The Massachusetts senator, an outspoken skeptic of crypto, applauded the efforts of FDIC acting chair Martin Gruenberg to separate digital assets from banking.
Don’t’ believe the hype — Bitcoin price rally to $17K reflects improving sentiment
Negative newsflow continues to make headlines but BTC’s recent move above $17,000 suggests investors are finding reasons to be bullish.
Senate Banking Committee chair calls for coordination with Treasury on crypto
The committee chair cited crypto exchange FTX’s “alarming fraud”, liquidity crunch, and bankruptcy as an example of financial risk Treasury and regulators should address.
US lawmaker questions major crypto exchanges on consumer protection amid FTX collapse
Binance, Coinbase, Bitfinex, Gemini, Kraken and KuCoin were targets of one senator’s probe into protections the firms had in place if a failure similar to FTX’s occurred again.
Ukraine-based blockchain firm blasts ‘fake news’ for crypto donation rumors amid FTX collapse
Sergey Vasylchuk, the CEO of Everstake, said individuals behind Russian propaganda used the fall of FTX “to spin yet another tale about money laundering.”
This simple Bitcoin options strategy allows traders to go long with limited downside risk
Bullish on Bitcoin but afraid of futures liquidations? Here is how pro traders use options to cast safer bets.
ECB president reiterates calls for ‘MiCA II’ in response to FTX collapse
In June, Christine Lagarde said a potential MiCA II framework “should regulate the activities of crypto-asset staking and lending, which are definitely increasing.”
US House committee sets Dec. 13 date for FTX hearing
The House event, titled “Investigating the Collapse of FTX,” will follow a similar hearing in the Senate Agriculture Committee scheduled for Dec. 1.
Kraken settles with US Treasury’s OFAC for violating US sanctions
The U.S.-based crypto exchange agreed to pay more than $362,000 as part of a deal “to settle its potential civil liability” related to violating sanctions against Iran.
Block Earner CEO calls for licensing clarity after being sued for crypto products
Block Earner CEO Charlie Karaboga said it was a “disappointing outcome” given it had spent “considerable resources” to adhere to existing guidelines.
US lawmakers ask DOJ hold FTX execs accountable ‘to the fullest extent of the law’
“The fall of FTX was not simply a result of sloppy business and management practices, but rather appears to have been caused by intentional and fraudulent tactics,” said the letter.
Approving a spot crypto ETF is ‘all about political power’ — Perianne Boring
According to the Chamber of Digital Commerce CEO, passing any kind of legislation — including bills on crypto and blockchain — will be “incredibly difficult” in a divided government.
Shiba Inu developer says WEF wants to work with project to ‘help shape’ metaverse global policy
Shytoshi Kusama reported Shiba Inu could work alongside Facebook and Decentraland by working on metaverse global policy at the World Economic Forum.
‘Substantial amount’ of FTX’s assets stolen or missing — Bankruptcy counsel
“We’re not just talking about crypto assets, or cash assets, or physical assets — we’re also talking about information, and information here is an asset,” said James Bromley.
US Senate committee schedules FTX hearing for Dec. 1, CFTC head to testify
The hearing, titled ‘Why Congress Needs to Act: Lessons Learned from the FTX Collapse’, will be one of the first in which U.S. lawmakers explore what happened with the exchange.
NYDIG Analyzed The FTX Collapse And Its Implications. What Did We Learn?
It’s time for NYDIG to chip in. The FTX fiasco is the theme of the month in the crypto world, and the show’s just beginning. The NYDIG research team avoids the temptation to summarize the whole saga and goes straight to the implications of the fall of Sam Bankman-Fried’s empire. “Some signs of contagion have appeared but a full accounting of the damage and regaining of investor confidence will likely take time,” they say understating the harsh reality.
Taking a page from NYDIG’s book, let’s skip the intro and go straight to the conclusions.
Contagion Is Around The Corner
Speaking about “signs of contagion,” NYDIG mentions BlockFi and the Genesis/ Gemini combo. However, there might be much more to come.
“Several other service providers have piqued the curiosity of crypto sleuths as potential next dominoes, but we hesitate to speculate too much without hard evidence. Regardless, industry participants are on edge for even the slightest signs of stress and continue to pull balances off exchanges.”
In the contagion section of the paper, we find a rare mention of a conspiracy theory that’s making the rounds in crypto twitter. Rarely do big players bring this up. Of course, NYDIG ends up doubling down on the thesis about Terra/Luna that they put out in a previous paper titled “On Impossible Things Before Breakfast.”
“There have been accusations that Alameda caused the initial de-peg of UST, and while that may have been the case, uneconomic rates paid by the Anchor Protocol and insecure economic design of LUNA/UST ensured its ultimate destruction, destroying $60B worth of crypto wealth in a few short days.”
In the previous paper, NYDIG printed a great segway to the next section. “DeFi is not decentralized. The Terra ecosystem was not decentralized. Terra initially sourced funding from LUNA token issuance apportioned to Terraform Labs at inception.”
FTT price chart on Bitstamp | Source: FTT/USD on TradingView.com
NYDIG On DeFi Vs. CeFi
Even though they’re clearly not fans of DeFi, NYDIG gives them some credit. “Most DeFi protocols operated as advertised through the volatility this year, minus the ongoing hacks within the ecosystem.” True, but the ongoing hacks are not a minor factor. It’s a billion-dollar problem with no apparent solution available. However, according to NYDIG, this time the problem lies with centralized finance, and those companies “did the rest of the damage” by engaging in these behaviors:
“Poor risk controls, conflicts of interest, excessive leverage, unclear accounting, counterparty risks, and poor management were just some of the factors at play. Furthermore, the use of an equity-like token, FTX Token (FTT), as collateral exacerbated the issue.”
Is More Regulation The Answer?
According to NYDIG, the industry was expecting “improved regulatory clarity for US investors.” However, thanks to the FTX crash and Sam Bankman-Fried’s political lobbying, “the path in DC has grown more complicated. Regulators will now be on their toes and increasingly more likely to use their current authority to enforce existing regulations and possibly issue new ones.”
It is what it is, however one has to take into account that “FTX.com wasn’t even a US entity, which raises the question of how impactful improved US regulations would have been, at least with respect to preventing the specific recent events surrounding FTX.” That’s true, but FTX was in business with several US fully regulated entities. If effective, shouldn’t Silvergate’s AML procedures have detected Sam Bankman-Fried’s shenanigans?
A related question would be, shouldn’t the due diligence of the highly regarded entities that invested in FTX have detected that something was off?
Featured Image by Kaleidico on Unsplash | Charts by TradingView
Aussie treasurer promises crypto regulation next year amid FTX debacle
A spokesperson for Australian Treasurer Jim Chalmers said they are closely monitoring the fallout from FTX’s collapse.
Crypto skeptic Brad Sherman: federal financial regulators ‘sound like Sam Bankman-Fried’
The U.S. lawmaker suggested four financial regulatory heads had done little to address “crypto billionaire bros” using digital assets for the evasion of sanctions and taxes.
FTX collapse was a ‘dumpster fire,’ says US lawmaker announcing investigative hearing
“There is no sugarcoating it: the FTX collapse has been a dumpster fire,” said House Financial Services Committee ranking member Patrick McHenry.
Will SBF face consequences for mismanaging FTX? Don’t count on it
Lawmakers, regulators and even the institutional media don’t seem to have much interest in faulting SBF for using customer money to trade under the table.