Crypto News Headlines (10-Nov-2022)

Singapore-based crypto lender Hodlnaut has been dealt another blow on its path to recovery after it emerged that it held $18 million worth of crypto on FTX, the crypto exchange that halted withdrawals earlier this week.

According to a report by Hodlnaut’s interim judicial managers, which was published on Oct. 28, Hodlnaut consolidated over 95% of its assets on centralized exchanges, with $18.1 million being held on FTX including bitcoin (BTC), ether (ETH) and stablecoins.

FTX customers are currently unable to get funds out of the exchange after a liquidity crunch that stemmed from a CoinDesk report exposing the vulnerable financial situation of Alameda Research – FTX’s sister company.

Egyptian fintech startup Moneyfellows recently revealed it had raised $31 million from its Series B funding round which was led by Commerz Ventures, Middle East Venture Partners (MEVP), and Arzan Venture Capital. Also participating in the round were the startup’s existing investors like Partech, Sawari Ventures, 4DX Ventures, and P1 Ventures.

According to a Disrupt Africa report, Moneyfellows, a mobile platform-based that specializes in digitizing Egypt’s savings and credit associations, plans to use the capital raised to fund the startup’s expansion into new markets. There are plans to use the recently raised capital to hasten Moneyfellows’ growth and the diversification of its portfolio, the report added.

The crypto market is deep in the red Thursday morning as the industry continues to reel from the fallout of Sam Bankman-Fried’s empire and Binance’s decision to walk away from the earlier announced plan to purchase the troubled FTX exchange.

Bitcoin (BTC) fell as low as $15,742 on Wednesday night before rebounding to the current price of $16,309, which is still a drop of 6.4% over the past 24 hours, per CoinGecko.

The industry’s leading cryptocurrency last traded below the $16,000 level during the November 2020 bull run.

The market has dramatically changed, with the overall negative sentiment among investors wiping off almost $100 billion of the cumulative market capitalization of all digital assets in a mere 24 hours.

Bankrupt crypto lender Celsius Network said on Thursday that it has filed a motion to extend the exclusivity period for its reorganization plan.

This would allow the lender to take more time to work on a reorganization plan.

Celsius today filed a motion requesting approval to extend the Exclusivity Periods in our cases. This is the period when Celsius has the exclusive right to submit a plan of reorganization.

— Celsius (@CelsiusNetwork) November 10, 2022

Celsius is facing a slew of lawsuits in addition to its bankruptcy proceedings. A recent motion pitted the shareholders of the firm against its customers over who gets preference over the beleaguered lender’s assets and repayment.

Following the FTX bank run, which accelerated by Nov. 7, Bitcoin BTC tickers down $16,412

 price started to buckle and, at the time of writing, lost 21% in five days. Among the victims of the swift market meltdown is the world’s largest institutional Bitcoin fund, the Grayscale Bitcoin Trust (GBTC).

On Nov. 9, the GBTC closed at a record discount of 41%, with a price per share standing at $8.76. Overall, the GBTC has been gradually declining for almost a year since its peak position of $51.47 per share on Nov. 12, 2021.

A structural problem of GBTC lies in the fact that it’s an investment trust fund with its shares not freely created nor offering a redemption program. This inefficiency creates significant price discrepancies versus the fund’s underlying Bitcoin holdings.

The CEOs of Coinbase (COIN), Ripple and Circle said that a lack of a clear framework from regulators was the reason why most of the crypto trading in the U.S. occurs on offshore exchanges – like the now-struggling FTX.

Replying to a tweet by Senator Elizabeth Warren on the collapse of crypto exchange FTX, Coinbase CEO Brian Armstrong said that FTX was not registered in the U.S. Armstrong added that a lack of clarity from the SEC is the reason most U.S. trading activity occurred offshore.

Backing Armstrong, Ripple CEO Brad Garlinghouse pointed to the regulatory framework in Singapore as an example.

“Brian is right – to protect consumers, we need regulatory guidance for companies that ensures trust and transparency. There’s a reason why most crypto trading is offshore – companies have 0 guidance on how to comply here in the US,” Garlinghouse said.

On Nov. 9, 2022, The Straits Times (TST) business correspondent Claire Huang reported that a spokesperson from Temasek Holdings has been engaging with FTX. Temasek is Singapore’s state-owned holding company that was established in 1974. Temasek’s assets under management (AUM) as of 2022 are estimated to be worth around S$403 billion.

“We are aware of the developments between FTX and Binance, and are engaging FTX in our capacity as a shareholder,” the Temasek spokesperson reportedly told Huang. The news follows Binance CEO Changpeng Zhao (CZ) telling the public his company would acquire FTX, with details to be announced in the near future. However, following CZ’s initial statements, Binance revealed on Nov. 9 that it has officially backed out of the deal to acquire FTX.

Helium network founder Amir Haleem tweeted his support late Wednesday for the decentralized wireless network’s migration to Solana, the blockchain ecosystem perhaps hardest-hit by FTX’s sudden implosion.

“None of the criteria we used to evaluate the various L1 blockchains has changed from when we proposed HIP70 and now,” he said, referring to the community vote that saw Helium abandon its own blockchain in favor of Solana’s in late September.

The vote of confidence came after a bloody, 24-hour drawdown in crypto markets in which SOL shed over 40% of its value and Helium’s HNT lost 15%. Haleem, CEO of Helium backer Nova Labs, said he was unfazed by the bear market carnage and pledged to continue apace.

i still believe that those of us who went through those times understand what it takes to make it. this cycle feels just as bad, or worse. but i have absolute conviction that the team @solana is going to stay strong and focused, even when things feel impossibly hard

— amir.hnt (🎈,🫡) (@amirhaleem) November 10, 2022

Nearly every major cryptocurrency is in the red this week after crypto exchange FTX revealed its liquidity crunch—and it’s getting worse now that Binance has opted not to rescue the firm. And outside of FTX’s own FTT token, no top crypto is taking it harder right now than Solana.

Solana (SOL) has fallen 60% over the last seven days to a current price of under $13 per token, according to data from CoinGecko, including a 45% plunge over the past 24 hours.

Since news of FTX’s liquidity issues broke on Tuesday morning, Solana has lost over half of its value—about 57%. Now key founders of the blockchain network are attempting to salvage fading enthusiasm around the space as the ecosystem suddenly finds itself embroiled in crisis.

In the wake of the FTX liquidity crisis, two major crypto exchanges have announced that they will provide Proof of Reserves, also known as Proof of Funds (PoF) within the next month.

In an official tweet, OKX stated, “We’re hiring Armanino for auditing & will publish an auditable Merkle POF asap.” The company then listed 23 BTC addresses and 13 Ethereum addresses containing some of the exchange’s reserves.

For #OKX, transparency, risk management, & consumer protection come first.

We’re hiring Armanino for auditing & will publish an auditable Merkle POF asap.

Here are 23 BTC addresses (~69K BTC) & 13 ERC20 addresses (~ $2+ BN) as a of our reserves for users to verify.

— OKX (@okx) November 9, 2022

In an earlier tweet, OKX had stated that their PoF would be done “in the coming weeks (within 30 days).” This timeline has now been updated to “asap.”

It’s critical for all major crypto venues to publicly share their auditable merkle tree proof-of-reserves or POF.

We plan to publish ours in the coming weeks (within 30 days). This is an important step to establish a baseline trust in the industry.