Crypto News Headlines (09-Nov-2022)

Circle and Tether, the firms behind stablecoins USDC and USDT respectively, distanced themselves from crypto exchange FTX and trading firm Alameda Research, as the crypto market grapples with the fallout from FTX’s fall from grace.

Circle CEO Jeremy Allaire took to Twitter to explain the firm’s relation with the two companies. Allaire said Circle has never given loans to FTX or Alameda and has never received FTT as collateral. Allaire added that both Circle and FTX hold only a small portion of equity in each other.

Paolo Ardoino, chief technology officer of Tether, was even more direct.

“To be clear: #Tether does not have any exposure to FTX or Alameda. 0. Null,” he tweeted.

During the last few days, the speculation surrounding FTX led to Binance’s CEO Changpeng Zhao (CZ) telling the public his company plans to acquire FTX. More reports followed the acquisition announcement, as one account said FTX was actively “canvassing deep pockets in Silicon Valley and Wall St” on Tuesday morning.

Another report noted that FTX CEO Sam Bankman-Fried reportedly told staff members that withdrawals on the exchange were “effectively paused.” All of this led to significant crypto market fluctuations throughout the day on Tuesday, and both Kraken and Coinbase reported connectivity problems and “latency delays” during the day.

The price of publicly traded exchange Robinhood stock is down 20%, to around $9.74, on news that Binance will acquire Sam Bankman-Fried’s FTX, which took a 7.6% stake in the popular trading platform in May.

Robinhood opened the day trading at $11.72 before news of the FTX buyout became known.

According to an SEC filing, FTX bought just over 56 million shares of Robinhood, leading some to believe that Bankman-Fried intended to buy Robinhood outright, a claim he denied. Despite this, the price of HOOD jumped 14% on the news of the potential acquisition, to $9.12.

On November 9, Changpeng Zhao, tweeted: “In response to recent price movements, Binance has once again loaded the SAFU insurance fund equivalent to $1 billion in crypto, where $700 million is in BUSD and BNB, $300 million in BTC.” Changpeng Zhao also attached the address on the corresponding chain.

To adjust to recent price fluctuations, #Binance has topped up the #SAFU insurance fund to $1 billion USD equivalent again.BUSD AND BNB address about 700m: address 300m: 1/2

— CZ Binance (@cz_binance) November 9, 2022

The Secure Asset Fund for Users (SAFU) is an emergency insurance fund that was established by Binance in July 2018 to protect users’ funds. When the fund was established, this company committed a percentage of trading fees in order to grow it to a sizable level to safeguard users.

The Federal Financial Supervisory Authority of Germany, also known as BaFin, has issued an order related to the business organization of Coinbase’s local arm in accordance with the country’s banking laws.

In a Nov. 8 notice, BaFin said it had issued the order to Coinbase Germany GmbH for violations of “proper business organization” under the German Banking Act. According to a copy of the legislation made available by the United States Commodity Futures Trading Commission, Coinbase’s Germany arm should have “suitable arrangements for managing, monitoring and controlling risks and appropriate arrangements by means of which the institution’s financial situation can be gauged with sufficient accuracy at all times” and provide certificates of audit related to appropriate reports on its annual accounts.

Total crypto market capitalization slid to $900 billion from over $1 trillion on Wednesday morning as traders reacted to speculations around prominent exchange FTX’s liquidity issues. Over $700 million in long, or bets for higher prices, were liquidated in the past 24 hours as traders were caught on the wrong footing.

Bitcoin (BTC) and ether (ETH) declined more than 8% in the past 24 hours to reach levels previously seen in early October, putting a gradual recovery on hold. Other crypto majors like XRP, dogecoin (DOGE) and cardano (ADA) slipped over 12%, while solana (SOL) – of which Sam Bankman-Fried is a prominent backer – dropped 25%.

Futures tracking bitcoin and ether saw a cumulative $390 million loss due to liquidations, while SOL futures saw $40 million liquidated. FTT futures had a relatively lesser $27 million in liquidations – implying the steep drop was mostly driven by sales of spot tokens.

U.S. District Judge Michael Fitzgerald gave his “tentative view” Monday in a class-action lawsuit filed in January against Kim Kardashian and Floyd Mayweather Jr. over their promotion of the Ethereummax token, Bloomberg reported Tuesday. Former NBA star Paul Pierce is also a defendant in the proposed class-action suit.

The lawsuit alleges that the reality television star and ex-boxing champion scammed investors by hyping the Ethereummax token, causing investors to have to buy EMAX at “inflated prices.” The plaintiffs detailed that the token’s price surged 1,370% soon after its launch in May last year but then hit an all-time low in July — “a 98% drop from which it has not been able to recover.”

Ark Invest, the investment firm run by long-time Bitcoin bull Cathie Wood, purchased 420,949 shares of Coinbase (COIN) worth little under $21.4 million, according to the firm’s daily trade brief.

The largest part of the total amount of purchased shares—roughly 330,00—went towards ARKK, the company’s flagship exchange-traded fund (ETF) that invests in companies targeting disruptive innovation.

An additional 54,466 Coinbase shares were added to Ark Next Generation Internet ETF (ARKW), with another 36,022 COIN reserved for ARK Fintech Innovation ETF (ARKF), according to publicly disclosed data.

COIN was trading at $50.83 at Tuesday’s close, down 10.78% over the day. Shares in Coinbase are down almost 80% since the start of the year, underperforming Bitcoin (BTC), which is down about 74% over the span.

Dubai is heavily recruiting crypto companies to establish themselves there, but the Middle Eastern nation isn’t quite ready for them. Regulations aren’t clear yet, and getting something as basic as a bank account isn’t a smooth process – at least for now.

Dubai’s Virtual Assets Regulatory Authority (VARA), a dedicated regulator for the industry, hasn’t yet released a comprehensive regulatory framework that companies can use to create or launch products, but officials have assured local companies that it will come by the end of the year, two people told CoinDesk. The regulator, established just seven months ago, has previously issued some guidelines on marketing and advertising for virtual assets.

Bitcoin BTC tickers down $17,787 mining company Marathon Digital Holdings is now understood to be the second-largest holder of Bitcoin in the world among publicly-listed companies.

During the company’s third-quarter earnings call on Nov. 8, Marathon Digital CEO Fred Thiel revealed the company now holds 11,300 BTC, worth around $205 million at the time of writing, “making Marathon the second largest holder of Bitcoin among publicly traded companies worldwide, ” referring to unnamed third-party data.

According to CoinGecko, the Nasdaq-listed crypto miner is ranked second only to MicroStrategy Inc., which holds nearly 130,000 BTC. It’s followed by crypto exchange Coinbase and Jack Dorsey-founded payments company Block Inc.