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

Coming each Saturday, Hodler’s Digest volition assistance you way each azygous important quality communicative that happened this week. The champion (and worst) quotes, adoption and regularisation highlights, starring coins, predictions and overmuch much — a week connected Cointelegraph successful 1 link.

Top Stories This Week

FTX and Binance’s ongoing saga: Everything that’s happened until now

An earthquake rattled the crypto abstraction this week, its interaction felt successful galore related stories regarding FTX, Alameda Research and Binance. Although the atrocious quality came rolling successful this week, suspicions relating to FTX’s presumption look to person started connected Nov. 2. The concerns had to bash with a ample fig of FTX Token (FTT) held by Alameda (Sam Bankman-Fried, aka SBF, founded Alameda and co-founded FTX). By Nov. 6, Binance had decided it would sell its sizable presumption successful FTT. FTX withdrawal issues surfaced connected Nov. 7, symptomatic of a slope run. Binance expressed involvement successful buying FTX but declined the purchase, citing concerns connected Nov. 9. 

Other developments passim the week included SBF reportedly requesting $8 billion to screen speech withdrawals and quality of the concern affecting different large players such arsenic Sequoia Capital, arsenic good arsenic related regulatory headlines. 

Nov. 11 saw SBF’s resignation arsenic good arsenic FTX, Alameda and FTX US applying for Chapter 11 bankruptcy successful the United States. About 130 entities nether FTX Group are filing for bankruptcy.

Breaking: Bahamas securities regulator freezes FTX assets

On Nov. 10, FTX saw its assets frozen and its registration suspended by the Securities Commission of The Bahamas, based connected suspicions of mishandled lawsuit funds. A provisional liquidator was elected by the Bahamian Supreme Court, meaning FTX indispensable present get support to interaction immoderate of its assets. FTX is chiefly based successful the Bahamas, falling nether its jurisdiction. The concern regarding FTX idiosyncratic withdrawals has been interaction and go, with immoderate withdrawals seemingly approved and funds leaving the exchange. Additionally, FTX negotiated a woody with Tron to let holders of TRX, BTT, JST, SUN, and HT to swap assets from FTX to outer wallets without penalty.

Chainlink Labs offers proof-of-reserve work for embattled exchanges

Given the concern with FTX, speech has arisen astir requiring crypto exchanges to travel guardant with proof-of-reserves, which would fundamentally springiness assurance that exchanges person capable assets to screen their liabilities. Chainlink Labs has developed a merchandise that aims to easiness that process for exchanges. Multiple crypto exchanges person travel guardant with intent to supply immoderate benignant of proof-of-reserves strategy (not needfully Chainlink’s product, but immoderate benignant of strategy successful general), including Binance, which has already made headway connected a proof-of-reserves system.

White House says ‘prudent regularisation of cryptocurrencies‘ is needed, hinting astatine concern with FTX

This week’s turmoil has driven United States President Joe Biden’s medication to support an oculus connected the crypto space, with the assistance of U.S. regulatory bodies for enforcement. “The medication […] has consistently maintained that without due oversight, cryptocurrencies hazard harming mundane Americans,” White House Press Secretary Karine Jean-Pierre said during a property briefing connected Nov. 10. “The astir caller quality further underscores these concerns and highlights wherefore prudent regularisation of cryptocurrencies is so needed.”

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

The U.S. Midterm elections occurred connected Nov. 8. The crypto abstraction had a beingness successful the elections, spanning a wide fig of stances and positions connected manufacture regularisation held by progressive politicians. Among the mix, J.D. Vance, a known Bitcoin owner, won an Ohio Senate seat. Tom Emmer and Patrick McHenry, 2 figures successful favour of crypto, besides retained their positions successful Minnesota and North Carolina, respectively. Brad Sherman, who is little favorable toward the crypto space, achieved re-election successful California, however.

Winners and Losers

At the extremity of the week, Bitcoin (BTC) is astatine $16,932, Ether (ETH) astatine $1,274 and XRP astatine $0.37. The full marketplace headdress is astatine $859.61 billion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the apical 3 altcoin gainers of the week are PAX Gold (PAXG) astatine 5.69%, Gemini Dollar (GUSD) astatine 0.71% and Dai (DAI) astatine 0.14%.

The apical 3 altcoin losers of the week are FTX Token (FTT) astatine -89.18%, Solana (SOL) astatine -50.30% and Loopring (LRC) astatine -38.47%.

For much info connected crypto prices, marque definite to work Cointelegraph’s marketplace analysis.

Most Memorable Quotations

“If the satellite system is simply a circulatory system, it is stagnant. Parts are dying.”

Michel Khazzaka, cryptographer and laminitis of Valuechain

“If you look astatine it closely, fractional NFTs correspond the precise essence of the Web3 concept.”

Alexei Kulevets, co-founder and CEO of Walken

“I deliberation what radical often misunderstand is that Web3 is not an exclusive caller internet. Inside Web3 we besides find Web2, the aforesaid mode we recovered the erstwhile World Wide Web wrong Web2.”

Max Kordek, president of Lisk

“With a planetary MiCA [Markets successful Crypto-Assets regulatory framework], the FTX clang would not person happened.”

Stefan Berger, subordinate of the European Parliament Committee connected Economic and Monetary Affairs

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

Changpeng “CZ” Zhao, CEO of Binance

“FTX.com was an offshore speech not regulated by the SEC. The occupation is that the SEC failed to make regulatory clarity present successful the US, truthful galore American investors (and 95% of trading activity) went offshore. Punishing US companies for this makes nary sense.”

Brian Armstrong, CEO of Coinbase

Prediction of the Week 

Bitcoin terms bottommost takes signifier arsenic ‘old coins’ deed a grounds 78% of supply

Bitcoin started the week supra $21,000, though the plus fell notably aft the FTX quality broke, dipping beneath $16,000 connected Nov. 9, according to Cointelegraph’s BTC terms index. BTC subsequently bounced backmost up to $18,000, but past declined erstwhile again. 

Pseudonymous Decentrader co-founder Filbfilb explained wherefore the FTX concern is specified a large manufacture event. His mentation fundamentally stated that each was good during the astir caller crypto manufacture bull market, but players became overextended. Then the carnivore marketplace came on and declining prices created holes successful institution equilibrium sheets. He explained that a steadfast betterment could beryllium a multi-year effort.

FUD of the Week 

Report: Tether freezes $46M of FTX’s USDT, mounting caller precedent

Stablecoin issuer Tether Limited has seemingly frozen astir $46 cardinal worthy of USDT held successful FTX’s Tron blockchain wallet, based connected blockchain observations from Whale Alert connected Nov. 10. Tether has not antecedently frozen a institution oregon speech wallet, lone privately-owned wallets successful tandem with regulatory investigations. In comments to Cointelegraph, a Tether spokesperson did not corroborate the suspected frost but noted the firm’s regular connection with instrumentality enforcement.

Bitcoin miner Iris Energy faces $103M default assertion from creditors

Bear marketplace casualties continued this week, arsenic quality surfaced of renewable vigor Bitcoin mining cognition Iris Energy’s fiscal struggles. According to a default announcement issued by mining rig shaper Bitmain Technologies, the steadfast reportedly owes $103 cardinal successful total. Multiple factors person seemingly contributed to Iris Energy’s declining fiscal position, specified arsenic Bitcoin’s depressed terms and electrical outgo hikes. 

BlockFi limits level activity, including a halt connected lawsuit withdrawals

Withdrawals and different features person been paused connected BlockFi, with the integer plus lending level explaining that it is waiting for clarity astir the FTX ordeal. Additionally, BlockFi noted that customers should refrain from depositing connected BlockFi wallets oregon its involvement platform. BlockFi and FTX US antecedently struck a woody involving a $400 cardinal enactment of recognition fixed to BlockFi.

Best Cointelegraph Features

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“There were a batch of cypherpunks astatine those aboriginal Bitcoin meetups that I went to.”

Some cardinal banks person dropped retired of the integer currency race

There are astatine slightest 4 countries that person either scrapped oregon halted CBDC plans truthful far, and each cardinal slope has its ain reasoning for not launching one.

Could Bitcoin person launched successful the 1990s — Or was it waiting for Satoshi?

With the internet, elliptic curve cryptography, adjacent Merkle trees and PoW protocols each present, Bitcoin was “technically possible” successful 1994.