FTX catches fire and affects the broader crypto industry, causing regulators to respond: Hodler’s Digest, November 6-12

Coming every Saturday Hodler’s Digest It will help you keep track of every important news that happened this week. Best (and worst) quotes, top adoption and regulation, leading currencies, forecasts and much more – a week on Cointelegraph in one link.

This week’s top news

The ongoing FTX and Binance saga: everything that has happened so far

An earthquake rocked the crypto space this week, and its impact was felt in several related stories related to FTX, Alameda Research, and Binance. Despite the bad news this week, it seems that doubts about the status of FTX began to kick in on November 2. The concerns were about a large number of FTX Tokens (FTT) held by Alameda (Sam Bankman-Fried, aka SBF, founder of Alameda and co-founder of FTX). By November 6, Binance decided that it would sell its large FTT position. FTX withdrawal issues surfaced on November 7, and they are symptoms defending banks. Binance expressed interest in buying FTX but declined the purchase, citing concerns on November 9.

Other developments throughout the week reportedly included SBF’s $8 billion request to cover exchange withdrawals and news of the situation affecting other big players such as Sequoia Capital, as well as related regulatory headlines.

November 11 saw the resignation of SBF as well as FTX, Alameda, and FTX US filing for Chapter 11 bankruptcy in the United States. About 130 entities under the FTX group have filed for bankruptcy.

BREAKING: Bahamas securities regulator freezes FTX assets

On November 10, FTX saw its assets frozen and its registration suspended by the Bahamas Securities Commission, based on suspicions of mismanagement of client funds. A temporary liquidator has been elected by the Supreme Court of the Bahamas, which means that FTX must now obtain permission to touch any of its assets. FTX is primarily based in the Bahamas, which is under its jurisdiction. The situation regarding the withdrawal of FTX users has been fine, with some withdrawals apparently being approved and funds left from the exchange. Additionally, FTX negotiated a deal with Tron to allow TRX, BTT, JST, SUN, and HT holders to swap assets from FTX to offshore wallets without penalty.

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Chainlink Labs Provides Proof of Reservation Service for Blocked Exchanges

Given the situation with FTX, there has been talk of crypto exchanges being required to provide proof of reserves, which would essentially give a guarantee that the exchanges have enough assets to cover their liabilities. Chainlink Labs has developed a product that aims to facilitate this process for exchanges. Multiple crypto exchanges have come forward with the intent of providing some kind of Proof of Reserves system (not necessarily a Chainlink product, but some kind of system in general), including Binance, which has already made progress with the Proof of Reserves system.

The White House says “prudent regulation of cryptocurrency” is needed, referring to the situation with FTX

The turmoil this week has prompted the administration of US President Joe Biden to monitor the crypto space, with the help of US law enforcement regulators. “Administration […] “Recent news confirms these concerns and highlights why prudent regulation of cryptocurrency really is needed,” White House Press Secretary Karen Jean-Pierre said during a November 10 press conference.

Post-election round: Who are the winners and losers for and against cryptocurrency from the US midterm?

The midterm elections were held in the United States on November 8th. The crypto space had a presence in the elections, extending a large number of positions and positions on the regulation of the industry taken by the participating politicians. Among this mix, JD Vance, a well-known Bitcoin owner, won a seat in the Ohio Senate. Tom Emmer and Patrick McHenry, two cryptocurrency figures, held their positions in Minnesota and North Carolina, respectively. But Brad Sherman, who was less favorable towards the crypto sphere, achieved re-election in California.

Winners and losers

At the end of the week, Bitcoin (BTC) in USD 16,932 ether (ETH) in $1,274 And the XRP in 0.37 USD. Total market value at USD 859.61 billion, according to CoinMarketCap.

Among the top 100 cryptocurrencies, PAX Gold was the top three gainers for this week (PAXG) At 5.69%, Gemini is a dollar sign (GUSD) by 0.71% and dia (DAI) by 0.14%.

The top three losers in altcoins for the week are the FTX token (Foot) By -89.18%, Solana (sol) At -50.30% and at Loopring (LRC) By -38.47%.

For more information on cryptocurrency prices, be sure to read Cointelegraph’s market analysis.

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Most unforgettable quotes

“If the global economy is a circulatory system, it is stagnant. Parts are dying.”

Michele Khazaca, Crypto Scientist and Founder of Valuechain

“If you look at it closely, partial NFTs are at the core of the Web3 concept.”

Alexey Kolevets, co-founder and CEO of Walken

“I think what people often misunderstand is that Web3 is not an exclusive new Internet. Inside Web3, we also find Web2, in the same way that we found the previous World Wide Web within Web2.”

Max Kordik, President of LISC

“With MiCA Global [Markets in Crypto-Assets regulatory framework]The FTX crash wouldn’t have happened.”

Stefan Berger, Member of the European Parliament’s Committee on Economic and Monetary Affairs

“All Cryptocurrency Exchanges Must Prove Merkle Tree Reserves.”

Changpeng “CZ” Zhao, CEO of Binance

“FTX.com was an offshore exchange not regulated by the SEC. The problem is that the SEC failed to create regulatory clarity here in the United States, so many American investors (and 95% of trading activity) went abroad. Penalized American companies on this makes no sense.”

Brian Armstrong, CEO of Coinbase

Predicting the week

Bitcoin Price Bottom Forming as “Old Coins” Reaches a Record 78% Supply

Bitcoin started the week above $21,000, though the asset dropped significantly after the FTX news broke, dropping below $16,000 on November 9, according to Cointelegraph’s BTC Price Index. BTC later rebounded to $18,000, but fell again.

Decentrader co-founder Filbfilb Pseudonymous explained why FTX placement is such a big industry event. His explanation basically stated that all was well during the cryptocurrency industry’s latest bull run, but players became over-extended. Then came the bear market and lower prices created holes in the company’s balance sheets. He explained that healthy recovery can be a multi-year effort.

FUD of the week

Report: Tether freezes $46 million in USDT for FTX, setting new precedent

It appears that stablecoin issuer Tether Limited has frozen about $46 million of USDT held in FTX’s Tron blockchain wallet, based on Whale Alert’s blockchain notes on November 10. with regulatory investigations. In comments to Cointelegraph, a Tether spokesperson did not confirm the suspected freeze but noted the company’s regular communication with law enforcement.

Bitcoin miner Iris Energy faces a $103 million default claim from creditors

The bear market’s losses continued this week, as news emerged of the financial struggles of Iris Energy’s renewable energy bitcoin mining operation. According to a hypothetical notice issued by mining hardware manufacturer Bitmain Technologies, the company reportedly owes a total of $103 million. Several factors seem to have contributed to the deterioration of Iris Energy’s financial position, such as the drop in the price of bitcoin and the rise in electrical costs.

BlockFi limits platform activity, including halting customer withdrawals

Withdrawals and other features have been paused on BlockFi, as the digital asset lending platform says it is waiting for clarity on FTX’s plight. In addition, BlockFi indicated that customers should refrain from depositing to BlockFi wallets or its platform of interest. BlockFi and FTX US previously entered into a deal that included a $400 million line of credit awarded to BlockFi.

Cointelegraph’s Best Features

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Some central banks have withdrawn from the cryptocurrency race

There are at least four countries that have either canceled or discontinued their central bank digital currency plans so far, and each central bank has its own reasons for not launching one.

Could Bitcoin have been launched in the ’90s – or was it waiting for Satoshi?

With the internet, elliptic curve cryptography, even Merkle trees and PoW protocols, Bitcoin was “technically feasible” in 1994.

Editorial Board

Cointelegraph writers and reporters contributed to this article.

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