FTX in trouble?
It took us a couple of months and an Ethereum merge to get out of the pit left by the Terra crash, and the subsequent insolvency of various platforms such as Celsius, Voyager, etc. Now it seems like we’re circling back to where we were in May-June 2022.
This time, it’s Alameda and FTX, that are rumored to be on the brink of insolvency. Sam Bankman-Fried aKa SBF, once admired as the king of crypto seems to be in trouble these days. For a long time, SBF was idolized in the crypto space including Crypto Twitter (CT) and he looked invincible despite the Terra crash and the chaos that followed.
However, some cracks started to appear by the month of August when Alameda CEO Sam Trabucco suddenly resigned. A month later, FTX President Brett Harrison stepped down as well.
Finally, it was the notorious DCCPA bill that changed Sam’s public image (especially on CT) when he seemingly supported the bill when there were clear red flags throughout the bill which could pose significant threats to DeFi. And this shift in sentiment changed the whole public perception of SBF along with two companies he runs – FTX exchange and Alameda trading firm.
The skepticism started to rise when Alameda's balance sheet was leaked last Wednesday when Coindesk’s story revealed that "the net equity in the Alameda business is actually FTX’s own centrally controlled and printed-out-of-thin-air token." That’s when our own CT investigatoors and threadooors started covering the topic, “Is Alameda Research insolvent?”
Subsequently, more rumors started proliferating, and the FUD machine entered full force. Allegations of FTX's insolvency started circulating all over CT. And precisely at that moment, CZ made his move when we saw a massive $584m worth of $FTT transferred to Binance. And soon enough CZ announced his decision "to liquidate any remaining FTT on our books." and confirmed that Binance was exiting its $FTT position.
Not just that, CZ fired shots at Sam, stating that they were selling as a result of "learning from $LUNA". CZ indirectly referenced SBF's lobbying by claiming that he "won't support people who lobby against other industry players behind their backs."
Now here we are. FTX exchange’s native token $FTT has been continuously being dumped with massive FUD all around. Just in the last 24 hours, the token price fell over 17%. The token price fall has shown us another red flag when Caroline Elisson, the CEO of Alameda Research, was forced to issue a response to CZ's sale offering to buy FTT from Binance at a price of $22.
Even though Sam has released a statement on Twitter stating all user assets are safe and FTX is fine, the FUD has made people rush to withdraw their funds from FTX so much that there some people were forced to wait up to 4 hours to process withdrawals.
To conclude, it might just be a massive FUD created by the rivalry between two big exchanges, but it always pays to be cautious and ride on the safe side. Stay safe!
This week in Web3 Wednesday:
- OpenSea launches on-chain tool to enforce NFT royalties
- JPMorgan executes its first DeFi trade on a public blockchain
- Reserve Bank of India kickstarts the pilot launch of India’s ambitious move into the world of blockchain-enabled CBDC
OpenSea launches on-chain tool to enforce NFT royalties
Amidst the tussle between creators and consumers around NFT royalties, the biggest NFT marketplace OpenSea broke the silence and launched an on-chain tool to enforce NFT royalties.
The on-chain tool will blacklist collections from being resold on marketplaces that don’t enforce royalties and will only apply to new collections listed on the platform. Read the complete info on OpenSea’s latest blog post on creator fees.
JPMorgan executes its first DeFi trade on a public blockchain
Multinational banking firm JPMorgan has successfully executed its first-ever cross-border transaction using decentralized finance (DeFi) on a public blockchain.
The trade was facilitated by the Monetary Authority of Singapore’s (MAS) Project Guardian on Nov. 2 — which was established as part of a pilot program to “explore potential decentralized finance (DeFi) applications in wholesale funding markets.”
Reserve Bank of India kickstarts the pilot launch of India’s ambitious move into the world of blockchain-enabled CBDC
India’s apex bank and financial regulator, the Reserve Bank of India, has kickstarted the pilot launch of India’s ambitious move into the world of blockchain-enabled CBDC (Central Bank Digital Currency).
On the very first day of this pilot launch, selected Indian banks traded 2.75 billion rupees ($33.3 million) of bonds using the new form of currency.
The limited roll-out comes a day after Singapore’s monetary authority unveiled trials of a digital version of its local dollar. The central banks of China, the euro area, the Bahamas and others have been experimenting in the field as well.