Customers of the exchange continue to question whether it mishandled their funds, with FTX facing an $8 billion hole in its balance sheet. John J. Ray III, who’s handling the exchange’s restructuring, has already warned former customers that many of them won’t get back funds lost in the company’s spiral into bankruptcy.
Bankman-Fried spent much of the time between FTX’s implosion and his arrest on a virtual apology tour, denying trying to commit fraud or break the law to media outlets around the world, while admitting to egregious managerial errors.
“I made a lot of mistakes,” he said late last month by video link at the New York Times DealBook Summit. “There are things I would give anything to be able to do over again. I didn’t ever try to commit fraud on anyone.”
Winners: Loyal Bankers
Financial-technology startups and cryptocurrency firms alike have spent years luring Wall Street workers with the promise of valuable stock options and a chance to trade in the wild — and potentially lucrative — digital-asset markets.
This year, both industries lost their luster. Venture-capital firms pulled back on funding fintech startups as they looked to prioritize companies already turning a profit rather than those chasing growth. Fintech funding dropped 64% to $12.9 billion in the third quarter, the lowest level since the depth of the pandemic, according to CB Insights.
The crypto winter — the Bloomberg Galaxy Crypto Index has slumped 68% this year — has also made life hard for the legions of former Wall Streeters who left their trading desks for the wild west of digital assets.
With both industries now cutting thousands of workers, those bankers who stayed loyal to traditional finance are among the year’s big winners, for now. Banking giants from Goldman Sachs Group Inc. to Citigroup Inc. have started trimming their workforces, and more cuts may be on the way.
Loser: WhatsApping About Deals
At the start of the pandemic, with bankers and traders trapped at home for months on end, employees at the country’s largest banks turned to WhatsApp and other outside messaging apps to stay connected. That ended this year with the culmination of a monthslong probe by US regulators into how global financial firms failed to monitor employees’ communications on unauthorized apps. A dozen banks agreed to pay $2 billion to settle the matter, the largest penalties of their kind.
As part of the investigation, the US forced Wall Street banks to embark on a systematic search through more than 100 personal mobile phones carried by their top traders and dealmakers. The requests had lenders rooting through years of office banter and even personal texts, with banks arranging for outside attorneys to help conduct the reviews.
Now, the world’s biggest banks have to hire compliance consultants to review how they monitor and archive any work-related communications, including on employees’ mobile phones or other personal devices. Call them the WhatsApp cops.
Winners: Banker Haunts
Legions of Wall Street staffers made their way back to offices a bit more regularly this year, with almost half of all employees in the New York metro area back at their desks, according to card-swipe data from Kastle Systems. That’s meant wonders for the thousands of small businesses across the city that rely on worker foot traffic.
Take Monkey Bar. The tony restaurant in midtown Manhattan closed during the pandemic but finally reopened this year. It’s long been a popular haunt for dealmakers to take their power lunches and meet clients for happy hour. Now, many of the steakhouse’s reservations on Resy book up minutes after they become available.
Or wander over to nearby Papillon Bistro & Bar, a popular happy-hour spot located near Jefferies Financial Group Inc. On many weekdays, the bistro is packed with young bankers in Patagonia vests and Loro Piana ankle boots.