We’re long-time advocates of the lost and found bin.

No, they’re probably not going to have your lost item.

A visit to the lost and found always represents that last-ditch Hail Mary attempt to find the AirPods you probably dropped in the first 45 minutes of the museum tour.

But what if the lost and found held $8 billion, just waiting to be claimed?

Why, we’d be turning over every library help desk, concierge, and middle school lobby from here to Beirut trying to get it.

We know, we’re being ridiculous, but $8 billion in lost FTX funds has just found its way back into the bankruptcy team’s coffers.

Is it time for those who lost out on FTX to finally be compensated?

Espresso Shots

☕️ SEC Drops Charges against Ripple CEO

The SEC has decided to drop its charges of security law violations against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen.

Stuart Alderoty, Ripple’s Chief Legal Officer, took to X to celebrate this clear “surrender” by the SEC.

Once this development went public, Ripple’s XRP token rose about 5%.

But despite dropping the lawsuits against Larsen and Garlinghouse, the SEC intends to continue its ongoing legal battle against Ripple.

But it would appear that the SEC has just learned a lesson that my Uncle Randy has known for years. Once you start giving up, life gets a whole lot easier. And also nobody yells at you for passing out in the yard.

☕️ FBI Breaks Up NY Crypto Scheme

The FBI recently charged six individuals in New York with operating an illegal, unlicensed crypto-transmitting business.

One of the six men admitted to an undercover officer that their operation had netted them $30 million in three years.

In addition to violating New York’s crypto licensing laws, an unnamed member of the the cash-to-Bitcoin money laundering operation admitted that some of their clients “made money by selling drugs” and that their largest clients were “hackers” according to the official filing.

Tragically, the six men had only resorted to crime to afford face paint and drums for their off-Broadway production of Blue Man Group.

☕️ Give a Hand to AI

Researchers at Nvidia are claiming that a new AI Agent, Eureka, can program robotic hands to match the dexterity of humans.

Eureka has allowed a robotic arm to accomplish 30 difficult and highly dexterous tasks such as catching a ball, using scissors, and spinning a pen like that one kid from your study hall.

“Reinforcement learning has enabled impressive wins over the last decade, yet many challenges still exist, such as reward design, which remains a trial-and-error process,” said Anima Anandkumar, senior director of AI research at Nvidia, in a company blog post. “Eureka is a first step toward developing new algorithms that integrate generative and reinforcement learning methods to solve hard tasks.”

But once that AI gets its claws into a fidget spinner, we’ll know we’re done for.

Polled Brew

Spilling the Beans

Has FTX’s Missing $8 Billion Finally Been Found? 💸 

Liquidity.

It’s the financial equivalent of motor oil. Any market, and crypto is no exception, needs a certain amount of liquidity to keep the wheels greased and transactions running smoothly.

We’ve already heard that crypto may be bidding the bear market a speedy goodbye as the market positions itself for a Bitcoin bull run.

But if that bull run’s coming, the market will need a certain amount of liquidity.

Well, on that front, we have some good news. Because it seems like a lot of lost funds are about to reenter the crypto space…

In the form of funds paid back to those who lost out on FTX.

The FTX catastrophe back in November of 2022 ushered in the coldest crypto winter on record.

Bitcoin fell 22%, and we weren’t sure that crypto, let alone FTX, would ever recover.

But yes, crypto recovered. Despite our worst fears, we dared to hope for crypto spring. What we never imagined, however, is that those investors holding funds at FTX would ever see that money again.

But since the collapse, the FTX debtor team has been hard at work to scrape and claw that money back and return it to its rightful owners.

Now, nearly one year later, the FTX bankruptcy team believes it will be able to return 90% of the funds lost in the fall of FTX.

Yes, we’re going to see mass restitution under the FTX debtor team's current proposal which, pending approval, could be filed sometime in December.

But there’s an interesting catch.

You might think that the largest claimants would be favored in this development, but no — that privilege goes to the little guys.

According to the FTX bankruptcy team’s amended proposal, claimants with settlements of less than $250,000 can claim their funds without any reduction of claim or payment.

It’s a refreshing prioritization of the underdog. Yes, those victims with larger funds are just as deserving of compensation. But hey, it was almost certainly money they could afford to lose.

And while we’re on the topic of money, it has yet to be explicitly stated whether these repayments will be in crypto or fair-trade USD.

And… it’s fairly unlikely that these claimants will be receiving exactly as much money as they put in.

A passage toward the end of the proposal states:

“Future recoveries for customers and non-customers will depend on many variables, including the resolution of tax and governmental claims, the FTX team's ongoing asset recovery efforts, the results of avoidance action and other litigation, the claims allowance process, the extent to which compliance with Know-Your-Customer procedures reduces the number of filed or accepted claims, fluctuations in the price of digital assets, fluctuations in effective interest rates and staking yields, the price at which illiquid fund, equity, and token investments can be sold, the value of any consideration paid in connection with any successor offshore exchange, the timing of confirmation and effectiveness of the chapter 11 plan, the nature of any arrangements with respect to FTX Digital Markets and the FTX real estate in The Bahamas, the application of the proceeds of assets seized by the Department of Justice and other government agencies, and many other unresolved matters and pending initiatives.”

That’s… a lot of factors that could result in claimants receiving quite a bit less than they put in.

But hey, some money’s better than no money, right?

Back to our liquidity question: How can we be so sure that these reclaimed funds will go back into the crypto market?

Because, as several of the FTX customers told CNBC, the problem wasn’t with crypto, but with FTX.

Rather than let their losses sour them on crypto, it would appear that a fair portion of the claimants intend to double down.

Like Bethany Hamilton getting back on her surfboard after losing an arm in a tiger shark attack, you can’t hold the ocean responsible for the predators it contains.

We can’t help but salute those brave degens who plan to take the money they lost on crypto investing and invest in more crypto.

Strong-hearted investors like these keep the crypto dream alive just as much as that crucial liquidity.

When an airline gives you travel funds for a painfully long flight delay, some of us might call that “free money.”

And the obvious move is to put that toward your next flight.

But the “galaxy brain” move, like those unflappable crypto enthusiasts, is to take those funds and invest in the next big airline.

Crypto 101

Fair Market Value: This is calculated by taking the price of a given asset and comparing it to comparable assets within the open market.

Often applied to real estate contracts with the consideration of comparable properties, fair market value could be used for the FTX debtors to establish the value of their investments under market fluctuations or with or without certain damaging actions from FTX.

The Last Sip

The Last Sip: If AI researchers can use Eureka to develop robotic hands as dexterous as ours, it’s only a matter of time before they start building robotic feet with functional toes and arches. And that invention will almost surely usher us into the darkest, grossest period of the internet to date.

Stay Caffeinated,

Coffee & Crypto Team

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