Bankruptcy Case Details for FTX, Binance’s Crypto Industry Fund and US CBDC Pilot: Hodler’s Digest, November 13-19
Coming every Saturday, Summary of Hodler will help you follow every important news that happened this week. The best (and worst) quotes, adoption and regulation highlights, major coins, predictions and more – a week on Cointelegraph in one link.
Top stories this week
SBF received $1 billion in personal loans from Alameda: FTX bankruptcy filing
Documentation from FTX’s bankruptcy proceedings revealed that the company was mismanaged on several levels. The FTX group would have been made up of several companies classified into four silos. A $1 billion personal loan was reportedly made to former FTX CEO Sam Bankman-Fried from one of these silos. The documentation also revealed many other holes and quirks related to FTX’s function. Several regulators are reportedly looking into FTX, including the Bahamas Securities Commission. The Financial Industry Regulatory Authority, a US self-regulatory organization, has also opened a broader investigation into companies involved in crypto in general, assessing their communications with the retail public.
Binance Creates Industry Recovery Fund to Help Projects Struggling with Liquidity
Binance CEO Changpeng Zhao has unveiled his work on a new fund to help the struggling crypto sector – a sector that has been negatively affected by the fall of FTX. Zhao’s new fund seeks to help by assisting “strong” companies in the crypto industry that are struggling with liquidity, the CEO said in a Nov. 14 tweet. These companies should contact Binance Labs, as well as players looking to add capital to the fund. The fund will not be used to help FTX, however, as Zhao clarified.
How to prepare for the end of the bull run, Part 1: Timing
Storming the ‘last bastion’: Anguish and anger as NFTs claim high culture status
New York Fed launches 12-week CBDC pilot program with major banks
Over the next three months, the Federal Reserve Bank of New York’s Innovation Center will test a central bank digital currency (CBDC) simulation system with the cooperation of several banking giants. Citigroup, PNC Bank, BNY Mellon, Wells Fargo and others will transact simulated token money through a distributed ledger, settled against simulated central bank reserves.
The FTX Contagion: Which Companies Have Been Affected by the FTX Collapse?
The recent fall of FTX has impacted the overall crypto space in several ways – from increased regulatory scrutiny to companies with assets locked up with FTX. More than 10 companies have reported feeling the negative effects of the FTX ordeal, often with millions of dollars at risk. Companies include Galaxy Digital, Sequoia Capital, BlockFi, Crypto.com, and Pantera Capital, among others. At this point, the impacts on affected businesses do not appear to be devastating for the most part, although the details vary.
SEC extends deadline to decide ARK 21Shares Bitcoin ETF spot until January 2023
The wait continues for a decision on ARK’s 21Shares spot Bitcoin exchange-traded fund (ETF) from the United States Securities and Exchange Commission (SEC). The regulator has pushed back its decision deadline to January 27, 2023 on a rule change that would allow the consumer Bitcoin product to be listed. The commission has already delayed its decision twice on this particular product. Many Bitcoin ETFs have faced denials from the SEC in the past.
Winners and losers
At the weekend, Bitcoin (BTC) is at $16,577Ether (ETH) at $1,205 and XRP at $0.38. The total market capitalization is $828.34 billion, according to CoinMarketCap.
Among the 100 largest cryptocurrencies, the top three altcoin gainers of the week are Trust Wallet Token (TWT) at 93.40%, GMX (GMX) at 20.40% and Toncoin (TONNE) at 18.41%.
The top three altcoin losers of the week are Casper (CSPR) at -20.66%, Solana (FLOOR) at -20.25% and Cronos (CRO) at -18.58%.
For more information on crypto prices, be sure to read Cointelegraph’s market analysis.
Despite the bad reputation, NFTs can be a force for good
Here’s how to make – and lose – a fortune with NFTs
Most Memorable Quotes
“In systems where there is no self-guard, guardians accumulate too much power and can then abuse that power.”
Michael Saylor, Executive Chairman of MicroStrategy
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of reliable financial reporting as has happened here.”
John Ray III, new CEO of FTX
“I repeat…EXIT ALL MARKETS”
Il Capo Of Crypto, independent cryptocurrency trader and analyst
“Everything would be about 70% fixed right now if I hadn’t [filed for Chapter 11 bankruptcy]. […] But instead, I filed a case, and the people responsible for it are trying to burn it all down out of shame.
Sam Bankman-Fried, former CEO of FTX
“I’m sure there are several players who are likely to be affected. […] in the following weeks, you know, small, large — but I would say [FTX] in terms of magnitude will be one of the largest before the actual end of the cycle.
CK Zheng, co-founder of ZX Squared Capital
“To date, the efforts of billionaire crypto bros to deter meaningful legislation by flooding Washington with millions of dollars in campaign contributions and lobbying expenditures have been effective.”
Brad Sherman, US Congressman
Prediction of the week
Bitcoin Price Could Fall Another 40% After FTX’s ‘Lehman Moment’ – Analysis
Bitcoin fell below $16,000 at the start of the week. The asset then rallied back to $17,000, only to face rejection around the level several times throughout the week, according to Cointelegraph’s BTC Price Index.
Due to the FTX situation, QCP Capital now expects BTC to fall to $12,000, according to its Elliot Wave Theory chart analysis.
“This underperformance of all crypto assets is here to stay until most of the uncertainty has dissipated – probably only around the start of the new year,” QCP said on Telegram.
FUD of the week
Crypto.com accidentally sends 320k ETH to Gate.io, gets funds back days later
Speculation about the health and solvency of Crypto.com reached a boiling point this week after the digital asset exchange sent 340,000 ETH to Gate.io. The transfer was flagged as suspicious by some members of the crypto community, as it happened around the time exchanges were releasing evidence of reserves following the collapse of FTX. Crypto.com claims that 100% of user-owned cryptocurrencies are kept in cold storage, so transferring to Gate.io was confusing for some crypto sleuths. Crypto.com CEO Kris Marszalek later revealed that the funds were accidentally sent to Gate.io.
Huobi and Gate.io under fire for allegedly sharing snapshots using loaned funds
Speaking of Gate.io, along with crypto exchange Huobi, it has come under fire for allegedly sharing outdated snapshots of its digital asset pools which included loaned funds. Clearly, some investors were suspicious that Gate.io received a top-up from Crypto.com before releasing its proof of reserves. However, Gate.io founder Lin Han revealed that the snapshot in question was taken on October 19, two days before Crypto.com accidentally transferred 240,000 ETH. Huobi, meanwhile, has yet to explain why he transferred 10,000 ETH to Binance and OKX wallets shortly after his snapshot was released.
FTX Crisis Could Extend Crypto Winter Until End of 2023: Report
The 2022 bear market is unlike anything we have ever seen in crypto, with the collective failures of Terra (LUNA), Celsius, Voyager, FTX, and BlockFi still reverberating through the industry. According to new research from Coinbase, the collapse of FTX and its resulting contagion effects could extend the crypto winter for another year. “The unfortunate events surrounding FTX have undoubtedly damaged investor confidence in the digital asset class,” the report said. “The correction will take time, and most likely it could extend the crypto winter for several months, possibly until the end of 2023 in our opinion.”
Best Crypto Features
Blockchain and the world’s growing plastic problem
“People are being asked to make changes to help mitigate climate change, but I can’t pull a CO2 molecule out of the air and show it to you.”
Designing the metaverse: location, location, location
“People imagine it as a second life… in the virtual world, people can have a better virtual house than others.”
Banks still show interest in digital assets and DeFi amid market chaos
Traditional financial institutions continue to demonstrate use cases for supporting digital assets, as well as DeFi capabilities, despite current market conditions.
Blockchain’s most engaging reads. Delivered once a week.