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The truth is often one's best shield (Weekly Crypto Updates)

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Written by   66
1 week ago

Another eventful week, with the market slowly recovering after the FTX earthquake. But more and more issues come to light, and it seems that less than half of their client's deposits may be recovered. There are some initiatives to stabilize the market, most of them led by Binance, which, what a coincidence, is now dominating 65% of the whole market. What else? Read below:

  • Bitcoin: The president of El Salvador, Nayib Bukele, is once more on the news, as he decided to buy Bitcoin on daily basis. They started to buy BTC in September 2021, and they currently hold 2381 BTC at an average buying price of $43K, but this move reduced cross-border remittance costs and boosted the tourism sector in the country.

  • Ethereum: Matter Labs, the company behind Ethereum scaling solution zkSynk, closed a $200M funding round, co-led by Blockchain capital and Dragonfly. Multiple companies in crypto started to use ZK proofs, because of its compression and privacy-preserving features, and ZK is setting up to become an important foundation for the future of blockchain. Starkware launched an STRK token on ETH, but it is not yet tradable.

  • Altcoins: Solana collapsed after the FTX event, as they had some close relationship, and Serum has been forked, as the Serum update key was not controlled by the Serum DAO, but by a private key connected with FTX. The Caribbean nation of St; Kitts and Nevis may declare Bitcoin Cash (BCH) as legal tender by March 2023. Why not BTC, I may ask, but in terms of micro-transactions BCH is much cheaper and faster indeed. Circle unveiled an integration with Apple Pay, letting businesses accept USDC as payment.

  • NFTs and blockchain games: If you were lucky enough to stake their governance token - SPS on Splinterlands, you are now rewarded with a GLX daily airdrop on the Genesis League platform, for a whole year. They also released a new Summoner NFT card - Lux Vega, and you can have it using the promo code from the SplinterFest event, or by paying 500K DEC and 500 Vouchers (around $700). All their tokens are slightly down after Splinterlands announced that they need to lay down 45% of its team. Bored Ape creators, Yuga Labs, acquired NFT startup WENEW. and one of their co-founder, Beeple, will join Yuga Labs as an advisor.

  • Good news: After FTX collapsed, Binance and a few others announced the launch of a fund to help projects currently facing a liquidity crunch. They will help "projects that are otherwise strong, but in a liquidity crisis", they said. Is this CZ's way to stabilize the market? Not only that, but he is thinking to create an association of crypto companies with the largest crypto players, to work with policymakers and regulators across the world. They can talk about it now, as FTX is out of the picture because Binance's market share across the top 10 exchanges is 65%, followed by OKX with 13%. They still have some hard work in the future, as more than $20B were taken out of the exchanges (a 16.8% drop on the balance of assets kept on centralized exchanges). Looks like the Bahamas SEC issued a press release stating that they requested FTX to move its crypto assets to a wallet controlled by them, could be this the move that many perceived as a hack? The documents filed with the federal court database system PACER revealed FTX may have over 1 million creditors. The US federal authorities ordered crypto issuer Paxos to freeze $19M. Seems that FTX owes $3.1B to its 50 largest creditors, and $1.45B to its 10 largest creditors.

  • Bad news: is under siege, after they sent 80% of their total ETH reserves (320k ETH) to a competitor exchange, I am thinking that this may be a way to inflate the daily volumes, and this is only bad because people noticed this time. But we do not know that for sure. The ETH has since returned, but a lot of question marks are raised for now. Their CEO said that new processes and features were implemented to prevent something like this from happening again. Visa terminated its partnership with FTX, so no more FTX-branded Visa debit cards. BlockFi is exploring Chapter 11 bankruptcy, and they met with Binance to discuss possible financial help. They paused withdrawals last Thursday, citing significant exposure to FTX. It has been revealed that Nexo offered Blockfi $850M in July, but they rejected it and went with the $680M from FTX. The Japanese crypto exchange Liquid may be illiquid and halted all withdrawals shortly after its parent company, FTX, filed for bankruptcy. They were acquired by FTX in February 2022. Genesis Trading also paused withdrawals, citing "unprecedented market turmoil". Genesis Trading is part of Digital Currency Group (DCG), which also owns Coindesk, Grayscale Investments, Foundry, and Luno. Grayscale refuses to share proof of reserves over security concerns. Interestingly enough, Temasek, the sovereign wealth fund of Singapore, has written down its investments in FTX and FTX US to zero. Paradigm also wrote down their $290M investment to zero. South Korea, Singapore, and Japan are the most impacted countries by FTX's collapse, with a concentrated 15.7% of the total traffic share. And EU regulators are saying that their upcoming regulations would have protected the clients from such disasters like FTX one. I am not sure, but looking back everyone can be a prophet.

  • Joke of the week: Former CEO of FTX posted some strange one-letter tweets spelled "What HAPPENED"and had some funny interview with the New York Times, where is described as some out-of-luck genius and businessman, not as the thief and con man who it is. This is the same newspaper that was crucifying some good people for being involved in crypto a few years ago. Or maybe he just paid for the article putting him in a good light. Is he feigning insanity, as some speculated? He is very active on Twitter, trying to raise funds, make customers whole and restart. People are not responding well to his ideas. The new FTX CEO, John Ray, commented that Bankman-Fried has no ongoing role at FTX, and does not speak on their behalf. John Ray talked about compromised systems integrity, faulty regulatory oversight abroad, the inappropriate concentration of control by one small and potentially compromised group, and more. There is also the lack of company information retention as SBF often communicated through applications set on auto-delete, and employee claims were approved with emojis by managers over chat. It is not like Alameda Research used this info to buy tokens ahead of FTX listings, right? Well, it seems that is one of the reasons they cover themselves indeed. There are optimistic estimates stating that 40-50% of their deposits may be recovered by their clients.

All the best, George

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