18 Nov 2022

The Friday Focus: Issue 60

The latest on the FTX collapse, industry impact, and other crypto news from the last week.
The Friday Focus SVG
Weekly happenings
The dust is still to settle from the FTX collapse last week. More details on the gross mismanagement at FTX emerge daily, and other companies in the sector feel the ramifications. Let’s take a quick look at the mostly FTX-dominated news in crypto from the last week. Unraveling the FTX collapse
  • Leaked documents from November 10th show FTX held less than $1bn in liquid assets against $9bn in liabilities.
  • On Friday 11th, FTX filed for bankruptcy after unsuccessful pleas for new capital. The bankruptcy declared that FTX had more than 100,000 creditors, but new information shows it might be closer to 1 million.
  • The new FTX boss, tasked with handling the bankruptcy, condemns the management of the crypto exchange during Sam Bankman-Fried's tenure.
  • More shocking insight into the relationship between FTX and Alameda Research emerges. The new CEO reveals that Alameda had ‘Secret Exemption’ from FTX liquidation protocols.
  • Bahamas securities regulator says it ordered FTX crypto transferred to government wallets. Whether it is related to the $400M worth of tokens transferred from FTX wallets last Friday remains to be seen.
The fallout is felt throughout the entire industry
  • Some good can come from all the bad too. Emphasis is now put on centralized exchanges to prove their reserves, a first step in the right direction of accountability.
  • Genesis’ crypto-lending arm halted withdrawals on Wednesday after reportedly failing to get an emergency loan of $1 billion.
  • BlockFi has put most of its platform’s services on pause, including withdrawals.
  • Hedge fund Galois Capital admits half its capital is stuck on FTX, while Jump Crypto says it remains 'well capitalized' following FTX’s downfall.
  • Traditional finance companies will likely suffer from the FTX collapse as well. JPMorgan Chase and Wells Fargo are potentially among the exposed parties.
  • Binance continues to be (or play) the good samaritan, launching a new industry recovery fund.
  • It will take time to understand the regulatory fallout of this mess. But the U.S. House committee is to hold a hearing on the FTX collapse as a first move.
Other crypto news in the past week
  • The EU is looking into banning privacy-enhanced cryptocurrencies
  • An audit of the Luna Foundation Guard’s use of reserves in relation to the UST/Luna collapse has been released. The auditor’s report shows that the full reserve was used to defend the UST peg.
  • Binance is considering relaunching the bid for bankrupt crypto lender Voyager, after its previous savior, FTX, will be of little help going forward.
  • Crypto exchange Bitstamp wins registration in Spain
  • CBDCs are getting closer. Leading banks and the New York Fed are about to start a 12-week digital dollar pilot.
  • Ethereum development firm Matter Labs has raised a whopping $200 million to support the launch of its zkSync V2 rollup network.
  • In more amusing news, Nike is to create its own platform for web3 wearables, and Binance, in partnership with Cristiano Ronaldo, launches a Cristiano Ronaldo NFT collection in time for the World Cup.
And that’s it for this week. Have a great weekend!
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