Crypto Lender Genesis Had Sought Emergency Loan of $1 Billion (WSJ)
"Cryptocurrency lender Genesis was seeking an emergency loan of $1 billion from investors before it told clients it was suspending redemptions this week, as the shockwaves from FTX’s collapse continue to reverberate through the crypto industry. A confidential fundraising document viewed by The Wall Street Journal states that Genesis needed access to the credit facility by 10 a.m. Monday, citing a “liquidity crunch due to certain illiquid assets on its balance sheet.” The firm didn’t get the money."
Bahamas Securities Regulator Says It Ordered FTX Crypto Transferred to Government Wallets (CoinDesk)
"The Securities Commission of the Bahamas announced Thursday that it ordered the contents of FTX's crypto wallets to be transferred to government-controlled wallets on the previous Saturday. In a press release, the commission said it made the order under existing authorities that allow for it to take action if it needs to protect clients or their funds. "The Securities Commission of The Bahamas ('the Commission'), in the exercise of its powers as regulator acting under the authority of an Order made by the Supreme Court of The Bahamas, took the action of directing the transfer of all digital assets of FTX Digital Markets Ltd. ('FDM') to a digital wallet controlled by the Commission, for safekeeping," the release said. "Urgent interim regulatory action was necessary to protect the interests of clients and creditors of FDM.""
Jump Crypto Says No Plans to Shut Down, Quashing Rumors (The Block)
"Jump Crypto said it's not shutting down. The trading firm, responding with a tweet to social media speculation of its imminent demise, said it wanted to "debunk a few things" because rumors were "flying around." "We believe we’re one of the most well-capitalized and liquid firms in crypto," the tweet said. "We are still actively investing and trading, so if you’re looking for funding, please get in touch.""
Binance Halts Solana-Based USDC and USDT Deposits, in Line With Rivals (The Block)
"Binance suspended deposits of USD Coin (USDC) and tether (USDT) on the Solana blockchain in a blow to the 2 1/2-year-old blockchain. Hours later, the exchange resumed deposits of Solana-based USDT. The announcement from the largest crypto exchange by trading volume comes after rival OKX announced it will delist both USDC and USDT on Solana, as well as cease support for their deposits or withdrawals. The exact delisting time on OKX was noted to be 3 a.m. UTC on Nov. 17."
US Senators Warren, Durbin Probe FTX Collapse (CoinDesk)
"After the spectacular implosion of FTX last week, questions about what brought the once-mighty exchange to its knees are swirling – and lawmakers want answers. Senators Elizabeth Warren (D-Mass.) and Dick Durbin (D-Ill.) sent a letter on Wednesday to both the Bahamas-based exchange’s former CEO, Sam Bankman-Fried, and its current CEO, former Enron clean-up man John Jay Ray III, who replaced Bankman-Fried after FTX and its 130-odd subsidiaries declared bankruptcy on November 11, asking for more information about what precipitated the exchange’s collapse."
Genesis’ Crypto-Lending Unit Is Halting Customer Withdrawals in Wake of FTX Collapse (CoinDesk)
"The lending arm of crypto investment bank Genesis Global Trading is temporarily suspending redemptions and new loan originations in the wake of FTX’s collapse, Interim CEO Derar Islim told customers on a call Wednesday. The unit, known as Genesis Global Capital, serves an institutional client base and had $2.8 billion in total active loans as of the end of the third quarter of 2022, according to the company’s website."
Winklevosses’ Gemini Delays Withdrawals on Lending Program (Bloomberg)
"Gemini Trust Co., the cryptocurrency platform run by Tyler and Cameron Winklevoss, said redemptions by customers for its Earn program are being delayed after its partner in the product, Genesis Global, paused withdrawals on its borrowing platform amid a liquidity crunch. Genesis is one of the main borrowers of Gemini Earn, a product used to generate yields for its customers, according to Gemini Earn’s website. Gemini is working with Genesis to allow users to redeem funds as ‘quickly as possible.” The delay doesn’t impact any other Gemini products and services, the New York-based firm said in a statement."
Binance to Relaunch Bid for Bankrupt Lender Voyager: Source (CoinDesk)
"Binance.US, the American arm of the world’s largest cryptocurrency exchange, is preparing to bid for bankrupt lending platform Voyager Digital, according to a person familiar with the plans. A previous auction, which was completed around the end of last September, saw the now defunct FTX emerging as the “white knight,” winning out against rivals Wave Financial and Binance. At the time, CoinDesk had also reported that Binance's bid for the U.S.-based Voyager had been shut out due to national security concerns."
OKX Exchange Plans $100 Million Market Recovery Fund (The Block)
"OKX, the world's second-largest crypto-only exchange by trading volume, said it would support an industry struggling with the collapse of the rival FTX exchange with a $100 million market recovery fund. The company said in an email to The Block that the fund would provide assistance to projects struggling due to issues such as lack of financing. "Having been in the industry for almost a decade, healthy development for all projects and ecosystems is of utmost importance to OKX," the company said in the statement. "The company will therefore provide resources and integration support to high-quality projects, alongside provision of technical, liquidity, and other necessary support.""
Senate Banking Committee Eyes Hearing on Sam Bankman-Fried’s FTX Collapse (The Block)
"A key Senate committee could hold a hearing to investigate the collapse of crypto exchange FTX. The Senate Banking Committee is “working to schedule a hearing and details are forthcoming,” according to a Democratic committee spokesperson. FTX, once valued at $32 billion, filed for bankruptcy protection last week. The push to schedule a Senate hearing comes after the House Financial Services Committee announced it will hold a hearing on the FTX collapse in December, including into Binance’s role in the sudden meltdown. At the same time, the beleaguered crypto exchange and former CEO Sam Bankman-Fried are under investigation by the Department of Justice, the Securities and Exchange Commission and the Commodities Futures Trading Commission."
New York Fed and Leading Banks Start Regulated Liability Network Pilot (The Block)
"Leading global banks kicked off a 12-week pilot together with the New York Federal Reserve. The project was first reported by The Block. The so-called regulated liability network will serve as a ground for participants to experiment with wholesale digital asset transaction and settlements. The project will only use simulated data, the New York Fed said. "This theoretical [financial market infrastructure] provides a multi-asset, always-on, programmable infrastructure containing digital representations of central bank, commercial bank, and regulated non-bank issuer liabilities, denominated in U.S. dollars," the statement said."
USDC Stablecoin Issuer Circle Says Businesses Can Accept Apple Pay (CoinDesk)
"Merchants who accept payments in Circle's USDC stablecoin can now interact with Apple Pay, Circle said in a blog post. “NFT marketplaces, crypto gaming, crypto exchanges, crypto wallets and cross-border remittance providers can help their business grow by making checkout easy with Apple Pay and Circle,” the company said. The addition will help crypto-native businesses by making it easier to take payments, while not excluding customers that don’t use crypto. In addition, “traditional businesses can also take advantage of this enhancement to shift more retail payments to digital currency,” Circle said."
FTX Founder Sam Bankman-Fried Attempts to Raise Fresh Cash Despite Bankruptcy (WSJ)
"FTX filed for bankruptcy last week, but the cryptocurrency exchange’s founder still thinks that he can raise enough money to make users whole, according to people familiar with the matter. Mr. Bankman-Fried, alongside a few remaining employees, spent the past weekend calling around in search of commitments from investors to plug a shortfall of up to $8 billion in the hopes of repaying FTX’s customers, the people said."
BlockFi Prepares for Potential Bankruptcy as Crypto Contagion Spreads (WSJ)
"Cryptocurrency lender BlockFi Inc. is preparing a potential bankruptcy filing after halting withdrawals of customer deposits and acknowledging it has “significant exposure” to bankrupt exchange FTX, people familiar with the matter said. BlockFi paused withdrawals and limited activity on its platform last week, saying it couldn’t operate business as usual given the uncertainty about FTX. BlockFi is now planning to lay off some of its workers while the troubled firm prepares for a possible chapter 11 itself, people familiar with the matter said."
Ripple and Binance Seek UK Regulatory Licenses, Lawmakers Are Told (The Block)
"Ripple and Binance have asked to be licensed by the Financial Conduct Authority, UK lawmakers were told on Monday. Binance, the world's largest crypto exchange by trading volume, is in talks with regulators at the moment, Binance Vice-President for EMEA government affairs Daniel Trinder told a hearing of the Treasury Select Committee. Ripple plans to apply for a license as the firm develops its business in the country, Head of Policy Susan Friedman said."
World’s Biggest Crypto Fund Hits Record 42% Discount to Value of Bitcoin It Holds (Bloomberg)
"Problems are multiplying for the world’s biggest crypto fund as chaos engulfs the industry in the wake of exchange FTX’s shock bankruptcy filing. The $11.4 billion Grayscale Bitcoin Trust (ticker GBTC) has plunged more than 74% this year, outpacing the cryptocurrency’s 64% decline. That gap has widened dramatically over the past week, dragging the price of GBTC to an unprecedented 42% discount to the value of the Bitcoin it holds, according to Bloomberg data."
Behind the Scenes of Bloomberg’s Crypto Asset Vetting Model (Blockworks)
"The crypto asset class is rapidly evolving. Unfolding regulation and market maturity are pulling institutional investment capital into crypto. And many traditional institutions investigating this space want the same reliability and transparency they have with data and analytics in more traditional asset classes, such as equities or fixed income, to make informed investment decisions."
FTX Hacker Panicked, Still Holds $339M in Ether, Cryptos: Arkham Intelligence (CoinDesk)
"The mysterious looter of bankrupt crypto exchange FTX, who is likely an insider according to a blockchain expert, holds $339 million of digital assets that they drained from the exchange late Friday, according to crypto intelligence platform Arkham Intelligence. Arkham found that the wallets associated with the exploiter hold $215 million in ETH, the native token of the Ethereum blockchain, $48 million in Maker’s stablecoin DAI, $44 million in BNB, the Binance ecosystem’s native token, $4 million in Tether’s USDT stablecoin on the Avalanche blockchain and $3.8 million of MATIC on Polygon’s Matic bridge."
CZ Plans Industry Association to Communicate With Regulators Worldwide (The Block)
"Binance CEO Changpeng "CZ" Zhao said he wants to set up an association of the largest crypto players to help work with policymakers and regulators worldwide. “The association will try to maintain communication with regulators and also maintain best practices in the industry, including proof of reserves, transparency,” Zhao said on a Twitter Spaces event that hosted over 40,000 listeners."
FTX to Reorganize, New CEO Seeks Support From Staff During Company Conference Call (The Block)
"FTX's new CEO John Jay Ray III called on staff to rally together during an all-hands meeting after last week's bankruptcy protection filing, people who were on the call told The Block. "We need your support," Ray told staff, according to those on the call. Former billionaire Sam Bankman-Fried stepped down from the company following a series of events last week that resulted in its insolvency and the revelation of a multi-billion dollar hole in the firm's balance sheet, which Bankman-Fried attributed to managerial missteps and former employees attributed to fraud."
Binance Will Launch a New ‘Industry Recovery Fund’ (The Block)
"Binance will launch a new fund to help prop up crypto projects facing liquidity crunches. Changpeng Zhao, Binance’s CEO, tweeted about the plan early on Nov. 14. “To reduce further cascading negative effects of FTX, Binance is forming an industry recovery fund, to help projects who are otherwise strong, but in a liquidity crisis. More details to come soon,” said Zhao, adding that qualifying projects can contact Binance Labs, the exchange’s venture capital arm."
Crypto.com CEO Dismisses Speculation of Financial Trouble, Says FTX Exposure Is Minimal (CoinDesk)
"Expect a tough crypto winter, but Crypto.com isn’t going anywhere, CEO Kris Marszalek said during a live interview hosted on its YouTube channel. Over the past week, Crypto.com’s CRO token has dropped almost 45% on concerns the Singapore-based exchange will be the next to face a liquidity crisis. The exchange’s daily volume has collapsed from last year's highs of around $4 billion to about $284 million this past October, according to data from Nomics, and withdrawals are on their way back up as users and investors remove their funds from the platform."
Over $400M Worth of Tokens FTX Funds Drained From Company Accounts (The Block)
"Crypto exchange FTX is seeing millions of dollars flow out of its exchange with early reports of some user account balances being completely empty. So far, over $400 million has been transferred to a single wallet address. The wallet has acquired tens of millions of dollars worth of several types of tokens by draining FTX accounts, and began selling tokens that it received from FTX."
FTX Latest: Employees Explore Sale of US Derivatives Exchange (Bloomberg)
"Sam Bankman-Fried’s digital-asset empire filed for Chapter 11 bankruptcy in Delaware. His crypto trading company, Alameda Research, listed at least $10 billion of assets and liabilities each. Cyprus has suspended FTX’s license to operate an investment business in Europe. The crisis could lead to a tightening of US and EU crypto regulations. Wider crypto markets were hit by the fallout, with Bitcoin falling more than 8% at one point. Former Treasury Secretary Lawrence Summers compared the meltdown to that of Enron Corp."
FTX Had Only $900 Million in Liquid Assets Backing $9 Billion in Debt: FT (The Block)
"FTX had only $900 million in liquid assets against $8.9 billion in liabilities on the eve of bankruptcy, the Financial Times reports. Citing investment materials, the report noted that the largest easily sellable assets available to FTX were $470 million of Robinhood shares owned via an outside corporate entity belonging to CEO Sam Bankman-Fried. Despite being formally based outside of the U.S., $5.1 billion of the liabilities FT reported were in U.S. dollar balances."