Welcome to Barmy’s Daily Crypto News – November 9th, 2022
1. In 72 hours FTX saw roughly $6 billion in withdrawals
The largest exchange in terms of the number of trades in digital currencies, Binance, has announced that it is planning to buy the cryptocurrency trading platform FTX. This has caused a stir in the world of cryptocurrencies. Sam Bankman-Fried, the CEO of FTX, also stated that more information about the purchase would be made public after the fact.
It looked like a classic run on the bank: panicky investors pulling money out of FTX faster than it could sell assets to produce the cash. One person briefed on the fundraising blitz said what started as a $1bn ask was looking more like $5bn-$6bn by midday
When FTX speculation peaked before to the acquisition, the crypto economy initially took a hit; however, when CZ made the announcement, a number of major crypto assets recovered. The cryptocurrency market’s recovery did not persist for very long, and once further information about FTX’s business practices emerged, investors appeared to be alarmed by the news.
Bitcoin (BTC) fell by 14.6% in a day while ethereum (ETH) lost 19.8% versus the dollar and fell below $1,300 per ether. Although BTC is now down 12.5% and ETH is now down 17% versus the US dollar, both coins have managed to recover a little.
2. Coinbase’s & Kraken’s platforms were down or experiencing intermittent latency issues
On November 8 amid market turmoil, customers reported on Twitter that both Coinbase and Kraken’s services were offline or having sporadic latency issues. The news came after the day’s earlier disclosure that cryptocurrency exchange Binance plans to buy out rival FTX.
Users of Twitter reported that both exchanges’ services were limited, with connectivity troubles to the platforms and unsubstantiated rumors of suspended withdrawals. In its support profile, Coinbase stated that Coinbase.com, Coinbase Pro, and Coinbase Prime were “experiencing network connection problems. Signing in could be challenging as a result of this. The mobile app and the website may load slowly if you are already logged in. The issue, according to the exchange, was caused by the platform receiving a large number of new user sign-ups and transactions on November 8.
Kraken declined to comment on the problems via its public channels, but it did point out that it uses proof-of-reserves checks, allowing customers to check their exchange balances as well as the assets it backs.
3. BaFin has issued an order to Coinbase Germany GmbH for violating “proper business organization”
In compliance with the nation’s banking legislation, the BaFin, or Federal Financial Supervisory Authority of Germany, has issued an order pertaining to the business organization of Coinbase’s local branch.
According to a Nov. 8 notice from BaFin, the company was given the order for failing to comply with the German Banking Act’s requirements for “appropriate business organization.” The German division of Coinbase 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,” according to a copy of the law made available by the United States Commodity Futures Trading Commission.
It should also be able to provide certificates of audit related to appropriate reports on its annual accounts. BaFin described the outsourcing of some of Coinbase’s operations by its Germany-based subsidiary as “necessary for conducting banking business or providing financial services.” Since October 27th, the directive has been in force.
According to BaFin, an audit of the institute’s yearly financial accounts showed that there were organizational issues. “The company organization’s regularity was not given in all audited areas,” Regulation is seen as a commercial facilitator by Coinbase, and steps have already been taken to implement the BaFin-recommended requirements. To allay the worries of BaFin, they have created a remediation plan that adequately addresses each conclusion in the audit report. They have made good progress thus far on this plan.
4. Oasys Aims to Open Japan’s Gaming Markets to Developers Worldwide
Oasys is a gamefi-focused blockchain that aims to take use of its position as a Japan-based project to provide resources for foreign game developers to access this sizable gaming market. “Gamefi” is simply the junction of gaming and finance. On Nov. 2, the business unveiled a relationship with the gaming guild YGG that will enable products created utilizing Oasys’ services to benefit from specialized marketing and promotional assistance to boost their performance in Japan.
Oasys’ objective is to expand the blockchain gaming industry in Japan, one of the world’s top gaming markets. Japan is presently the third-largest market in the world for gaming income, after China and the United States, according to the “Global Markets Report 2021” published by Newzoo. In 2021, the gaming industry reported $22.9 billion in revenues, with 75.62 million players actively partaking in these activities.
Oasys hopes to profit from the challenges faced by foreign businesses trying to join the Japanese market. In spite of the enormous revenue generated, only 15% of the games played in Japan are from elsewhere. This is due to the fact that localization involves more than just language translation and sometimes involves modifying games to more effectively appeal to the Japanese user base.
After Oasys stated it would launch phase one of its mainnet on October 25 with assistance from businesses including Bandai Namco, Square Enix, Ubisoft, and Sega, this partnership followed.
5. Denying users access to DEX based on their wallets is a backward move
Although some argue that restricting users access to decentralized exchanges based on their wallets is a retrograde step, DeFi is anticipated to be an improvement to conventional financial institutions.
Entrepreneur Brad Mills blasted DeFi in a tweet for excluding customers from decentralized exchanges (DEXs) based on characteristics including geography and wallet content. As a result, Mills called Web3’s future a “surveillance panopticon” and claimed that it had recreated all of Wall Street’s flaws but on a blockchain. Mills included a picture of a pop-up notification from 1inch Network’s decentralized application (DApp) prohibiting access due to the used wallet address along with the tweet.
The chief communications officer of 1inch, Sergey Maslennikov, said in a statement that restricting wallets is a part of their efforts to establish a secure and law-abiding community environment. Maslennikov claims that the DeFi aggregator adheres to all relevant sanctions and embargo lists. In addition, the DEX complies with international efforts to prevent terrorist financing and anti-money laundering (AML) legislation.
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