FTX bankruptcy filing details, Binance’s crypto industry fund and a U.S. CBDC pilot: Hodler’s Digest, Nov. 13-19


Coming every Saturday, Hodler’s Digest will help you track every important news that happened this week. The best (and worst) quotes, adoption and regulatory highlights, top coins, predictions and much more – a week on Cointelegraph in one link.

Top Stories This Week

SBF received $1B in personal loans from Alameda: FTX bankruptcy

Documentation related to FTX’s bankruptcy proceedings revealed that the company was mismanaged on multiple levels. FTX Group was reportedly composed of multiple companies classified into four silos. A $1 billion personal loan was reportedly allocated to former FTX CEO Sam Bankman-Fried from one of these silos. The documentation also revealed many other holes and quirks relating to the functionality of FTX. Several regulators are said to be investigating FTX, including the Bahamas Securities Commission. The Financial Industry Regulatory Authority, a self-regulatory US organization, has also opened a broader investigation into crypto-involved companies in general, assessing their communications with the retail public.

Binance is creating an industry recovery fund to help projects struggling with liquidity

Binance CEO Changpeng Zhao has revealed his work on a new fund to help the struggling crypto sector – a sector that was negatively affected by the fall of FTX. Zhao’s new fund seeks to help by helping “strong” crypto industry companies that have liquidity issues, the CEO said in a Nov. 14 tweet. Such companies should contact Binance Labs, as well as players who want to add capital to the fund. The fund will not go to help FTX, however, as specified by Zhao.

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NY Fed launches 12-week CBDC pilot program with major banks

Over the next three months, the Federal Reserve Bank of New York’s New Center will test a simulated central bank digital currency (CBDC) system with the cooperation of multiple bank currencies. Citigroup, PNC Bank, BNY Mellon, Wells Fargo and others will transact simulated tokenized money through a distributed ledger, settled against simulated central bank reserves.

The FTX contagion: Which companies were affected by the collapse of FTX?

The recent fall of FTX has impacted the overall crypto space in multiple ways – from an increased regulatory watch to companies having assets pegged to FTX. More than 10 companies reported that they felt negative effects from the FTX test, often with millions of dollars at stake. Companies include Galaxy Digital, Sequoia Capital, BlockFi, Crypto.com and Pantera Capital, among others. At this stage, the effects on the affected companies do not appear to be devastating for the most part, although the details vary.

SEC pushes deadline to decide on ARK 21Shares spot Bitcoin ETF to January 2023

The wait continues for a decision on the location of ARK 21Shares Bitcoin exchange-traded fund (ETF) from the US Securities and Exchange Commission (SEC). The regulator has pushed its decision deadline to January 27, 2023 on a rule change that would allow listing of the main Bitcoin product. The commission has delayed its decision twice before on this particular product. Many Bitcoin ETFs have faced denials from the SEC in the past.

Winners and losers

At the end of the week, Bitcoin (BTC) is at $16,577Aether (ETH) at $1,205 and XRP at $0.38. The total market cap is at $828.34 billion, according to to CoinMarketCap.

Among the top 100 cryptocurrencies, the top three altcoin gainers of the week are Trust Wallet Token. (TWT) at 93.40%, GMX (GMX) at 20.40% and Toncoin (TON) at 18.41%.

The top three altcoin losers of the week are Casper (CSPR) at -20.66%, Solana (SOL) at -20.25% and Cronos (CRO) at -18.58%.

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

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Most Memorable Quotes

“In systems where there is no self-policing, the guardians accumulate too much power and then they can abuse that power.”

Michael Saylor, executive chairman of MicroStrategy

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of reliable financial information as here.”

John Ray III, new CEO of FTX


Il Capo Of Crypto, an independent cryptocurrency trader and analyst

“Everything would be 70% fixed now if I wasn’t [filed for Chapter 11 bankruptcy]. […] But instead I filed, and those responsible for it are trying to burn everything to the ground out of shame.”

Sam Bankman-Fried, former CEO of FTX

“I’m sure there are several players who are likely to be affected […] in the next few weeks, you know, small, big – but I would say [FTX] in terms of size will be one of the biggest before the whole cycle is really over.”

CK Zheng, co-founder of ZX Squared Capital

“So far, efforts by billionaire crypto-brothers to block significant legislation by flooding Washington with millions of dollars in campaign contributions and lobbying spending have been effective.”

Brad Sherman, US congressman

Prediction of the Week

Bitcoin price may still fall 40% after FTX ‘Lehman moment’ – Analysis

Bitcoin fell below $16,000 early in the week. The asset later bounced back to $17,000, only to face rejection around the level multiple times throughout the week, according to Cointelegraph’s BTC price index.

Due to the FTX situation, QCP Capital now expects that BTC may fall to $12,000, according to its analysis of the theoretical Elliot Wave chart.

“This underperformance of all crypto assets is here to stay until most of the uncertainty clears up – likely only around the turn of the year,” QCP said on Telegram.

FUD of the Week

Crypto.com accidentally sends 320k ETH to Gate.io, recovers funds days later

Speculation about the health and solvency of Crypto.com reached a boiling point this week after the digital asset exchange sent 340,000 ETH to Gate.io. The transfer was flagged as suspicious by some members of the crypto community because it happened around the time exchanges released proof of reserves after the FTX collapse. Crypto.com claims that 100% of user-owned cryptocurrencies are held in cold storage, so the transfer to Gate.io was confusing to some crypto sleuths. Crypto.com CEO Kris Marszalek later revealed that the funds were sent to Gate.io by accident.

Huobi and Gate.io under fire for allegedly sharing snapshots using borrowed funds

Speaking of Gate.io, it along with crypto exchange Huobi has come under fire for allegedly sharing outdated snapshots of its digital asset reserves, which included borrowed funds. Obviously, some investors suspected that Gate.io had received a refill from Crypto.com before publishing its proof of reserve. However, Gate.io founder Lin Han revealed that the moment in question was taken on October 19, two days before Crypto.com accidentally transferred 240,000 ETH. Huobi, meanwhile, has yet to explain why it transferred 10,000 ETH to Binance and OKX wallets shortly after releasing its snapshot.

FTX crisis could extend crypto winter until the end of 2023: Report

The bear market of 2022 was unlike anything we’ve ever seen in crypto, with the collective failures of Terra (LUNA), Celsius, Voyager, FTX, and BlockFi still reverberating throughout the industry. According to new research from Coinbase, the collapse of FTX and its resulting contagion effects could extend crypto winter for another year. “The unfortunate events surrounding FTX have undoubtedly damaged investor confidence in the digital asset class,” the report read. “The resolution will take time, and very likely this could extend crypto winter by several more months, possibly until the end of 2023 in our view.”

Best Features of Cointelegraph

Blockchain and the world’s growing plastic problem

“People are being asked to make changes to help mitigate climate change, but I can’t pull a CO2 molecule out of the air and show it to you.”

Draw the metaverse: Location, location, location

“People imagine this as a second life… in the virtual world, people can have a better virtual house than others.”

Banks are still showing interest in digital assets and DeFi amid market chaos

Traditional financial institutions continue to show use cases for supporting digital assets, along with DeFi capabilities, despite current market conditions.

Editorial office

Cointelegraph Magazine writers and reporters contributed to this article.



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