SBF received $1B in personal loans from Alameda: FTX bankruptcy filing
Documentation from FTX’s bankruptcy proceedings revealed mismanagement of the firm on various levels. The former FTX CEO, Sam Bankman-Fried, allegedly received a $1 billion personal loan from one of the company’s silos. The filing also highlighted other issues within FTX’s operations. Regulators, such as the Securities Commission of the Bahamas and the Financial Industry Regulatory Authority in the U.S., are investigating FTX and other crypto-related companies.
Binance creates industry recovery fund to help projects struggling with liquidity
Binance’s CEO Changpeng Zhao announced the establishment of a fund to support struggling crypto companies affected by the decline of FTX. The fund aims to assist strong companies in the crypto industry facing liquidity challenges. Zhao encouraged eligible companies to reach out to Binance Labs and interested investors looking to contribute. However, the fund will not extend support to FTX as specified by Zhao.
NY Fed launches 12-week CBDC pilot program with major banks
The Federal Reserve Bank of New York’s Innovation Center is conducting a 12-week pilot program involving several major banks to test a simulated central bank digital currency (CBDC) system. Banks such as Citigroup, PNC Bank, BNY Mellon, and Wells Fargo will engage in transactions using a distributed ledger for tokenized money settled against simulated central bank reserves.
The FTX contagion: Which companies were affected by the FTX collapse?
The recent collapse of FTX has had ripple effects on the crypto industry, leading to increased regulatory scrutiny and companies having assets trapped with FTX. Over 10 companies, including Galaxy Digital, Sequoia Capital, BlockFi, and Crypto.com, reported negative impacts, with millions of dollars at stake. While the repercussions vary, most affected companies have not suffered devastating losses.
SEC pushes deadline to decide on ARK 21Shares spot Bitcoin ETF to January 2023
The U.S. Securities and Exchange Commission (SEC) has postponed its decision deadline to January 27, 2023, regarding a rule change proposal by ARK 21Shares for a spot Bitcoin exchange-traded fund (ETF). The commission has previously deferred decisions on similar products. Numerous Bitcoin ETF applications have faced rejections from the SEC in the past.
Winners and Losers
As of the latest data, Bitcoin (BTC) is valued at $16,577, Ether (ETH) at $1,205, and XRP at $0.38, with the total market capitalization at $828.34 billion based on CoinMarketCap.
Among the top 100 cryptocurrencies, the notable gainers for the week include Trust Wallet Token (TWT) with a gain of 93.40%, GMX with 20.40%, and Toncoin (TON) with 18.41%. On the other hand, the biggest losers are Casper (CSPR) at -20.66%, Solana (SOL) at -20.25%, and Cronos (CRO) at -18.58%.
For detailed cryptocurrency price analysis, check out Cointelegraph’s market insights.
Most Memorable Quotations
“In systems where there is no self-custody, the custodians accumulate too much power and then they can 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 trustworthy financial information as occurred here.”
John Ray III, new CEO of FTX
“I repeat… EXIT ALL THE MARKETS”
Il Capo Of Crypto, independent cryptocurrency trader and analyst
“Everything would be ~70% fixed right now if I hadn’t [filed for Chapter 11 bankruptcy]. […] But instead I filed, and the people in charge of it are trying to burn it all to the ground out of shame.”
Sam Bankman-Fried, former CEO of FTX
“I’m sure there are multiple players that will probably get impacted […] in the following weeks, you know, small, large — but I would say [FTX] in terms of magnitude will be one of the larger ones before the whole cycle really ends.”
CK Zheng, co-founder of ZX Squared Capital
“To date, efforts by billionaire crypto bros to deter meaningful legislation by flooding Washington with millions of dollars in campaign contributions and lobbying spending have been effective.”
Brad Sherman, United States Congressman
Prediction of the Week
Bitcoin price may still drop 40% after FTX ‘Lehman moment’ — Analysis
Following Bitcoin’s dip below $16,000 and subsequent struggles around $17,000, QCP Capital forecasts a potential drop to $12,000 due to the FTX situation. The firm suggests that crypto assets may continue to underperform until uncertainties dissipate, likely near the beginning of the new year.
FUD of the Week
Crypto.com accidentally sends 320k ETH to Gate.io, recovers funds days after
Speculation grew concerning the financial stability of Crypto.com after an inadvertent transfer of 320,000 ETH to Gate.io. However, the company managed to retrieve the funds shortly after the incident, alleviating concerns among observers.The digital asset exchange accidentally sent 340,000 ETH to Gate.io, causing suspicion among some crypto enthusiasts due to the timing coinciding with exchanges verifying proof-of-reserves after FTX’s collapse. Despite Crypto.com’s assurance of holding user-owned cryptocurrencies in cold storage, the transfer to Gate.io raised eyebrows. CEO Kris Marszalek later clarified that the transfer was a mistake.
Gate.io and Huobi faced criticism for allegedly sharing outdated snapshots of their digital asset reserves, including loaned funds. There were concerns that Gate.io received funds from Crypto.com before publishing its proof-of-reserves. However, Gate.io’s founder revealed that the snapshot was taken before Crypto.com’s accidental transfer. Huobi, on the other hand, has not explained why it transferred ETH to Binance and OKX wallets after releasing its snapshot.
The FTX crisis has had a significant impact, with the failures of various platforms like Terra, Celsius, Voyager, FTX, and BlockFi still affecting the industry. According to Coinbase’s research, the fallout from the FTX collapse may prolong the crypto winter. Investor confidence in digital assets has been damaged, and it may take time to recover, possibly extending the crypto winter until the end of 2023.
In other news, traditional financial institutions are showing interest in digital assets and decentralized finance (DeFi) despite the market chaos. They are exploring the potential of supporting digital assets and utilizing DeFi capabilities amidst current market uncertainties.
