FTX and Binance: A Recap of Recent Events
A series of events this week have shaken the crypto community, revolving around FTX, Alameda Research, and Binance. The trouble began to surface on Nov. 2 with concerns about the significant number of FTX Tokens (FTT) held by Alameda, leading to Binance deciding to sell its FTT position by Nov. 6. Issues with FTX withdrawals emerged on Nov. 7 resembling a bank run. Despite expressing interest in acquiring FTX, Binance withdrew from the deal on Nov. 9, citing apprehensions.
Further developments included SBF asking for $8 billion to cover withdrawals on Nov. 7 and impacting others like Sequoia Capital, along with regulatory implications. On Nov. 11, SBF resigned, and FTX, Alameda, and FTX US filed for Chapter 11 bankruptcy in the U.S., with about 130 entities under FTX Group following suit.
Breaking News: Bahamas Freezes FTX Assets
The Securities Commission of The Bahamas froze FTX’s assets and suspended its registration on Nov. 10 due to suspected mishandling of client funds. An interim liquidator was appointed by the Bahamian Supreme Court, requiring FTX to seek permission to access any assets. Despite uncertainties over user withdrawals, agreements were made for specific cryptocurrencies to be transferred from FTX to external wallets without penalties, in collaboration with Tron.
Chainlink Labs Introduces Proof-of-Reserve Services
The turmoil surrounding FTX has brought about discussions on the necessity for exchanges to provide proof-of-reserves to ensure they possess sufficient assets to cover obligations. Chainlink Labs developed a solution to streamline this process for exchanges. Several exchanges, including Binance, expressed intentions to implement proof-of-reserves, either through Chainlink’s product or other systems.
White House Emphasizes Need for Cryptocurrency Regulation
The recent events prompted President Biden’s administration to voice concerns about cryptocurrencies’ lack of oversight, potentially jeopardizing everyday citizens. The administration stressed the importance of prudent regulation to mitigate risks associated with cryptocurrencies, highlighting the current need for regulatory measures.
Post-election Summary: Impact on Crypto Advocates
The U.S. Midterm elections on Nov. 8 had implications for the crypto industry, with various politicians holding differing views on industry regulations. Notable figures such as J.D. Vance, Tom Emmer, and Patrick McHenry emerged victorious, each with distinct stances on cryptocurrencies.
Market Summary
At the end of the week, Bitcoin (BTC) stands at $16,932, Ether (ETH) at $1,274, and XRP at $0.37, with a total market cap of $859.61 billion, as per CoinMarketCap. Notable gainers and losers among the top 100 cryptocurrencies include PAX Gold (PAXG), Gemini Dollar (GUSD), FTX Token (FTT), Solana (SOL), and Loopring (LRC).
Notable Quotes
“If the world economy is a circulatory system, it is stagnant. Parts are dying.”
Michel Khazzaka, cryptographer and founder of Valuechain
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Prediction of the Week
Bitcoin Price Fluctuation Amidst Market Challenges
Following the FTX incident, Bitcoin’s price saw fluctuations from over $21,000 to below $16,000, eventually settling around $18,000. Despite the volatility, the market remains unpredictable.Decentrader co-founder Filbfilb discussed the significance of the FTX situation in the crypto industry. He explained that things were going well during the recent bull market, but when the market turned bearish, companies found themselves in financial trouble due to falling prices. He mentioned that recovering from this situation could take several years.
**FUD of the Week**
Stablecoin issuer Tether Limited reportedly froze around $46 million worth of USDT held in FTX’s Tron blockchain wallet, as detected by Whale Alert on Nov. 10. Tether had not frozen a company or exchange wallet before, typically only freezing privately-owned wallets during regulatory inquiries. Although a Tether representative did not confirm the freeze, they mentioned the company’s ongoing communication with law enforcement.
**Bitcoin miner Iris Energy encounters $103M default claim from creditors**
The renewable energy Bitcoin mining firm Iris Energy faced financial challenges this week, as Bitmain Technologies issued a default notice claiming the company owes $103 million. Factors like Bitcoin’s price decline and rising electricity costs have contributed to Iris Energy’s financial struggles.
**BlockFi restricts platform activities and halts client withdrawals**
BlockFi temporarily paused withdrawals and other services, waiting for more information on the FTX situation. The digital asset lending platform advised customers against depositing funds or using its interest platform. BlockFi had previously received a $400 million credit line from FTX US.
**Best Cointelegraph Features**
**How to prevent your crypto community from collapsing**
Early Bitcoin meetups had many cypherpunks in attendance.
**Some central banks step back from the digital currency competition**
Several countries have either abandoned or paused their plans for central bank digital currencies (CBDCs), each having distinct reasons for not launching one.
**Could Bitcoin have emerged in the 1990s, or was it awaiting Satoshi?**
Given the technologies available in 1994, such as the internet, elliptic curve cryptography, Merkle trees, and PoW protocols, Bitcoin was theoretically feasible.
**Image Credit:** Momentum Ronnarong / Shutterstock
