FTX goes up in flames and impacts the broader crypto industry, causing regulators to respond: Hodler’s Digest, Nov. 6-12

FTX goes up in flames and impacts the broader crypto industry, causing regulators to respond: Hodler’s Digest, Nov. 6-12


Coming each Saturday, Hodler’s Digest will provide help to observe each single vital information story that occurred this week. The finest (and worst) quotes, adoption and regulation highlights, main cash, predictions and way more — per week on Cointelegraph in one hyperlink.

Top Stories This Week

FTX and Binance’s ongoing saga: Everything that’s occurred till now

An earthquake rattled the crypto area this week, its impression felt in quite a few associated tales relating to FTX, Alameda Research and Binance. Although the dangerous information got here rolling in this week, suspicions relating to FTX’s standing seem to have began on Nov. 2. The considerations had to do with numerous FTX Token (FTT) held by Alameda (Sam Bankman-Fried, aka SBF, based Alameda and co-founded FTX). By Nov. 6, Binance had determined it might promote its sizable place in FTT. FTX withdrawal points surfaced on Nov. 7, symptomatic of a financial institution run. Binance expressed curiosity in shopping for FTX however declined the buy, citing considerations on Nov. 9. 

Other developments all through the week included SBF reportedly requesting $8 billion to cowl alternate withdrawals and information of the scenario affecting different huge gamers akin to Sequoia Capital, in addition to associated regulatory headlines. 

Nov. 11 noticed SBF’s resignation in addition to FTX, Alameda and FTX US making use of for Chapter 11 chapter in the United States. About 130 entities underneath FTX Group are submitting for chapter.

Breaking: Bahamas securities regulator freezes FTX property

On Nov. 10, FTX noticed its property frozen and its registration suspended by the Securities Commission of The Bahamas, primarily based on suspicions of mishandled consumer funds. A provisional liquidator was elected by the Bahamian Supreme Court, that means FTX should now receive permission to contact any of its property. FTX is based in the Bahamas, falling underneath its jurisdiction. The scenario relating to FTX consumer withdrawals has been contact and go, with some withdrawals seemingly authorised and funds leaving the alternate. Additionally, FTX negotiated a cope with Tron to enable holders of TRX, BTT, JST, SUN, and HT to swap property from FTX to exterior wallets with out penalty.

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Building group resilience to crises by means of mutual assist and Web3

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Daft Punk meets CryptoPunks as Novo faces up to NFTs

Chainlink Labs provides proof-of-reserve service for embattled exchanges

Given the scenario with FTX, speak has arisen round requiring crypto exchanges to come ahead with proof-of-reserves, which might basically give assurance that exchanges have sufficient property to cowl their liabilities. Chainlink Labs has developed a product that goals to ease that course of for exchanges. Multiple crypto exchanges have come ahead with intent to present some type of proof-of-reserves system (not essentially Chainlink’s product, however some kind of system in common), together with Binance, which has already made headway on a proof-of-reserves system.

White House says ‘prudent regulation of cryptocurrencies‘ is required, hinting at scenario with FTX

This week’s turmoil has pushed United States President Joe Biden’s administration to control the crypto area, with the assist of U.S. regulatory our bodies for enforcement. “The administration […] has consistently maintained that without proper oversight, cryptocurrencies risk harming everyday Americans,” White House Press Secretary Karine Jean-Pierre mentioned throughout a press briefing on Nov. 10. “The most recent news further underscores these concerns and highlights why prudent regulation of cryptocurrencies is indeed needed.”

Post-election roundup: Who had been the pro- and anti-crypto winners and losers from the US Midterms?

The U.S. Midterm elections occurred on Nov. 8. The crypto area had a presence in the elections, spanning a broad variety of stances and positions on trade regulation held by concerned politicians. Among the combine, J.D. Vance, a recognized Bitcoin proprietor, gained an Ohio Senate seat. Tom Emmer and Patrick McHenry, two figures in favor of crypto, additionally retained their positions in Minnesota and North Carolina, respectively. Brad Sherman, who’s much less favorable towards the crypto area, achieved re-election in California, nevertheless.

Winners and Losers

At the finish of the week, Bitcoin (BTC) is at $16,932, Ether (ETH) at $1,274 and XRP at $0.37. The complete market cap is at $859.61 billion, in accordance to CoinMarketCap.

Among the greatest 100 cryptocurrencies, the prime three altcoin gainers of the week are PAX Gold (PAXG) at 5.69%, Gemini Dollar (GUSD) at 0.71% and Dai (DAI) at 0.14%.

The prime three altcoin losers of the week are FTX Token (FTT) at -89.18%, Solana (SOL) at -50.30% and Loopring (LRC) at -38.47%.

For extra data on crypto costs, make sure that to learn Cointelegraph’s market evaluation.

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Most Memorable Quotations

“If the world economy is a circulatory system, it is stagnant. Parts are dying.”

Michel Khazzaka, cryptographer and founding father of Valuechain

“If you look at it closely, fractional NFTs represent the very essence of the Web3 concept.”

Alexei Kulevets, co-founder and CEO of Walken

“I think what people often misunderstand is that Web3 is not an exclusive new internet. Inside Web3 we also find Web2, the same way we found the former World Wide Web within Web2.”

Max Kordek, president of Lisk

“With a global MiCA [Markets in Crypto-Assets regulatory framework], the FTX crash would not have happened.”

Stefan Berger, member of the European Parliament Committee on Economic and Monetary Affairs

“All crypto exchanges should do merkle-tree proof-of-reserves.”

Changpeng “CZ” Zhao, CEO of Binance

“FTX.com was an offshore exchange not regulated by the SEC. The problem is that the SEC failed to create regulatory clarity here in the US, so many American investors (and 95% of trading activity) went offshore. Punishing US companies for this makes no sense.”

Brian Armstrong, CEO of Coinbase

Prediction of the Week 

Bitcoin value backside takes form as ‘old coins’ hit a report 78% of provide

Bitcoin began the week above $21,000, though the asset fell notably after the FTX information broke, dipping beneath $16,000 on Nov. 9, in accordance to Cointelegraph’s BTC value index. BTC subsequently bounced again up to $18,000, however then declined as soon as once more. 

Pseudonymous Decentrader co-founder Filbfilb defined why the FTX scenario is such an enormous trade occasion. His rationalization basically acknowledged that every one was advantageous throughout the most up-to-date crypto trade bull market, however gamers turned overextended. Then the bear market got here alongside and declining costs created holes in firm stability sheets. He defined {that a} wholesome restoration could possibly be a multi-year effort.

FUD of the Week 

Report: Tether freezes $46M of FTX’s USDT, setting new precedent

Stablecoin issuer Tether Limited has seemingly frozen about $46 million value of USDT held in FTX’s Tron blockchain pockets, primarily based on blockchain observations from Whale Alert on Nov. 10. Tether has not beforehand frozen an organization or alternate pockets, solely privately-owned wallets in tandem with regulatory investigations. In feedback to Cointelegraph, a Tether spokesperson didn’t affirm the suspected freeze however famous the agency’s common communication with regulation enforcement.

Bitcoin miner Iris Energy faces $103M default declare from collectors

Bear market casualties continued this week, as information surfaced of renewable power Bitcoin mining operation Iris Energy’s monetary struggles. According to a default discover issued by mining rig producer Bitmain Technologies, the agency reportedly owes $103 million in complete. Multiple components have seemingly contributed to Iris Energy’s declining monetary place, akin to Bitcoin’s depressed value and electrical price hikes. 

BlockFi limits platform exercise, together with a halt on consumer withdrawals

Withdrawals and different options have been paused on BlockFi, with the digital asset lending platform explaining that it’s ready for readability round the FTX ordeal. Additionally, BlockFi famous that prospects ought to chorus from depositing on BlockFi wallets or its curiosity platform. BlockFi and FTX US beforehand struck a deal involving a $400 million line of credit score given to BlockFi.

Best Cointelegraph Features

How to cease your crypto group from imploding

“There were a lot of cypherpunks at those early Bitcoin meetups that I went to.”

Some central banks have dropped out of the digital foreign money race

There are no less than 4 international locations which have both scrapped or halted CBDC plans to date, and every central financial institution has its personal reasoning for not launching one.

Could Bitcoin have launched in the Nineties — Or was it ready for Satoshi?

With the web, elliptic curve cryptography, even Merkle timber and PoW protocols all current, Bitcoin was “technically possible” in 1994.

Editorial Staff

Cointelegraph Magazine writers and reporters contributed to this text.



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