This month must have been one of the most challenging months in crypto history! We enter right away into the news for this month!
Crypto exchange FTX filed for bankruptcy
Sam Bankman-Fried started his career in 2013 on Wall Street when he was 21 years old. He became wealthy through cryptocurrency arbitrage and decided, with the help of a few of his friends, to establish a trading firm, named Alameda Research. In 2019, Alameda Research turned enough profit, that Bankman launched his own crypto exchange, FTX. In early 2022, FTX was valued at 32 billion US-Dollar and became one of the biggest crypto exchanges in the world. In June 2022, Sam Bankman-Fried signed the pledge letter, a billionaire philanthropist movement. With pledging to give away at least 50% of his own wealth, Sam wrote in his pledge letter:
“A while ago I became convinced that our duty was to do the most we could for the long run aggregate utility of the world.”Sam Bankman-Fried
On the 2nd of November 2022, CoinDesk published an article stating that the trading firm Alameda Research had 14.6 billion assets as of the 30th of June, of which most were FTT tokens issued by FTX. Since Alameda Research and FTX were two separate businesses, the ties between those two were unusually close. Furthermore, accusations were made by the Wall street journal saying, that Alameda Research used 10 million US-Dollar FTX’s customer deposits funds for risky bets.
This has led Changpeng Zhao, CEO of Binance, to sell all crypto tokens linked to FTX. He told this on Twitter publicly to over 7,8 million followers.
Customers started withdrawing billions of dollars from the FTX exchange, which caused withdrawals to halt. Sam Bankman-Fried tried to get a bailout. Binance was considering buying FTX out but then decided to walk away. Binance chose not to buy FTX, because of its “mishandled customer funds and alleged US agency investigations“. Sam Bankman-Fried apologised on Twitter, one day before his company declared bankruptcy.
On the 11th of November 2022, FTX filed for bankruptcy along with other crypto companies Sam Bankman-Fried has founded. Sam Bankman-Fried resigned as CEO on the 11th of November 2022. He is “under supervision” in the Bahamas, where FTX is based.If Bankman is found guilty of fraud, he could face prison time. FTX revealed the insolvency could impact more than 1 million people and businesses. FTX owes money between 1-2 Billion US-dollars in customer funds, according to Reuters. Sam Bankman claimed that FTX held crypto tokens worth over 5 million US-Dollar, but the bankruptcy filing states, that the company only hold crypto assets worth 659,000 US Dollar. John J. Ray III, who guides FTX through its bankruptcy noted, that on the day the bankruptcy was filed, around 372 million US-Dollars of unauthorized crypto transfers were made out of the FTX accounts.
Sam Bankman-Frieds investments
Sam Bankman-Fried was one of the biggest individual donors to Joe Biden in 2020 and contributed almost 40 million US-Dollar to politicians. Sam Bankman-Fried also donated 1 million US-Dollar to Beto O’Rourke’s campaign, which wanted to become Texas governor. Sam lent 250 million US-Dollars to BlockFi and bailed out bankrupt Voyager Digital, with money he didn’t own.
Genesis Global Capital halts customer withdrawals
Genesis Global Capital, the sister company of The Grayscale Bitcoin Trust (GBTC) halts customer withdrawals as a result of the collapse of FTX. Genesis is currently trying to raise liquidity for its lending book, to prevent a declaration of bankruptcy. Grayscale Investments manages GBTC and Genesis. Both are owned by Digital Currency Group (DCG). Concerns have arisen that Grayscale might suffer the most, in case of a catastrophe, but the owner (DCG) stated, that he would prefer to hold onto Grayscale over Genesis since it is the “flagship business” according to Bernstein. Grayscale Bitcoin Trust is the largest bitcoin investment and holds Bitcoins worth over 10 billion Dollars. Genesis Global Capital approached Binance for a cash injection, but Binance rejected the offer due to a potential conflict of interest.
Crypto-related trademark registration
JP Morgan, the largest bank in America has now officially registered a cryptocurrency trademark. It holds the title “JP Morgan Wallet” and will offer Bitcoin exchange services to its customers.
Partnerships & New Deals
Shell Inc- Sponsor of 2023/24 Miami Beach Bitcoin Conferences
Shell, one of the world’s largest oil and gas companies, signed a 2-year partnership with Bitcoin Inc and Bitcoin Magazine. Shell will sponsor the 2023 and 2034 Bitcoin Conferences. At the Bitcoin 2023 Miami event, Shell focusses on the chance of making Bitcoin mining green with the help of their product, which is a immersion cooling fluid. This product was launched last August and aims to help data centres in achieving sustainability and advertise the use of renewable energy.
Shells involvement in web3
Shell is already using web3 and blockchain for sustainability and energy transition. Shell is working on several projects. A venture project between Shell, Accenture and American Express Global Business Travel (Amex GBT), is currently in a pilot phase. The name of this product is Avelia. It is one of the first blockchain-powered books- and -claims systems. It will offer over 1 million gallons of sustainable aviation fuel. Shell claims, it can offer environmental benefits to corporates, such as emissions reduction from business travel.
Google Cloud is a Solana validator
Google Cloud is now running a validator for the Solana blockchain network. Google is planning to bring its Blockchain node Engine to Solanas blockchain in early 2023. The Blockchain Node Engine is Google’s “fully-managed node hosting service”, which already supports the Ethereum blockchain. It enables web3 companies to have their own, dedicated node for transactions, deploying smart contracts and reading reliable and secure blockchain data.
Google Cloud further announced that it is now indexing Solana data as well as adding the data to its BigQuery data warehouse.
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