Daily Crypto News | November 14th, 2022
Welcome to Barmy’s Daily Crypto News – November 14th, 2022
1. Kraken has frozen the accounts associated with “FTX Group, Alameda Research, and their executives”
Following discussions with law enforcement, cryptocurrency exchange Kraken has frozen the accounts connected to “FTX Group, Alameda Research, and their executives” on its platform.
On November 13, Kraken wrote on Twitter that the accounts were frozen “to protect their creditors” and that it “maintains full reserves” and that other users’ funds are unaffected. Kraken was probably attempting to allay user concerns that the exchange might experience liquidity problems as a result of the fund freeze. It claimed to have “actively followed” recent FTX estate developments and to be “in communication with law enforcement,” adding that it had “frozen account access to some money they suspect to be involved with ‘fraud, carelessness, or misconduct’ relating to FTX.
Kraken’s account suspension follows the cryptocurrency exchange FTX’s Nov. 11 announcement that the FTX Group, which consists of about 130 businesses including its sister trading company Alameda Research, filed for Chapter 11 bankruptcy in the United States and that Bankman-Fried has resigned as CEO.
It also happens to be related to a rumored hack on FTX that allegedly involved a Kraken account. On November 12, Kraken’s chief security officer Nick Percoco stated that they are aware of the identity of the account owner and later updated that FTX would issue a statement regarding the situation “and them utilizing funds from their verified [Kraken] account to complete this transaction.”
2. CZ pushed the crypto community to store their own crypto via self-custody crypto wallets
Changpeng Zhao, CEO of Binance, urged the cryptocurrency community to use self-custody crypto wallets to hold their own coins in a post on November 13.
Self-care is an essential human right. You can do it whenever you want. Just make sure you do it correctly,” he advised, suggesting that investors start with modest sums in order to become familiar with the technology. Michael Saylor, executive chairman of MicroStrategy, also spoke about the advantages of self-custody in light of the current economic climate.
Self-custody, according to Saylor, protects the network from powerful actors by giving investors their own property rights as well. Saylor also argued that because it improves decentralization, self-custody is crucial for preserving the reliability and security of blockchains. Recent events that occurred last week seem to have already pushed a lot of traders and investors in the direction of self-custody options.
According to CoinGecko, the Trust Wallet (TWT) token, a self-custody wallet that Binance acquired, grew 84% to $2.19 over the previous 48 hours before falling to $1.83. With the help of the token, token owners can influence technical decisions and how the wallet functions.
3. Russia’s Central Bank Takes Legislative Initiative in Digital Assets Regulation
The State Duma, the lower house of parliament, will receive a legislative package from the Central Bank of the Russian Federation (CBR) regarding the regulation of digital financial assets (DFAs). DFA refers to coins and tokens with an issuing entity rather than cryptocurrencies like bitcoin under current Russian law.
Olga Skorobogatova, the bank’s deputy chairman, said during a seminar on financial innovations called Finopolis that the ideas’ three primary goals are to improve taxation and get rid of tax arbitrage, build exchange platforms, and regulate smart contracts.
While the Bank of Russia supports the growth of digital financial assets, it is opposed to the use of private cryptocurrencies in settlements, according to CBR Governor Elvira Nabiullina, who was speaking in the Duma. Since more than a year ago, there have been discussions about the legal status of cryptocurrencies and the regulation of the cryptocurrency market in Russia. The CBR has historically maintained a rigid attitude, and in January it proposed a complete ban on associated businesses like mining and trade.
However, the war in Ukraine-related sanctions, including as those restricting foreign payments, have weakened its stance. In September, the monetary authority and the finance ministry came to the conclusion that, given the current situation, Russia could not function without cross-border cryptocurrency payments.
4. Voyager announced the reopening of its bidding process after FTX US filed for bankruptcy
Cryptocurrency exchange CrossTower is working on a revised offer for the assets of defunct crypto lender Voyager Digital. After FTX US, the first winner of the offer, filed for bankruptcy on November 11 in the US, Voyager announced the reopening of its bidding process.
They are currently working on a revised offer that will, in their opinion, be advantageous to both Voyager customers and the larger crypto community. CrossTower has always been and will continue to be, very community-focussed. In September, FTX US secured the winning bid for the assets for approximately $1.4 billion. In the statement disclosed on Nov. 11, Voyager said that “the no-shop provisions of the Asset Purchase Agreement between Voyager and FTX US are no longer binding.
In the statement about the bidding, Voyager also confirmed its exposure to the FTX collapse, with a “balance of approximately $3 million at FTX, substantially comprised of locked LUNA2 and locked SRM that it was unable to withdraw because they remain locked and subject to vesting schedules.”
Voyager also claimed that it did not transfer any assets to FTX in connection with the sale agreement. FTX US previously submitted a $5 million “good faith” deposit as part of the auction process, which is held in escrow. Additionally, Voyager asserted that it did not give any assets to FTX in accordance with the selling agreement. A $5 million “good faith” payment made by FTX US earlier as part of the auction procedure is being kept in escrow.
5. A Suspicious FTT Unlocking Event Puts Crypto Community on High Alert
The ftx (FTT) deployer contract moved 192 million new FTT coins, which the crypto community took notice of. Nobody is sure why this occurred, but it has added 192 million previously locked tokens to the 133,618,094 FTT supply that was in circulation last evening.
The FTX token Contract Deployer “has transferred out the entirety of supposedly locked FTT tokens into circulation,” according to Coingecko.com’s website. Binance CEO Changpeng Zhao (CZ) tweeted that the company had stopped accepting FTT deposits in a now-deleted tweet.
Similar to the Terra disaster, the FTX collapse happened within six days of the public release of Alameda Research’s balance sheet and the announcement by Binance CEO Changpeng Zhao that his exchange would be selling off all of its FTT tokens.
Ftx (FTT) was trading for $25 per FTT on November 5, 2022, and by November 8 it was trading for less than $5 per coin. The FTX and Alameda teams jointly launched the FTT token in July 2019 as a follow-up to the creation of FTX.
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