your Treasury bonds by 1 percent or something. It's a lot bigger than that.

Rather than hedging sanctions risk with Bitcoin, shouldn't governments just avoid doing bad things?
There's not just one thing that gets you added to the U.S. sanctions list. If the only thing that could get you sanctioned, for example, was to invade another country, then most countries, as long as they don't plan to invade their neighbors, probably don't need to care about this at all, and so my research becomes less relevant. But it's kind of a nebulous thing. That might make countries pause and think about, "How reliable is the U.S?" The paper doesn't say anything about whether applying sanctions is a good or bad thing. There's a huge literature on how effective sanctions are. And I think the number that comes out of that is like a third of the time they work. Of course, they can have unintended consequences, like hurting the population of the country that you're sanctioning.

So why would a central bank bother with Bitcoin?
They're not correlated. They both sort of jump around, so there's diversification benefit to having both. And if you can't get enough gold to hedge your sanctions risk adequately -- think about a country that has very poor infrastructure, doesn't have the capability to store large amounts of gold, or countries whose reserves are so large that they simply cannot buy enough gold. Places like Singapore and China. You can't just turn around and buy $100 billion of gold.

Cryptocurrencies and NFTs have been formally disallowed from Grand Theft Auto Online's popular role-playing (RP) servers. That's according to a new set of guidelines posted on Rockstar's support site last Friday. From a report: In the note, the game's publisher says its new RP server rules are aligned with Rockstar's existing rules for single-player mods. Both sets of rules prohibit content that uses third-party intellectual property, interferes with official multiplayer services, or makes new "games, stories, missions or maps" for the game. This means RP servers based on re-creating Super Mario Kart in the Grand Theft Auto world, for instance, could face "priority in enforcement actions" from Rockstar. But the new RP guidelines surpass the existing single-player mod guidelines in barring "commercial exploitation." That's a wide-ranging term that Rockstar says specifically includes selling loot boxes, virtual currencies, corporate sponsorships, or any integrations of cryptocurrencies or "crypto assets (e.g. 'NFTs')."

Most addresses holding bitcoin (BTC), the largest cryptocurrency, are now in the red, the first time that's happened since the start of the coronavirus-induced crash of March 2020. CoinDesk reports: Just over 51%, or 24.6 million addresses of the total 47.9 million, are below purchase price on their investments, according to data provided by blockchain analytics firm IntoTheBlock. About 45% are in the money, which means they are boasting unrealized gains, while the rest are roughly at break-even. IntoTheBlock defines out-of-the-money addresses as those that acquired coins at an average price higher than bitcoin's going market rate of $16,067.

The bearish momentum looks overdone, according to Lucas Outumuro, head of research at IntoTheBlock. Previous bear markets ended with the majority of addresses being out of-the money. The percentage of out-of-the-money addresses stood at 55% in January 2019. Bitcoin bottomed near $3,200 around the same time and began a bull run three months later. Further reading: Silence From Digital Currency Group's Genesis Spooks Crypto

An anonymous reader quotes a report from Reuters: FTX founder Sam Bankman-Fried sold a stake in the company worth $300 million when the crypto exchange raised capital last year, the Wall Street Journal reported on Friday, citing the firm's financial records and people familiar with the transaction. At the time, Bankman-Fried told investors it was a partial reimbursement of money he'd spent to buy out rival Binance's stake in FTX a few months earlier, the report added. The Journal's report cited FTX's October 2021 funding round where the company had raised $420 million from a clutch of big name investors including Temasek and Tiger Global, valuing the crypto exchange at $25 billion.

Nayib Bukele, the president of El Salvador, announced late Wednesday that his government plans to buy one Bitcoin every day starting on Thursday. Gizmodo reports: The current price of one Bitcoin is roughly $16,540, down 1.5% from a day earlier and down 73% from a year ago. Bitcoin was trading at an all-time high of over $68,000 in November 2021 when El Salvador was purchasing large quantities of Bitcoin. President Bukele has already lost El Salvador tens of millions of dollars, according to the latest calculations by Bloomberg News. El Salvador hasn't publicly confirmed how many bitcoin purchases the country has made, but based on Bukele's tweets we can determine he's purchased 2,381 Bitcoin since the start of his experiment. The price for all the country's Bitcoin holdings has totaled $105 million to purchase, according to Bloomberg, while the current worth is roughly $39.4 million. Bukele would've been smarter just holding U.S. dollars as cash, even with annual inflation at almost 8%.

Despite declaring Bitcoin an official currency in El Salvador in late 2021, few people are actually using the crypto for purchases in the country. And one of the common reasons cited for declaring it a currency, sending remittances back to the country from abroad, has been a bust as well. Roughly $6.4 billion dollars was sent as remittances to El Salvador from September 2021 until June 2022, but less than 2% of those were in cryptocurrency, according to Reuters. The Bitcoin experiment has also caused El Salvador's credit rating to get knocked down repeatedly, with the country's rating currently sitting at CC, due to the likelihood it will default on bond obligations that are coming due in 2023, according to CoinDesk.

The embattled and now bankrupt cryptocurrency exchange FTX may owe more than a million people money, according to a Tuesday court filing (PDF). Motherboard reports: "The events that have befallen FTX over the past week are unprecedented. Barely more than a week ago, FTX, led by its co-founder Sam Bankman-Fried, was regarded as one of the most respected and innovative companies in the crypto industry," the filing notes. "FTX faced a severe liquidity crisis that necessitated the filing of these [bankruptcy] cases on an emergency basis last Friday. Questions arose about Mr. Bankman-Fried's leadership and the handling of FTX's complex array of assets and businesses under his direction."

The filing goes on to state that, originally, it was thought that there were "over one hundred thousand creditors in these Chapter 11 Cases." It then states that, "in fact, there could be more than one million creditors," meaning that FTX could owe money to more than a million people, the vast majority of whom are customers and former customers. The filing is an attempt to consolidate and simplify the bankruptcy process; as noted in an earlier filing, FTX operated a highly complex corporate structure with dozens of companies, each of which filed for bankruptcy separately last week. The fate of customers' money is still up-in-the-air as FTX halted withdrawals last week. According to the Wall Street Journal, FTX founder Sam Bankman-Fried thinks he can raise enough money to make users whole. "Mr. Bankman-Fried, alongside a few remaining employees, spent the past weekend calling around in search of commitments from investors to plug a shortfall of up to $8 billion in the hopes of repaying FTX's customers," WSJ reports. "The efforts to cover that shortfall have so far been unsuccessful."

With the cryptocurrency market becoming ever more complex and intimidating, California Attorney General Rob Bonta had decided to issue guidance for novice crypto buyers. CoinTelegraph reports: The California Office of the Attorney General's website now features a page that will help those new to crypto "avoid the hype, [and] get the facts." "Don't fall for a fantasy -- Cryptocurrency, like all investments, carries significant risks, and there's no guarantee that you'll see large -- or any -- returns," Bonta said in a statement. "Our new webpage is meant to be a resource for Californians curious about this new and volatile market."

The new page emphasizes customer safety. It provides a two-sentence explanation of what "crypto assets" are, plus a vocabulary list, and warns that: "Even when there are no scams involved, crypto assets can be risky, especially if you don't have enough information to make sound judgments about how you're spending your money."

Aside from that, the page concentrated on scams, red flags and how to "stay safe." That information is concise but complete. It reminded the reader of the limit legal recourse available if problems arise with a cryptocurrency purchase, but gave detailed instructions on how and where to file a complaint. Besides explaining what a rug pull and pig butchering are, the guide reminded readers that celebrities are paid for what they say about crypto and that the wise buyer does not fall for Fear of Missing Out.

Long-time Slashdot reader kid_wonder writes: BlockFi, a crypto exchange, had suspended withdrawals on Friday and now appears to be having serious issues directly related to the FTX meltdown. In an email to customers this morning they said: "The rumors that a majority of BlockFi assets are custodied at FTX are false. That said, we do have significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX US. While we will continue to work on recovering all obligations owed to BlockFi, we expect that the recovery of the obligations owed to us by FTX will be delayed as FTX works through the bankruptcy process.

At this time, withdrawals from BlockFi continue to be paused. We also continue to ask clients not to submit any deposits to BlockFi Wallet or Interest Accounts." Reuters has a list of some firms who have given information about their exposure to FTX.

"The collapse of FTX will likely give rise to a number of criminal and civil actions against the exchange and its executives, like former FTX CEO Sam Bankman-Fried," reports CoinDesk, citing a number of legal experts. "It's also likely to push forward actual regulatory changes, either via lawmakers or through federal agencies themselves." An anonymous reader shares an excerpt from the report: FTX filed for bankruptcy last Friday, days after halting withdrawals and a little over a week after CoinDesk first reported that the balance sheet of FTX sister company Alameda Research held a surprisingly large amount of FTT, an exchange token issued by FTX. FTX was "fine," Bankman-Fried said in response to questions about his exchange's solvency, before a series of events showed otherwise. As a result, several state and federal agencies launched or expanded investigations into the company, including the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the Securities Commission of the Bahamas and the Bahamas' Financial Crimes Investigation Branch. Members of the U.S. Congress from both political parties are also calling for further action as a result of the collapse. Some lawmakers are even talking about holding hearings, potentially by the end of the year, said Ron Hammond of the Blockchain Association.

The fact that regulators apparently had no view into some of the major projects that fell apart this year -- such as Celsius, Three Arrows, Luna and now FTX -- is "precisely the problem," said an industry participant who works closely with policymakers. Still, the individual told CoinDesk that they don't expect any major legislative action to occur this year. Most likely, Congress will look at bills like the Digital Commodities Consumer Protection Act, a bill that Bankman-Fried supported but was written prior to that, in the upcoming year. According to an attorney who requested anonymity, the SEC may have an easier time kicking off the investigation just due to its mandate. "The SEC is in a much better position to go to court and get a freeze [on assets] if they believe there's a reason to do that," the attorney said. "The SEC also has a less cumbersome process for subpoenaing testimony and freezing documents." The SEC and DOJ are likely to cooperate though, to the extent that DOJ investigators may sit in on SEC interviews.

FTX has various U.S. connections, which is all the SEC and DOJ need to assert jurisdiction for their investigations. FTX appears to be preparing for these investigations, with FTX US General Counsel Ryne Miller having already told the entire company to preserve documents. A former federal prosecutor told CoinDesk that the bankruptcy court may also shed light on the situation, thus assisting government investigators with their probes. "The bankruptcy court has the ability to now oversee the company and to obtain information from the company that, let's say the DOJ might not have been able to obtain as easily pre-bankruptcy, and they'll likely have access to a new trustee or an examiner and be able to learn in essentially real-time what's going on," the former prosecutor said. Executives like Bankman-Fried may also "be in a tough spot with respect to" deciding whether to cooperate or assert Fifth Amendment rights against self-incrimination, the former prosecutor added. "A complicating factor -- for FTX anyway -- may be the fact that Bankman-Fried has tweeted his way through his company's collapse," adds CoinDesk.

"It's a complete nightmare," said Ken White, a former federal prosecutor and a partner at the Brown White & Osborn law firm. "This is a situation where all sorts of agencies are going to be looking at this, the SEC, the FTC, and probably the Department of Justice. There are all sorts of potential criminal and civil consequences -- lawsuits. Civil lawsuits are a certainty. And here he is sort of tweeting out his thoughts about it. It's every attorney's nightmare of what a client might do."

The main issue being that Bankman-Fried repeatedly took to Twitter to reassure users that everything was fine. "It creates new bases for criminal or civil claims against him just based on those tweets," White said. "So if he says that everything's fine, that their assets are real assets, and that's not true, then that can be securities fraud, and wire fraud, all sorts of other stuff, not to mention all sorts of civil causes of action ... It is just disastrously reckless."