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What Is a Crypto Exchange Token and How Did It Help Blow up FTX?

What Is a #Crypto Exchange #Token and How Did It Help Blow up FTX? The FTT exchange token played a major role in the fall of the FTX exchange and it's firm Alameda Research. It was the use of FTT to inflate both entities’ balance sheets that raised the doubts for the collapse. FTT may have been core to another aspect of the FTX fraud, serving as notional (but actually worthless) “collateral” for loans of customer funds made by FTX to bail out Alameda. Exchange tokens goal is the opposite of decentralization. They are an incentive to keep using the same centralized exchange. Holders can use them to get discounts on trading fees, rewards. Despite chatter on Twitter, the FTT token did not distribute a share of FTX platform revenue or give holders any governance rights. FTT was tracked as an ERC-20 token on Ethereum. BNB, Binance’s exchange token, is tracked on its branded BNB Chain, a blockchain that began life as an Ethereum fork but has merged with a separate permissioned blockchain. Also Read - Centralized VS Decentralized Crypto Exchanges The value of exchange tokens, by contrast, is implied to rest on a regulatory or legal regime that in many cases doesn’t actually exist. Most if not all exchange tokens are issued by so-called “offshore” exchanges, like FTX and Binance, that are registered in light-touch regulatory havens such as, in FTX’s case. Exchange tokens represent a way for offshore exchanges to raise money without that access. But the handling of the FTT tokens on FTX and Alameda’s balance sheets didn’t track either to standard equity accounting practices. When accounting for its own equity, or handling stock it has bought back from public markets, companies do not add them to their valuation estimate or liquid assets, instead usually tallying them separately as “treasury stock. This basic accounting deception became a time bomb when Bankman-Fried seemingly began using FTT as collateral for loans between FTX and Alameda, as well as other related entities. The centrality of FTT to the worst crypto blowup of all time has pushed crypto leaders to clarify their stance on accounting for exchange tokens and similar in-house assets. Changpeng Zhao, CEO of Binance, took pains last week to clarify that Binance has “never used BNB as collateral.” Read the full article

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Temasek Says Its FTX Investment Is Now Worth Zero

#Temasek Says Its #FTX Investment Is Now Worth Zero. Temasek said that it did eight months of due diligence on FTX in 2021, reviewing its audited financial statements, analyzing regulatory risk, and cyber security threats before buying a 1% stake in the exchange. In a statement, Temasek said that the $210 million investment, which accounted for 1% of FTX International, and $65 million for 1.5% of FTX.US, represents 0.09% of the firm's net portfolio value of $293.5 billion. Our investment in FTX is an investment into cryptocurrencies in misperception. To clarify, we currently have no direct exposure in cryptocurrencies," Temasek said in a statement. Temasek said that the failure of its investment in FTX isn't an indictment against cryptocurrencies and blockchain technology, but rather a poor bet on Bankman-Fried. Also Read - Hong Kong Wants to Be a Crypto Hub Again ���It is apparent from this investment that perhaps our belief in the actions, judgment and leadership of Sam Bankman-Fried, formed from our interactions with him and views expressed in our discussions with others, would appear to have been misplaced,” Temasek said. "While this write down of our investment in FTX will not have significant impact on our overall performance, we treat any investment losses seriously, and there will be learning for us from this." "Separately, we also gathered qualitative feedback on the company and management team based on interviews with people familiar with the company, including employees, industry participants, and other investors," they said. Read the full article

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FTX Agrees to Sell Itself to Binance Amid Liquidity Crunch

#FTX Agrees to Sell Itself to #Binance Amid #Liquidity Crunch. "Things have come full circle, and FTX.com’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for FTX.com (pending DD etc.)," FTX's Sam Bankman-Fried tweeted Tuesday. Binance CEO Changpeng "CZ" Zhao also tweeted to confirm the deal, saying the two exchanges signed a non-binding letter of intent. Balance sheet of FTX's corporate sibling, Alameda Research, was too heavily reliant on illiquid tokens including FTX's own FTT. Both FTX and Alameda were founded and are largely owned by Bankman-Fried. Also Read - Fidelity to Add Ethereum Trading For Institutional Clients Binance CEO Changpeng "CZ" said He planned to sell his holdings of FTX's FTT token. "Liquidating our FTT is just post-exit risk management, learning from LUNA," he tweeted. CZ's decision brought down the price of FTT. Alameda's CEO, Caroline Ellison, then tweeted that she would buy all of Binance's FTT holdings for $22 each in order minimize the impact on prices. The situation became bad as FTX users struggled to withdraw money from FTX. In his tweets announcing the deal with Binance, Bankman-Fried noted that FTX.us and Binance.US are separate companies that are not part of the transaction, and tweeted that “FTX.us’s withdrawals are and have been live, is fully backed 1:1, and operating normally." Investors had withdrew large sum of assets from FTX, withdrawing bitcoin (BTC) over the last 24 hours, bringing the balance from about 20,000 bitcoins to just 1 on Tuesday morning, according to data from Coinglass. Read the full article

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Hong Kong Wants to Be a Crypto Hub Again

#HongKong Wants to Be a #Crypto Hub Again. At the opening of Hong Kong FinTech Week, regulators declared the city’s ambitions to be a virtual asset hub. The government announced that they will be in talks for allowing retail investors to invest on licensed platforms and is open to considering virtual asset futures exchange-traded funds (ETFs). Read the full article

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Google Cloud's Blockchain Node Engine For Web3

#Google Cloud's #Blockchain Node Engine For #Web3. Google is increasing its exposure to digital assets and blockchain with a new solution, Blockchain Node Engine. In an article, it's called “a fully managed node-hosting for web3 development” with which developers can build and deploy new products on various blockchain-based platforms. Read the full article

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Centralized VS Decentralized Crypto Exchanges

Centralized VS Decentralized #Crypto Exchanges. Many people prefer trading rather than just hodling cryptocurrencies in their wallets. For a Crypto newbie, it can be not to easy world of Crypto exchanges. Let's see the key difference between a Centralized (CEX) vs. Decentralized (DEX) cryptocurrency exchanges. Read the full article

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Fidelity to Add Ethereum Trading For Institutional Clients

#Fidelity to Add #Ethereum #Trading For Institutional Clients. Asset manager Fidelity has decided to open Ethereum (ETH) trading from October 28, according to a memo sent out by the company. Fidelity's institutional clients will be to buy, sell, and transfer Ethereum and this could provide a major boost for institutional adoption.  Read the full article

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Against CBDCs and the Politicization of Money

Against #CBDCs and the Politicization of #Money. Tensions broke out between Rep. Rashida Talib (D-Mich.) and JPMorgan Chase CEO Jamie Dimonat a Capitol Hill hearing over whether the U.S. financial sector should continue funding profitable new oil and gas projects. But the question of government involvement in financial decisions won’t go soon. In fact, the stakes are about to increase as political interest in central bank digital currencies (CBDC) rises. Sustainable finance and Environmental, Social, Governance (ESG) investment standards aim to mold corporate decisions towards elite, consensus on issues like environmental policy, proponents already push shareholder votes on their preferred issues and looking for more. A CBDC would go beyond politicization of finance, imposing government orders on financial transactions to the individual level and financial authorities closely monitor and control the money and such control appeals to authoritarians. Also Read - White House Publishes First Framework for Crypto Regulation Meanwhile, the global central banking authority, the Bank for International Settlements, is running its own test of CBDCs’ international compatibility. While there are many forms a CBDC can take, it's likely all CBDC transactions will be monitored by some agency and as always the reason would be given to stop money laundering and terrorism. A government with the power to monitor everyone’s transactions is powerful enough to impose its own restrictions, banning and denying the ability for a company or individual to send or receive funds for unfavorable causes and once governments gain this control, then there is no going back for them. It’s not too late to stop the CBDCs. The Federal Reserve has publicly stated it will not go forward without congressional approval and slow pace of government may cause CBDCs obsolete before they hit the market, but not to underestimate the threat CBDCs to individual sovereignty as that could be the final step toward the politicization of money. Read the full article

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Clixpesa To Use Web3 To Enable Peer To Peer Payments

#Clixpesa To Use #Web3 To Enable Peer To Peer #Payments. This Web3athon vision is to make payments easy in Africa and bring a regional community investment tool, called a Chama to crypto. Derrick Kachisa and Samuel Moyi, full-stack developers from Kericho in Kenya, saw locals didn't have traditional finance information to invest wisely and hence they founded Clixpesa, an app to simplify finance. Read the full article

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STEPN to lay off over 100 staff as players step away

#STEPN to lay off over 100 staff as players step away. There has seen a major drop in the move-to-earn blockchain fitness app STEPN which is based on Solana blockchain, user base and its rewards token has seen a fall due to the #Crypto market conditions. STEPN is said to lay off over 100 of its contract employees due to the ongoing Crypto bear market and as its user base have seen decline from previous highs. Read the full article

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Coinbase gets inprinciple approval for Singapore Crypto License

#Coinbase gets inprinciple approval for #Singapore #Crypto License. Singapore is a key market for the exchange as per the CEO of Coinbase Singapore and they are also working with local industry people regulations improvements. Read the full article

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IMPT Token Has Raised Over $2.1 Million This Week

#IMPTToken Has Raised Over $2.1 Million This Week. IMPT is a new project dedicated to use blockchain technology to reduce carbon footprint in the world. IMPT token has already raised $2.1 million after only five days of the presale of the project's native currency. 1 IMPT equals $0.018 in the first presale phase and the project sold off 109 million tokens. Read the full article

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BNB Chain Halted After Exploit Drained Estimated $100M

#BNBChain Halted After Exploit Drained Estimated $100M. #BNB Chain was halted on on Oct 6 after the blockchain suffered a "potential exploit" that on-chain data suggests could have targeted an estimated 100M in crypto. BNB Chain is a combination of BNB Beacon Chain and BNB Smart Chain (BSC). Read the full article

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Dogecoin Price Predictions Now Bullish

#Dogecoin Price Predictions Now Bullish. Dogecoin price pumped 9% after Elon Musk's Twitter acquisition news is back on. A letter from 'the Musk parties' was sent to Twitter's lawyers. Twitter shares have also pumped on this news, that could mean DOGE price is set to rise higher. The Twitter share price closed up 22% at $52.05 on Oct 4. Elon Musk is ready to acquire Twitter at $54.20 per share for $44 Billion. Twitter Investor Relations has confirmed the deal. Read the full article

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Teneo moved Starry Night Capital's NFTs

#Teneo moved Starry Night Capital's #NFTs. Three Arrows Capital’s liquidator, Teneo moved Starry Night Capital's more than 300 NFTs. Teneo said, with the cooperation of pseudonymous NFT collector VincentVanDough (VVD), they are in possession of certain Starry Night Capital NFTs and rest will be transferred as well.Starry Night Capital is an NFT investment fund that was launched in August 2021 by VVD and 3AC founders Su Zhu and Kyle Davies. For the first time since then, Starry Night’s address saw a transfer of more than 300 NFTs to a new address which is worth 625 ETH. Read the full article

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Ex CEO of Bankrupt Crypto Lender Celsius Withdrew $10M 

Ex CEO of #Bankrupt #Crypto Lender #Celsius Withdrew $10M weeks prior freezing customers accounts. The company filed for chapter 11 bankruptcy protection in mid July 2022 and Mashinsky resigned as CEO on September 27. At the time, Crypto market was in a crash because of collapse of the Terra Luna, where $60 Billion were wiped out that month. Celsius is supposedly will submit details transactions of Mashinsky to the court in coming days as part of a wider financial disclosure by the company. Read the full article

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Bitcoin long term holder profitability shocking stats

#Bitcoin long term holder profitability shocking #stats. BTC traders may have noticed that BTC volatility was considerably down. Not so long, BTC would make high moves where prices would rally by huge difference, making it profitable for long term holders. But now, being a long term BTC holder is not as profitable as earlier.A recent Glassnode analysis showed BTC’s declining long term holder profitability. As per analysis, long term holder profitability was down to levels earlier seen in December 2018. This was the time when market bottomed out during the previous bearish cycle.  Read the full article