12 November

CDCROP: Crypto Exchange FTX Grapples With 'Liquidity Crunch' As Binance Deal Fades (Leon Neal/Getty Images)

From Enron to FTX: Wall Street Turnaround Titan John Jay Ray III Takes Reins from FTX CEO Sam Bankman-Fried

“John Jay Ray III, who led disgraced energy titan Enron through rocky bankruptcy proceedings and a slew of settlements in the early-mid 2000s, has taken over as CEO at beleaguered crypto exchange FTX. Samuel Bankman-Fried resigned the same day as the company’s bankruptcy filing, Friday morning.

Ray has garnered a reputation for having something of a Midas touch with troubled companies. Previously, the turnaround titan served as a chief restructuring officer and plan administrator in high-profile bankruptcy cases involving prominent companies Overseas Shipholding Group and Nortel Networks. During his time at Enron, Ray spearheaded efforts to put more than $20 billion back into the hands of bamboozled investors. He also earned a reputation for standing up to Wall Street and its interests.

FTX’s executive shuffle comes as the firm faces mounting legal troubles, including a joint investigation into its mismanagement of users funds led by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

It appears that the crypto industry is having a bit of an ‘Enron’ moment. We believe that similar to post-Enron, individuals and institutions will move capital away from less regulated, less transparent exchanges and towards those which have built heavily compliant, regulated and transparent operations.”

CDCROP: Ether turns deflationary as network usage spikes. (Source: ultrasound.money)

Ether Turns Deflationary as Amount of ETH Burned Spikes Amid FTX-Induced Market Volatility

“Ether’s net supply increase has turned negative for the first time since Merge. The leading smart contract blockchain is now burning more ether than what’s being minted.

The negative inflation rate means ether’s net supply has declined by 5,598 since Ethereum transitioned to a proof-of-stake (PoS) consensus mechanism of verifying transactions from a proof-of-work (PoW) mechanism on Sept. 15. Ether’s supply would have increased by nearly 670,000 had Ethereum continued to use the PoW mechanism.

Ether’s annualized inflation rate crashed from over 3.5% to nearly zero following the Merge. On Wednesday, more than 5,000 ETH was burned, the highest single-day tally since June, according to Etherscan. More than 13,000 ETH have been burned in the past three days alone.”

CDCROP: Unclear Path (David Foti/Unsplash)

Post-FTX, What Happens to Crypto Markets?

“Cryptocurrencies have historically rebounded to new heights following each calamity. What doesn’t wipe out blockchain and other crypto ventures makes them stronger as new fortified iterations of themselves.

The tenets of supply and demand remain in bitcoin and post-Merge ether’s favor. The volume of each is limited and the public, increasingly including institutional investors, remains robust. But price direction among other cryptocurrencies is uncertain, subject to many different factors including protocols’ ability to execute on their strategies and engage the public.

Separately, an improving economy, a more settled socio-political landscape and clearer crypto regulation in some combination would likely buoy markets. A fresh debacle and sudden economic reversal from the current encouraging signs would likely lead to a downturn and renewed doubts about crypto’s future. Bitcoin and ether’s respective $20,000 and $1,300 support levels of a week ago will now likely represent resistance.

The final verdict will depend on the individual’s time horizon. Contagion effects are still working their way through markets, not to mention the looming overhang of government regulation. Bitcoin and ether’s core principles remain unchanged. As such, recent turmoil may represent a unique opportunity for bullish investors, albeit not without additional challenges.”

How Do We Restore Accountability in Congress? A UVA Policy Professor Has Ideas. | UVA Today

US Senators Commit to Advancing Crypto Bill Despite FTX Collapse

“United States senators Debbie Stabenow and John Boozman have doubled down on their commitment to publishing a final version of the Digital Commodities Consumer Protection Act 2022 (DCCPA) in the wake of FTX’s shocking collapse.

The events that have transpired this week reinforce the clear need for greater federal oversight of the digital asset industry.

If the DCCPA passes into law, it would grant the Commodity Futures Trading Commission (CFTC) — one of the two U.S. market regulators — an extension of regulatory powers over the sector. The senators did not disclose additional details as to what stage the DCCPA is at and when the bill will be published for the Senate to review.”

FTX Contagion: Crypto Investment Firm DCG Gives $140M Equity Infusion to Trading Firm Genesis

“Crypto investor Digital Currency Group is giving an equity infusion of $140 million to Genesis Global Trading, a company within its portfolio. Genesis said this week that its derivatives business has about $175 million in locked funds in its FTX trading account.

While the operation of our lending and trading businesses has not been impacted by recent market events, Genesis has taken steps to strengthen its balance sheet with an additional equity infusion of $140M from our parent company, Digital Currency Group.”

MetaMask Launches Bridge Aggregator In Dapp To Easily Move Tokens Across Chains

MetaMask Allows Moving Tokens on Multiple Blockchains with ‘MetaMask Bridges’

“MetaMask users can now bridge across multiple blockchain networks using MetaMask Bridges, which aggregates different blockchain bridges in one place, ConsenSys announced on Nov. 9. MetaMask Bridges supports major blockchains compatible with the Ethereum Virtual Machine (EVM), including Ethereum, Avalanche, BNB Smart Chain and Polygon.

There are a ton of different bridges out there, each supporting various networks and tokens. MetaMask Bridges has curated the bridges that we think are the most decentralized and secure, and out of those will recommend the best one for the user’s specific route.

MetaMask Bridges picks the bridge with the best price by default, but users can also see time estimates and pick the fastest one if they prefer.”

Twitter Registers as Payments Biz as Post-Musk Dogecoin Gains Are Erased

“In a filing with the U.S. Treasury Department Financial Crimes Enforcement Network or FinCEN, Twitter has applied to become a money service business. The application says Twitter plans to conduct money services in the United States and several of its international territories.”

The Disrupt

In Cryptography We Trust