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Slowly but surely, state by state, the U.S. is becoming more cannabis-friendly. As the number of states where weed is legalized (or at least decriminalized) grows, so too does the number of companies building amazing products for cannabis users.

Got a friend who partokes and lives somewhere cool about it? Why not upgrade their experience with some fancy cannabis-focused tech this holiday season? The following gifts represent a range of products from startups, makers, and housegood companies attempting to break into the massive market.

There’s something here for everyone — from consumption devices to storage containers to coffee table items. None of these fit the bill? Give a pre-roll. Everyone loves a good pre-roll.

This article contains links to affiliate partners where available. When you buy through these links, TechCrunch may earn an affiliate commission.

DynaVap

DynaVaps are my go-to. They’re pocketable and produce a great cloud of vapor. Think of it as a one-hitter vape with a thermometer. First heat the tip with a torch or induction heater; the cap will click in about 3 to 5 seconds, notifying the user that the herb is at the right temperature and ready to hit. The cannabis lasts about three to four cycles. Since the cap protects the ground flower from the flame, there’s no combustion or smoke — just vapor — and very little smell.

DynaVap vaporizers are CNC machined in the company’s DeForest, Wisconsin, facility. George Breiwa started the company in 2015 and currently employs around 40 people. The company sells several versions of the little metal vape, starting with the $50 “B” and ending with the $220 titanium Omni.

Word of warning: I’ve given a lot of DynaVaps to friends, and I’ve found people either love it or hate it. It takes a bit of practice to get a good cloud.

Puffco Proxy

Puffco has long led the market with innovative cannabis vaporizers. The Puffco Peak Pro is easily one of the best e-rigs available, and the company just unveiled a new vape called the Proxy. It offers the best of the Peak Pro and can be built into various form factors.

Don’t be distracted by the lovely pipe. That’s just a piece of glass. The Proxy slides into the glass piece. Think of the Proxy as a modular dabbing rig, able to fit into any form factor made for the unit. Bubbler? Sure. Glass beaker? Yep. Pipe? Obviously.

The $299 self-contained rig is about the size of a taller D-cell battery. Inside is the same heating element found in the company’s other flagship product, the Peak Pro. The battery can be recharged over USB-C, and the unit comes preprogrammed with four different heat levels.

Hitoki Saber

Get this: The Hitoki Saber uses a high-powered laser to light a bowl. It’s not cheap, but it’s a great (and fun) alternative to butane lighters. Just hit the button, and a laser shoots into a packed bowl. Best of all, with the right adapter it works with any glass piece. Also best of all,lasers.

The Saber is the second device from Hitoki, which debuted its laser system with the all-in-one Trident rig. The Trident is much larger than the Saber but features an integrated water chamber and mouthpiece.

Lighting your pot with lasers isn’t a cheap solution. Both of the Hitoki products carry hefty prices: The Saber costs $359, and the Trident is $499.(opens in a new window)

KushKards

KushKards are great. As I said above, if you don’t have anything else for the stoner in your life, give them a pre-roll. If you want that pre-roll to look extra special, tuck it in a KushKard.

Each of these clever greeting cards has a special spot meant to hold a pre-roll and is designed around cute one-liners like “joint to the world” or “light up the holidays.”

The cards start at $7 and include the option to bundle a holiday-themed one-hitter.

Houseplant Car Lighter

Seth Rogen’s weed brand makes and sells terrific cannabis products. The best one? It’s the Car Lighter. It’s a fun repurposing of the classic, pop-out car lighter we all burned our thumbs on as kids, now housed in a hefty block that’s perfect for a coffee table. Just push the lighter down — a few seconds later, it will pop up ready to light your next joint.

The Car Lighter is made out of marble and is available in two colors: green and gray. At $280, it’s a bit of a statement piece.

Green: A Field Guide to Marijuana

Green: A Field Guide to Marijuana is a lovely coffee table book filled with beautiful pictures of classic strains. It’s marketed as a go-to guide, but for me, it’s a wonderful book to flip through during a chill smoking session. You’ll learn about the lineage, flavor, and effects produced by 170 marijuana strains. And the photography is exceptional!

For the aspiring weed grower in your life, opt for this book instead. Written by Ed Rosenthal (he’s a big deal), the Marijuana Grower’s Handbook is an all-in-one source for turning a seed into a bountiful harvest.

Storz & Bickel Mighty+

This is the best vaporizer available. It’s reliable, can cook a lot of herb, and produces some of the best vapor from any device. Sure, there are drawbacks — including its large size and $399 price — but it’s worth it.

Storz & Bickel released the original in 2014 and released an updated version in October 2021. The new Mighty+ features quicker heat-up time, USB-C recharging and a ceramic filling chamber that’s much easier to keep clean than the chamber in the original.

A quick tip: The Mighty+ features orange arrow buttons, while the original’s are gray. You want the new one.

Markus Storz started working on a herbal vaporizer in 1996, and in 2002 Jürgen Bickel joined the board, forming Storz & Bickel. The company still sells its original, groundbreaking device, the Volcano, and several less expensive products. The company is based in Germany, where its vaporizers carry medical device certifications. In 2018, Canadian cannabis giant Canopy Growth acquired Storz & Bickel. Jürgen Bickel remains at the company and runs the day-to-day operations.

Want something smaller? The Crafty+ is cheaper and smaller but still packs much of the same power as the Mighty+.

Storage Containers

It’s 2022. Don’t store your bud in a plastic baggie. A proper container will better preserve your green, and you’ve got countless options.

The Libbey BudShield isn’t subtle but features a handsome exterior and an-all glass construction: $35 for 3.

The Staze features a unique design with a smell-proof design and a built-in airtight vacuum sealer: $18.

The Higher Standards Mason Jar is, well, an upgraded mason jar. The 8 oz jar is child-resistant, made in America, and features a Higher Standards-branded koozie made from 100% silicone that wraps the jar: $30.

Jonathan Adler sells trendy house goods; in 2022 few products are more trendy than weed. The houseware company has a line of storage containers that are clearly designed to be displayed, including this lovely porcelain canister with a giant, hand-painted Weed label: $30.

Need to hide your stash? There are countless diversion storage containers on Amazon and Etsy. This Barbasol version is my favorite: $18.99.

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(Fake) Pot Plant

Give a Pot Plant this holiday. But not a real one. These are fake plants designed to be displayed. They come in a variety of sizes and faux strains. The Clone (smallest option) stands 10 inches tall and costs $30. It’s subtle because, like an actual clone, the plastic plant is feigning to be in a state that doesn’t feature any buds yet.

The Teen plant is 16 inches tall and features a couple of small buds. The Adult is 22 inches with a few faux-growing buds on its main cola. The $165, 36-inch tall Mother Pot Plant is a monster fake plant with frosty buds growing throughout the plant.

9 high-tech gift ideas for the cannabis users in your life by Matt Burns originally published on TechCrunch

Twitter founder Jack Dorsey issued a warning on the social network’s state and prospects, saying it meets none of the standards he hoped to achieve and that harassment of its staff is shortsighted and dangerous. It’s time to move on, as he’s said before, and to that end he’s funding new efforts in “open internet development,” starting with $1 million per year to Signal.

Starting in a Twitter thread but quickly transitioning to a blog post (“I don’t want to edit everything into 280 char chunks,” he wrote — shade he probably never anticipated throwing), Dorsey said that his hope to build a Twitter according to his wishes died in 2020 with the entrance of an unnamed activist investor.

“I planned my exit at that moment knowing I was no longer right for the company,” he wrote.

The principles he had hoped to build on — resilience to corporate and government control, user-controlled content with no exceptions and algorithmic moderation — are not present in today’s Twitter, nor in the one he led, he admitted.

Even so, he wrote that, contrary to the insinuations accompanying the so-called Twitter Files, “there was no ill intent or hidden agendas, and everyone acted according to the best information we had at the time.”

The various threads have been very selective in what they show and what they redact, while casting certain staff, particularly former head of Trust and Safety, Yoel Roth, as being power-mad and agenda-driven. Roth reportedly experienced harassment in person serious enough that he had to temporarily leave his home. On the whole there is little new in what has been published beyond a handful of convenient scapegoats for imagined abuse.

Of this Dorsey says:

As for the files, I wish they were released Wikileaks-style, with many more eyes and interpretations to consider. And along with that, commitments of transparency for present and future actions. I’m hopeful all of this will happen. There’s nothing to hide…only a lot to learn from. The current attacks on my former colleagues could be dangerous and doesn’t solve anything. If you want to blame, direct it at me and my actions, or lack thereof.

Be careful what you wish for, Jack.

The conversations themselves, as I wrote last week, do in fact constitute a very interesting look at the difficulty of moderation under unprecedented circumstances. The frank and open discussion of how to interpret a rule or what action they should or shouldn’t take is exactly what one would hope is happening behind the scenes of such a process. Imputations of bias have little or no documentary weight behind them, beyond whatever is lent by a carefully curated presentation openly intended to promote that narrative.

As to actual solutions, Dorsey is of course hard at work (or at least present) at Bluesky, but he calls out Mastodon and Matrix as other worthwhile avenues for development:

There will be many more. One will have a chance at becoming a standard like HTTP or SMTP. This isn’t about a “decentralized Twitter.” This is a focused and urgent push for a foundational core technology standard to make social media a native part of the internet.

Putting his money where his mouth is, he announced that he’ll start by funding Signal (definitely resilient to governments) to the tune of $1 million/year. More grants are forthcoming, he said, and solicited recommendations. And fortunately, since what appeared to be his personal email was inadvertently published by Matt Taibbi in the first Twitter Files thread, everyone should be able to get in touch.

Jack Dorsey warns against attacks on Twitter staff and dedicates $1M a year to Signal by Devin Coldewey originally published on TechCrunch

About 29% of Indonesia’s workforce is in the agriculture sector, but many small farmers face challenges like low access to working capital. Eratani is an end-to-end management system that helps them get financing and supplies, and then helps them sell crops once they are ready. The startup announced today it has raised an oversubscribed $3.8 million seed round led by Singaporean VC firm TNB Aura, with participation from AgFunder, Trihill Capital and B.I.G. Ventures.

Founded in 2021 by Andrew Soeherman, Kevin Laksono and Angles Gani, Eratani is now used by more than 10,000 farmers in Java to manage a total of 8,000 hectares producing 52,000 tons of rice. Its target is to work with more than 50,000 farmers by the end of 2024.

Soeherman’s uncle ran an agricultural supplies business, which gave him a look into the difficulties faced by farmers while he was growing up. He told TechCrunch that most agritech players address farmers’ downstream needs, so Eratani was originally developed to deal with upstream issues, before turning into an end-to-end management platform for farms and goods through the entire production cycle.

Some of the challenges Indonesian farmers face include needing to borrow money in order to purchase agri-input supplies from stores. They pay off those loans after they sell their crops, but interest is about 20% a month, said Soeherman, which means they are caught in a cycle of debt. “In Indonesia, there are 33 million farmers and the majority are aged over 45 years. If nothing changes, within 10 years Indonesia will experience a farmer regeneration crisis.”

Eratani’s management platform is divided into three parts. The first, Agri Financing, gives farmers access to working capital they need for the planting process. Agri Inputs provides agricultural supplies with usage recommendations from its agronomist teams. Finally, Agri Output is a market price system for use during the crop distribution process.

Eratani also collects field data statistics to increase farmers’ productivity. Through the platform, farmers have access to Eratani’s agronomists who can help them with strategies to increase their crop yield.

The startup currently has several collaborations in place with the Indonesian government. This includes a partnership with the Agricultural Ministry of Indonesia and the Indonesian State Logistics Agency to develop the agricultural ecosystem, with the goal of achieving food independence in Indonesia, and another one with the Agricultural Ministry of Indonesia to increase crop yields and farmer income. It is also part of the Ministry of Communications and Informatics’ Startup Studio Indonesia.

Agritech startups are proliferating in Indonesia and some that have been covered by TechCrunch include B2B marketplace AgriAku, agritech platform TaniHub and “sea-to-table” startup Aruna.

Soeherman said Eratani differentiates by creating an ecosystem for the entire agricultural process, but he doesn’t see other players as competition. “In the agritech industry, we believe that the entire community should come together to support and encourage the Indonesian agricultural industry. Despite having over 70+ agritech companies operating within the space, there is still a long way to go as it is estimated only 3% of Indonesia’s farmers have benefitted from these technologies overall.”

In a statement, TNB founding partner Vicknesh R. Pillay said, “The agritech space in Indonesia has reached an inflection point due to its presently fragmented nature. Eratani has brought to the table a farmer-centric approach along with a strong team and existing partnerships in the space, and we are excited to begin this journey with Eratani.”

Eratani supports Indonesia’s farmers through the entire growing process by Catherine Shu originally published on TechCrunch

Defense technology continues to get a lot of attention from investors, and today, one of the bigger startups in the space is announcing more funding. Shield AI — which develops platforms and planes for autonomous flying systems, targeting the U.S. military and its allies as customers — has raised $60 million in funding, money that it will be using to continue developing its technology.

The money is coming in as an additional part of Shield AI’s Series E, and it brings the total round to $225 million. Shield AI announced the previous $165 million tranche in June, which gave the startup a valuation of $2.3 billion. We’ve confirmed with Brandon Tseng, Shield AI’s president, who co-founded the company with his brother, CEO Ryan Tseng, that this extension came in at the same valuation.

This latest $60 million came from a single investor, Hollywood producer Thomas Tull. (Previous investors in the company include Snowpoint Ventures, Riot Ventures, Disruptive, Homebrew, Point72 Ventures, Andreessen Horowitz, Breyer Capital and SVB Capital.) Interestingly, the company actually closed this extra funding a week after the last round was announced.

We’re in a tricky period for fundraising: investors have tightened their purse strings in reaction to tech companies, from the top down, seeing a slowdown in business. Then startups finding it harder to raise money have had to cut costs to extend their runways and demonstrate to their backers that they have business ideas that will grow and be profitable. And even if they do all that, they might still run out of money and have to shut down.

Amidst all that, defense tech has been one of the categories that has stood out, not least because of world events: tensions between nations, terrorism and wars are all being played out on a technological level these days, and that means not only equipping those in combat with better tools, but also potentially using technology to carry out any action in order to reduce casualties.

“Military and government spending is countercyclical,” said Tseng in an interview. “When you talk to a consumer or enterprise business, spending goes down in a recession. But the government is a Steady Eddie. Modernizing the military requires a path and a plan and so it will continue to execute on that.”

All of that is what’s driving business for the best startups in the space, and that in turn is getting investors interested, too.

“Automated defense capabilities will play an increasingly essential role in our defense programs and are critical to our ability to remain competitive,” said Tull in a statement. “Shield AI is a leader in this space, developing some of the most advanced and cutting-edge technology for AI piloting. We are proud to be able to support Shield AI and the work they are doing in defense.”

Shield AI is based out of San Diego, which we previously described as the Silicon Valley of the defense industry: it’s the home port of the U.S. Pacific fleet, and according to stats gathered by the city’s chamber of commerce, outside of Fairfax County, Virginia (where the Pentagon is based), greater San Diego gets more defense spending than any other place in the U.S. Shield is based there, among dozens of other major and smaller defense contractors.

The company already has a number of aircraft as well as its Hivemind autonomous flying software on the market and deployed with customers (e.g., in the F16 plane pictured above) — Shield AI is part of the U.S. Department of Defense Program of Record — and it’s working on a number of other projects, including VTOL autonomous plane software and hardware, and “swarming” capabilities to jam signals or to help their customers communicate when their signals are being jammed.

Indeed, the large size of Shield AI’s round, $225 million, is a sign not just of that demand, but also of the high costs associated with developing for this industry. It comes just 11 days after Anduril, another defense tech startup working on autonomous systems, confirmed that it had raised close to $1.5 billion at a $7 billion valuation.

Shield AI raises another $60M at a $2.3B valuation for its military autonomous flying tech by Ingrid Lunden originally published on TechCrunch

Welcome back to Found, where we get the stories behind the startups.

This week, Cheryl Sew Hoy, the founder of Tiny Health, tells Darrell and Becca about the complex science behind baby gut microbiomes. Sew Hoy talks about why she got interested in the subject, what it was like researching the field and how she turned her findings into Tiny Health’s suite of gut microbiome testing kits. She also talked about why this knowledge is so important and how a baby’s gut microbiome will impact their health for the rest of their life.

Subscribe to Found to hear more stories from founders each week.

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Trusting your gut microbiome with Cheryl Sew Hoy from Tiny Health by Rebecca Szkutak originally published on TechCrunch

Cislunar space is quickly becoming ripe for government and civil use. This is particularly true in light of NASA’s Artemis program, which aims to establish a permanent human presence on the moon in the long-term. But a ton of critical infrastructure will need to be in place before that happens: everything from communication systems to space domain awareness, and more.

That’s where Quantum Space comes in. The startup, headed by former NASA acting administrator Steve Jurczyk, is developing a fleet of platforms that would operate in cislunar space and provide a range of services. Just 10 months after announcing its plans, the company said Tuesday it had closed $15 million in funding from Prime Movers Lab to further develop its core product.

Jurczyk, who announced onstage at TC Sessions: Space last week that the company was in the process of closing this Series A round, said it was challenging transitioning from fundraising as a high-level leader in a government agency to the head of an early-stage startup. He added that the pace of decision-making proved to be another major difference to the two worlds.

“At NASA, we’ve got to have 10 meetings and a counsel and a board and several reviews, and then all the information would come to me and I would ultimately pull the team and make a decision,” he said. “Then we get into meetings at Quantum Space and it’s like, ‘Okay, Steve, we have option A, B and C. Which one do you want to do?’”

“It was freeing and refreshing and also a little scary.”

The company said it would use the new capital to continue the development of QuantumNet — its name for the constellation of platforms, or “Scouts,” that will operate in cislunar space — starting with the launch of the first Scout in October 2024. That mission, which Quantum Space announced this past October, will carry a situational awareness payload from GEOST and payloads from additional customers. Blue Canyon Technologies will provide the spacecraft bus.

That first mission, dubbed QS-1, will launch as a rideshare, but the company is developing an in-space tug called Ranger that it plans to use to carry Scouts to their final destination in orbit. The company plans to put more than 40 Scout vehicles in cislunar space by 2032.

“We started off really focused on what we call the ‘robotic outpost,’ a fairly large spacecraft for robotic capability with rendezvous proximity operations, to do servicing, but then we saw there was a need for more capabilities than that in cislunar space,” Jurczyk said. “So now we have a broader strategy […] and that significantly increased our funding needs and our funding timeline.”

Quantum Space was founded in 2021 by Kam Ghaffarian, who also founded Axiom Space and Intuitive Machines. Prime Movers Lab is also an investor in Axiom.

Quantum said in a statement that it would use the funds to develop integration and test facilities, a mission operations center and to continue development on the company’s customer-facing data platform and software.

Quantum Space picks up speed with $15M in funding for cislunar space vehicles by Aria Alamalhodaei originally published on TechCrunch

Apple has confirmed that an iPhone software update it released two weeks ago fixed a zero-day security vulnerability that it now says was actively exploited.

The update, iOS 16.1.2, landed on November 30 and rolled out to all supported iPhones — including iPhone 8 and later — with unspecified “important security updates.”

In a disclosure to its security updates page on Tuesday, Apple said the update fixed a flaw in WebKit, the browser engine that powers Safari and other apps, which if exploited could allow malicious code to run on the person’s device. The bug is called a zero-day because the vendor is given zero days notice to fix the vulnerability.

Apple said security researchers at Google’s Threat Analysis Group, which investigates nation state-backed spyware, hacking and cyberattacks, discovered and reported the WebKit bug.

WebKit bugs are often exploited when a person visits a malicious domain in their browser (or via the in-app browser). It’s not uncommon for bad actors to find vulnerabilities that target WebKit as a way to break into the device’s operating system and the user’s private data. WebKit bugs can be “chained” to other vulnerabilities to break through multiple layers of a device’s defenses.

Apple said in its Tuesday disclosure that it is aware that the vulnerability was exploited “against versions of iOS released before iOS 15.1,” which was released in October 2021. As such, and for those who have not yet updated to iOS 16, Apple also released iOS and iPadOS 15.7.2 to fix the WebKit vulnerability for users running iPhones 6s and later and some iPad models.

The bug is tracked as CVE-2022-42856, or WebKit 247562. It’s not clear for what reason Apple withheld details of the bug for two weeks. Neither Apple nor Google returned a request for comment.

Apple has since released iOS 16.2, which includes end-to-end encryption for data backed up in iCloud and other new features.

Apple fixes ‘actively exploited’ zero-day affecting most iPhones by Zack Whittaker originally published on TechCrunch

Boom Supersonic is working hard to upend the status quo in commercial flight with its Overture airliner — a supersonic craft that will be propelled by brand-new engines the company just revealed. Building from scratch shows that Boom is doubling down on setting itself apart from the rest of the industry.

Building a new aircraft is hard work, and one tough decision is which parts you want to source off the shelf, customize, or design yourself. Why reinvent the flap system if you can buy one that works perfectly well?

But in the case of Boom, they are attempting to build “an economically and environmentally sustainable supersonic airplane—a combination unattainable with the current constraints of derivative engines and industry norms,” as CEO and founder Blake Scholl put it in a news release. If you want to leapfrog your competition, you can’t ask them to do it themselves, in other words.

The Symphony engine will be designed from scratch by Boom’s partners: Florida Turbine Technologies (a subsidiary of Kratos) will do the engine design proper, GE Additive will consult on manufacturing, and StandardAero is on maintenance duty.

Symphony will be a medium-bypass, twin-spool, turbofan engine sans afterburner, with 35,000 pounds of thrust at takeoff. Its intake and exhaust are designed to thrive under supersonic flight and reduce noise. And it is built specifically for use with Sustainable Aviation Fuel, a cleaner alternative to ordinary jet fuel — albeit one that costs several times more right now.

It’s about this big:

Boom claims that Overture will “operate at net zero carbon,” though considering the aircraft is essentially still on the drawing board, we may as well take that as aspirational rather than factual.

At least they’re realistic about the roadmap: production of the engine is planned to start in 2024, with rollout and testing in 2026 and first flights in 2027, and if all goes as planned the airliner could be certified for operations in 2029.

Boom takes the wraps off its supersonic Symphony engine design by Devin Coldewey originally published on TechCrunch

TikTok is testing a new horizontal full screen mode with select users globally, the company confirmed to TechCrunch. Users who have access to the test feature will see a new “full screen” button appear on square or rectangle videos in their feed. Once you click the button, the video will shift into a horizontal full screen mode that takes advantage of all of the real estate on your phone.

The test feature marks yet another way that TikTok is steadily inching into YouTube’s territory. Earlier this year, TikTok rolled out the ability for users to upload videos up to 10 minutes in length. The move was seen as a way for TikTok to attract the same sort of longer-form video creators that normally post content on YouTube. With the expansion, creators gained more flexibility to film things like cooking demos, beauty tutorials, educational content, comedy sketches and more, without having to worry too much about the video’s length.

Now that TikTok has been supporting long-form content for awhile, it makes sense for the company to enhance the viewing experience for users who are watching these sorts of videos, while also making the creative experience better for creators. Oftentimes creators will add a “turn your phone” message at the start of a video to get users to fully enjoy the content that’s about to play if they recorded a video horizontally. With this feature, creators would no longer have to do that.

Although some people may welcome the test feature and the opportunities that it brings, others may not. TikTok is the app that largely popularized the vertical video scrolling format that other companies were quick to copy, so its users may not exactly be fond of the new full screen mode after being accustomed to the vertical format.

As with any test feature, it’s unknown when or if TikTok plans to release the full screen mode widely to all users. It’s also worth noting that if TikTok does decide to release the feature officially, the final product may look different than the test product.

One way that TikTok could possibly change the feature before an official roll out is by making it more intuitive. You currently have to click the button to switch to full screen mode, but maybe in the future users will just have to turn their phone sideways to watch in full screen, which is something that other apps allow users to do.

The test feature comes at a time when data has shown that kids and teens now spend more time watching TikTok than YouTube. This has been the case since June 2020, when TikTok began to outrank YouTube in terms of the average minutes per day people ages 4 through 18 spent accessing these two competitive video platforms. By enhancing its viewing experience, TikTok is continuing to inch further into YouTube’s territory.

But on the other hand, YouTube is also continuing to rival TikTok with Shorts, its TikTok competitor. In September, YouTube announced major changes to its YouTube Partner Program, allowing creators to earn ad revenue on Shorts. Prior to this, no short-form video platform quite figured out how to share ad revenue, which gives Shorts a leg up on the competition.

TikTok inches further into YouTube’s territory with a new horizontal full screen mode by Aisha Malik originally published on TechCrunch

The U.S. House Financial Services Committee held a hearing Tuesday morning focused on FTX’s collapse, mere hours after the crypto exchange’s former CEO, Sam Bankman-Fried, was arrested in the Bahamas.

Bankman-Fried was originally scheduled to testify at the hearing, an appearance that was scuttled after he was taken into custody by Bahamian authorities in light of charges from the U.S. Securities and Exchange Commission, the Commodity Futures Trading Commission and the Department of Justice’s Southern District of New York.

John J. Ray III, FTX’s CEO of four weeks, sat as the only witness for the hearing as Bankman-Fried reportedly made an appearance in a Bahamian court for his arraignment.

The four-hour hearing covered a lot of ground and left many questions unanswered, but several parts stood out from Ray’s testimony. Below, we’ve collected points that matter. Given that we presume you couldn’t catch the entire session live, crib off of our notes:

There aren’t yet exact numbers detailing the extent to which funds were misused, but it’s in “excess of $7 billion.”
There were 7.6 million accounts on FTX and 2.7 million accounts based in the U.S., but it is unclear how many lost money.
Over $1 billion in crypto assets have been recovered and secured. The new FTX leadership group has also secured “cash” in its bank accounts. But it will take weeks, if not months, to secure all the assets, he added.
Ray confirmed customer funds were deposited directly into Alameda Research, as opposed to FTX accounts.
The operations of FTX group were not segregated from sister company Alameda; they operated as one company. As a result, there’s no distinction, virtually, between the operations of the companies and who controlled those operations.
When discussing Bankman-Fried receiving a $1 billion loan from Alameda, Ray said, “The loans that were given to Mr. Bankman-Fried were not just one loan, there were numerous loans. … There’s no description of the purpose of what the loan was. In one instance he signed as both the issuer of the loan as well as the recipient of the loan. We have no information at this time for what the purpose or use of those funds were. That’s part of our investigation.”
The use of FTX capital at Alameda was not incidental or accidental. “The operation of Alameda really depended on the use of customer funds. That’s the major breakdown here. Funds from FTX.com, which was the exchange for non-U.S. citizens, those funds were used at Alameda to make investments and other disbursements,” Ray said.
Alameda was effectively a customer of FTX.com and Bankman-Fried owned 90% of Alameda, Ray said.
When asked if FTX had significant risk management systems, Ray said, “There were virtually no internal controls and no separateness whatsoever.” Later in the hearing, Ray disclosed that there was no board overseeing FTX, aside from Bankman-Fried. FTX, once valued at $32 billion, didn’t have an accounting or human resources department. It did, however, have a legal department and employees with compliance titles — but no department for them to call home.

FTX’s new CEO, John Ray, details crypto exchange’s downfall in US House testimony by Jacquelyn Melinek originally published on TechCrunch