Weekly Crypto News Recap - Nov 11, 2022

Binance walks away from FTX deal, citing ‘mishandled customer funds,’ regulatory scrutiny

After Binance announced it had signed a non-binding LOI to acquire FTX,
it announced the following day that it would not pursue its option to purchase FTX after further due diligence and reports that a US agency was investigating the exchange over its handling of customers’ funds. The announcement sent a shockwave through the crypto ecosystem, resulting in one of the worst days of crypto performance in recent years.

FTX reaches out to Kraken for help as it scrambles for $9.4B bailout; Alameda owes exchange $10B

CryptoSlate

After Binance walked away from the FTX takeover deal, the cryptocurrency exchange has turned to Kraken and other parties for a possible bailout. The Wall Street Journal reported that FTX had $16b in customer assets and it improperly lent out $10b of that to affiliated trading firm, Alameda Research. Subsequently on Friday morning, it was revealed that FTX failed to secure a bailout, and the exchange's CEO SBF resigned and the company filed for Chapter 11 bankruptcy. For a further detailing of the daily series of events during the FTX / Alameda bankruptcy saga, see GSR's daily market updates from the 7th to the 11th of November here: https://www.gsr.io/market-commentary/

Bankman-Fried’s Cabal of Roommates in the Bahamas Ran His Crypto Empire – and Dated. Other Employees Have Lots of Questions

CoinDesk

"Shocking" is a word that aptly describes the rapid fall of Sam Bankman-Fried’s cryptocurrency empire. To a surprising degree, it’s a sentiment that pours out from people who worked for him, people who you’d think would’ve had a clue. How can that be? It may have something to do with a luxury penthouse in the Bahamas. That’s where 30-year-old Bankman-Fried is roommates with the inner circle who ran his now-struggling crypto exchange FTX and trading giant Alameda Research.
Many are former co-workers from quantitative trading firm Jane Street, others he met at the Massachusetts Institute of Technology, his alma mater. All 10 are, or used to be, paired up in romantic relationships with each other. That includes Alameda CEO Caroline Ellison, whose firm played a central role in the company's collapse – and who, at times, has dated Bankman-Fried, according to people familiar with the matter.

US Attorney Seizes $3.6 Billion From Silk Road Dark Web Fraud – Second-Largest Crypto Seizure in History

Cryptonews

The US Department of Justice (DOJ) has seized 50,676 BTC worth around $3.36 billion at the time of seizure in its second-largest crypto seizure in history. According to a Monday press release, the billion-dollar seizure is from a man who “unlawfully obtained” the coins from the dark web market Silk Road over a decade ago. The report said James Zhong, who was accused of committing wire fraud in September 2012 when he unlawfully obtained over 50,000 BTC, pled guilty on Friday. The DOJ said they discovered the stolen BTC from Zhong during a search of his house in Gainesville, Georgia, on Nov. 9, 2021. The recovered bitcoin are worth closer to $800m today as prices have decreased sharply since last November.

BITCOIN

Subway accepts Bitcoin, so users can get a sandwich on the Lightning Network
Bitcoin options traders swing bearish as FTX fallout takes hold
Crypto Adoption: Number of Bitcoin ATMs in Canada Jumps 28% in One Year
Over $344 Million Liquidated as Bitcoin, Ethereum Continue to Drop

ETHEREUM

a16z Launches Trustless Access to Ethereum Blockchain Offering 2-Second Synchronization
L2 is crucial to Ethereum decentralization, censorship resistance, says researcher
Ether officially turns deflationary amid intense crypto-market fear
Get Ready for the 'Scourge': Inside Vitalik Buterin’s Updated Ethereum Plans
DeFi Speculators Turn to Ethereum ‘Squeeths’ and Straddles in Crypto 'Crab Market'

ALTCOINS

What You Need to Know About Exchange Tokens After FTX's FTT Meltdown
Solend accrues $6 million in bad debt from a single underwater loan
Solana postpones token unlock amid double-dip fears, developers unaffected
Aptos and Google Cloud unveil partnership, plan for accelerator program
Chainlink Labs offers proof-of-reserve service for embattled exchanges
LayerZero reaches a complete equity buy-out agreement with FTX and Alameda
Tron's DAO to Purchase $1B USDT to 'Safeguard' Against Market Slump
TRX Momentarily Surges 4,000% on FTX After Justin Sun Emerges as Latest 'Would Be' FTX Savior
Helium Network Founder Pledges to Stick With Solana After Bloody Day for SOL
DeFi Exchange Platform dYdX Places Solana in 'Close Only' Mode
Cross-Ecosystem Platform Evmos Partners With Anchorage Digital to Offer Custody and Staking
Solend struggling to liquidate SOL loan due to congestion
Avalanche Foundation unveils $4 million incentive program for trading platform GMX
BitDAO voting on proposal to earn yield from part of its $2.1 billion treasury
Pre-production Solana phone to ship to developers in December
Helium, Building Out Mobile Network, Plans to Give Free Trials to Solana Phone Users
Friktion offers under-collateralized crypto lending for institutional clients
BetDEX to go live on Solana mainnet before World Cup in Qatar: Exclusive
Polkadot (DOT) Developer Addresses SEC, Says DOT Token Has Transformed From Security to Software
Ethereum Co-Founder Makes Big Changes to Roadmap – Here’s What You Need to Know
GALA token exploit ‘not a white hat act:’ Huobi Global
Solana’s co-founder addresses the blockchain’s reliability at Breakpoint
Open Interest in FTT Futures Doubles as Binance Moves to Liquidate FTX Token Holdings

STABLECOINS

Stablecoin liquidity on Curve’s 3pool falls to lowest level since Luna crash
Tether Freezes $47M USDT Stake Held by FTX
82% of Tether reserves held in ‘extremely liquid’ assets, according to attestation
Tether dollar peg sinks 1.7% as FTX-induced turmoil persists
Tether Dominates Curve's 3pool Liquidity With DAI, USDC Accounting for Just 15%
Tron’s stablecoin USDD loses dollar peg on suspected selloff by Alameda Research
Stablecoins fall below Dollar parity as turbulence impacts entire market
BUSD supply dominance grows as USDT’s supply drops 4%
Tether, Circle deny exposure to FTX, Alameda
Stablecoin Issuer Circle Moves USDC Reserves Into Fund Managed by BlackRock
MIM stablecoin slightly loses dollar parity amid fears of partial FTT backing
USDC Issuer Circle to Add Solana Support for Euro Coin in 2023

CRYPTO ECOSYSTEM

Vauld gets creditor protection until January as court blocks longer extension
B2C2 Chief Executive Officer Phillip Gillespie steps down: Exclusive
Embattled crypto lender Hodlnaut held $13 million on FTX before withdrawal freeze
Crypto trading firm GSR will cover client losses from FTX collapse, will no longer trade on Huobi
MetaMask Launches Integrated Bridge Feature
Genesis Trading reveals $175M of funds are locked in FTX
Crypto Lender BlockFi Pauses Withdrawals in Wake of FTX Collapse
StarkWare Launches Nonprofit Foundation to Fuel StarkNet Ecosystem
Crypto Bank Silvergate’s Stock Defended By Analysts Amidst FTX Concerns
Amber Group says no exposure to Alameda or FTT, less than 10% of trading funds stuck
Bricktrade partners with Blocksquare to tokenize real estate
Liquidity Crunch Spreads to Crypto Lending as Institutional Borrowers Max Out Credit Pools
European crypto broker Aplo approved to offer banking solutions: Exclusive
Crypto Financial Firm Galaxy Digital Reveals $76.8M FTX Exposure as CEO Novogratz Hunkers Down
Crypto Custody Firm Copper Inks $500M Insurance Deal With UK Giant Aon
Alameda provides proof it holds 100 million bit tokens after BitDAO query
Zerion prepares to take on MetaMask with in-browser wallet
Argentine unicorn Uala debuts crypto trading as inflation rattles country
Stablecoin Issuer Paxos Plans to Hire at Least 130 in Singapore: Report
Neon Labs plans to support EVM on Solana in early December

NFTS / GAMING / METAVERSE

FTX contagion victim Deepak.eth puts NFT collection up for sale
New tool mirrors Optimism NFTs to Ethereum mainnet for use in verified apps
OpenSea to enforce creator royalties on all collections after community outcry
FTX Blowup Puts Trove of Prized Bored Apes at Risk of Liquidation
Bored Apes founders propose new model for NFT creator royalties
Solana NFT Sales Surge 170% as y00ts Completes Delayed Rollout
Art Gobblers NFT prices tumble as trading volumes dominate on Blur
Wuhan omits NFTs from metaverse plan amid regulatory uncertainty in China
NFT Superstar Beeple Announces Collaboration with Solana – Create Your Own NFT?

MINING

Litecoin Mining Difficulty Is Hitting New Highs, Foundation Says
Hut 8 Q3 losses miss estimates, hashrate jumps 10%
Analysis of Riot Blockchain’s Q3’22 Earnings
Bitcoin Miner Marathon Digital Misses Q3 Revenue Estimates, Lowers Hashrate Outlook for 2022
Bitcoin mining difficulty barely adjusts downward by 0.19% as miner pressure continues
Bitcoin miner Iris Energy faces $103M default claim from creditors
Argentina Tax Officers Find $20m Worth of Crypto Mining Hardware on Livestock Farm
Bitcoin Miner Hive Blockchain Holds $68M of BTC, Has No Debt Costs on Equipment

EXCHANGES

FTX Foundation’s Future Fund team resigns, condemns exchange’s behavior
FTX’s head of institutional sales resigns, says team was ‘completely in the dark’ about insolvency
Crypto Exchange FTX Reopens Bahamian Withdrawals: Nansen
FTX Violated Its Own Terms of Service and Misused User Funds, Lawyers Say
FTX US Derivatives CEO: Funds Are Safe, Business 'Almost Entirely Separate'
Voyager has no assets on FTX, says deal not done
Gate.io Announces It Will Make Its Merkle Tree Proof of Reserves Solution Open Source
Crypto exchange Bitget to increase headcount 25% by year-end despite market conditions
Coinbase Lays Off Over 60 Employees Amid Crypto Market Turmoil
Bankman-Fried sold FTX equity to employees at 50% discount in spring: Sources
After Rattling Confidence in FTX, Binance Still Holds 5% of FTT Supply
FTX.US Announces Crypto Trading ‘May Be Halted’ In Matter of Days
FTX used $4 billion including customer funds to keep Alameda afloat: Reuters
Binance Releases Wallet Addresses of $69B Crypto Reserve
Most of FTX Legal Team Depart as Exchange Collapses
FTX Suspends Customer Signups After Widespread Criticism
Ether, Solana Trade at Premium on FTX – Here Is (Probably) Why
Crypto.com Exchange Suspends Withdrawals on Solana Blockchain as Crypto Prices Crash – Another Exchange in Trouble?
Bankman-Fried tells FTX top priority is fundraising after failed Binance deal
FTX website comes back online with message advising against deposits
FTX tells investors bankruptcy is likely without fresh cash: Bloomberg
OKX, Kucoin say proof of reserves will be ready in a month
Hostaged FTX Funds Sold for Pennies on the Dollar in OTC Trades Among Customers
Crypto Exchange BitMEX To Launch New Native Token BMEX This Friday
Gate.io Proof-of-Reserves Audit Shows User Asset Reserves Exceed 100%
Binance spot volume dominance jumps to 71% amid FTX freeze
Coinbase CEO Says Company Doesn't Have 'Any Material Exposure' to FTX or Alameda
Crypto Exchanges Scramble to Compile 'Proof of Reserves' as FTX Contagion Grips Markets
Binance tops up SAFU fund at $1 billion amid price fluctuations
Billions of dollars in crypto pouring out of exchanges following FTX fiasco
Coinbase Experiences 'Network Connection Issues' Amid Market Turbulence, Kraken Sees 'Connectivity Issues'
SBF Scrambles to Cover Tracks After FTX Blowup
Crypto Exchange Gemini Expands to 5 More European Countries
Crypto Exchange Coinbase Germany Ordered by Regulator to Tackle "Organizational Deficiencies"
Gate.io Introduces Own Crypto-Payment Solution, Gate Pay
FTX stablecoin reserves plunge as community fears bankrun
CZ Cranks Up Pressure on FTX With Massive Token Sale
Crypto Exchange Coinmetro Eyes US, Europe Expansion With $7M Funding Round
‘FTX is fine,’ Bankman-Fried insists as he appeals for Binance to work together

CAPITAL RAISES

Y Combinator backs payment startup Ping in $15 million seed round
Compliance Firm TRM Labs Raises $70M as Crypto Crime Ticks Up
UK Asset Management Giant Abrdn Leads Archax $28.5M Funding Round
Game studio Ncsoft strikes partnership with Mysten Labs, reveals $15 million backing
Ramp, builder of crypto payment rails, raises $70M
Decentralized search startup Sepana raises $10 million
AptosLaunch on course to raise $2 million in token round: Sources
Amber Group reduces valuation, seeks additional $100 million: Bloomberg

INVESTMENT MANAGEMENT

Pantera Capital’s exposure to FTX is from its Blockfolio investment
Mechanism Capital among funds with assets stuck in FTX, exploring legal options
Latin America’s largest bank partners with Galaxy to introduce crypto ETFs
CoinShares Confirms $30.3 Million Exposure to FTX
Grayscale Bitcoin Trust records a 41% discount amid FTX meltdown
Crypto Venture Capital Investment Slowed Further in October: JPMorgan
Yuga Labs, Circle, SkyBridge Among Investments FTX Ventures Made Prior to Liquidity Issues
Cathie Wood’s ARK Loads Up on COIN Despite FTX Crisis
Canada’s third-largest pension fund invested in FTX at $32B valuation
European crypto venture firm LeadBlock Partners hits first close of $150 million fund: Exclusive
Crypto hedge fund Arca shutters TerraUSD-exposed fund
FTX Ventures Bets on Decentralized Social Media with Lens Investment

TRADFI / TECH

Japanese Tradfi Giant Nomura’s Crypto Arm to Launch Coin Trading Platform
Jefferies CEO Expressed Doubts About Sam Bankman-Fried in July
Twitter subsidiary registers with FinCEN as a money services business
Japanese Mobile Firm NTT Plans to Invest $4 Billion in Web3 Technology – Find Out Why
Meta joins big tech layoffs, lets go of 11,000 employees
LG ‘Ready to Make NFT Push’ as it Seeks Blockchain-savvy CTOs
JPMorgan executes first DeFi trade on a public blockchain: Finance Redefined
Google Cloud Just Became a Solana Validator

CBDC

New York Fed collaborates with Singapore MAS to explore CBDCs
The Clearing House stands up for bank rights, opposes CBDC in comments for US Treasury
David Chaum Rolls Out Privacy-Protecting CBDC Technology
Some central banks have dropped out of the digital currency race
Bank of Korea Tested NFT Trading, Remittances With CBDC: Report
Queen Máxima of the Netherlands comes out in support of digital euro
FX spot settlement in 10 seconds: NY Fed releases results of wholesale CBDC research
CBDCs are a declaration of war against the banking system claims economist
CBDCs May Need Global Regulation, EU Commissioner Says

REGULATORY / COUNTRIES

FTX Has European License Suspended by Cyprus Regulator: Report
US Congressman says SEC’s Gensler allegedly had dubious ties to FTX, promises investigation
US senators commit to advancing crypto bill despite FTX collapse
US Justice Department, Regulators Contacted Binance on FTX Talks: Source
SEC Chair Gary Gensler Addresses FTX Implosion, Says Regulations Very Clear but Crypto Industry Non-Compliant
Unclear regulations drove 95% of trading activity offshore: Coinbase CEO
Justice Department joins SEC in FTX probe: WSJ
MiCA proponent cites FTX in advocating for regulation: ‘Crypto assets are not play money’
Current crypto legislation ‘undermines’ the SEC, Gensler says
U.S. Treasury Department Connects Lazarus Group and Tornado Cash to North Korean Nuclear Weapons Programs
New Report: Russian Central Bank Looks to Integrate ‘Digital Assets’ Into its Financial System
U.S. Treasury Sanctions Tornado Cash (Again)
Sen. Lummis points to FTX-Binance as catalyst for her crypto legislation
Dubai Presses for Crypto Companies to Set Up Shop
Singapore state investor Temasek engaging with FTX as a shareholder: Reuters
Paradigm Crypto Policy Council Enlists Paul Ryan Among Other D.C. Vets
SEC victory over LBRY has ramifications for Ripple and wider crypto market
OCC makes its staff available for fintech-related discussions
SEC issues subpoena to influencers promoting HEX, Pulsechain and PulseX

ENVIRONMENTAL, SOCIAL, GOVERNANCE

Adam Neumann’s a16z-backed startup launches carbon-offsetting NFT project
Lebanon Locals are turning to Bitcoin, Tether amidst an economic crisis
Why banking uses at least 56x more energy than Bitcoin

SURVEYS, HACKS, MISC

Polychain-backed DFX Finance hacked for $7.5 million
Bitcoin and ether up as U.S. inflation data below estimates at 7.7% in October
Martin Shkreli reassures Do Kwon about life in prison as they discuss FTX and Binance
SBF tumbles off Bloomberg’s billionaire index after trouble at FTX
Kim Kardashian Looks Set to Win Investor Lawsuit Over EthereumMax: Report
Wintermute CEO tells 3AC co-founder to ‘stay wiped out’ amid ‘redemption’ attempt
Report: GALA token exploit resulted from public leak of private key on GitHub
Meta reportedly plans ‘large-scale layoffs,’ but what of its metaverse division?
Deribit hackers move stolen Ether to Tornado Cash crypto mixer

This material is provided by GSR (the “Firm”) solely for informational purposes, is intended only for sophisticated, institutional investors and does not constitute an offer or commitment, a solicitation of an offer or commitment, or any advice or recommendation, to enter into or conclude any transaction (whether on the terms shown or otherwise), or to provide investment services in any state or country where such an offer or solicitation or provision would be illegal. The Firm is not and does not act as an advisor or fiduciary in providing this material.

This material is not a research report, and not subject to any of the independence and disclosure standards applicable to research reports prepared pursuant to FINRA or CFTC research rules. This material is not independent of the Firm’s proprietary interests, which may conflict with the interests of any counterparty of the Firm. The Firm trades instruments discussed in this material for its own account, may trade contrary to the views expressed in this material, and may have positions in other related instruments.

Information contained herein is based on sources considered to be reliable, but is not guaranteed to be accurate or complete. Any opinions or estimates expressed herein reflect a judgment made by the author(s) as of the date of publication, and are subject to change without notice. Trading and investing in digital assets involves significant risks including price volatility and illiquidity and may not be suitable for all investors. The Firm is not liable whatsoever for any direct or consequential loss arising from the use of this material. Copyright of this material belongs to GSR. Neither this material nor any copy thereof may be taken, reproduced or redistributed, directly or indirectly, without prior written permission of GSR.