25. January 2023
• BlockFi’s financials were leaked, showing a $1.2 billion exposure to FTX and Alameda.
• Poor management at FTX impacted the now-bankrupt crypto lender BlockFi.
• On November 24, BlockFi provided a report related to the creditor committee’s objection that BlockFi was planning to pay key employees $12.3 million in retention payments.
BlockFi, a crypto lender, has been under the spotlight for its ties with FTX. Recently, leaked financials have exposed the extent of the damage, showing a $1.2 billion exposure to the collapsed platform. The documents were released by mistake, with more information than previously shown.
This revelation comes as poor management at FTX continues to haunt BlockFi. On Nov. 29, during its first hearing day, its lawyers stated that $355 million was stuck in FTX and $680 million in Alameda. These figures have now risen significantly, as the latest financial reports show a connection of $415.9 million worth of assets linked to FTX and $831.3 million to Alameda.
The report from CNBC cites previously leaked financials by M3 Partners, advisors to the BlockFi creditor committee. M3 partners explained that the upload was erroneous. It’s not the first time that BlockFi has released redacted declarations. On November 24, it provided one related to the creditor committee’s objection that BlockFi was planning to pay key employees $12.3 million in retention payments. This report was challenged as BlockFi is under limited operations, meaning it does not have the right resources to service such a commitment.
A subsequent filing shows that the company left out certain parts of the reports under the guise of trade secrets, confidential commercial information, research, and development. With these documents now in the public domain, it’s up to BlockFi to explain the implications of its financials. The company has since taken down the financials as they were not meant to be released.
With the extent of BlockFi’s exposure to FTX and Alameda now revealed, creditors are seeking compensation for the money that has been lost. It remains to be seen how the crypto lender will respond to this situation and how it will protect itself from further financial damage.
18. January 2023
1. The collapse of the FTX exchange sent chills to crypto investors as hot wallets gained popularity in the crypto custody space.
2. A survey by CoinWire and TK Ventures revealed that 53% of digital assets are held on Metamask, Trust Wallet and Phantom, with CEXs like Binance following closely behind.
3. Cold wallets such as Ledger and DeFi protocols account for a much smaller proportion of digital assets held.
The collapse of the FTX exchange in December 2020 has sent chills throughout the crypto industry. Investors have become wary of the security of their crypto assets, and many have turned to hot wallets as a more secure form of crypto custody. Hot wallets are digital wallets which keep a user’s private keys secure, allowing them to retain full control of their funds. This has become increasingly popular in the wake of the FTX saga.
To better understand the current state of crypto custody, CoinWire and TK Ventures recently conducted a survey of 10,200 crypto-savvy investors. The survey revealed that 53% of digital assets are held in hot wallets such as Metamask, Trust Wallet and Phantom. Centralized Exchanges (CEX) follow closely behind with more than 40%, with Binance accounting for the majority of this figure. Cold wallets such as Ledger account for 27.9%, and DeFi protocols such as BNB Chain, Ethereum and Polygon account for the lowest proportion of digital assets held at 16.8%.
These figures indicate that investors are taking a more cautious approach to crypto custody following the FTX saga. Many investors have opted to hold onto their private keys, allowing them to have full control over their funds and liquidate them whenever they choose. This has led to an increase of hot wallets as the preferred custodians of digital assets.
In response to the FTX saga, many centralized exchanges have implemented proof-of-reserves protocols to ensure that their customers’ funds are safe. Despite this, hot wallets remain the most popular choice among investors who want to ensure full control of their funds.
This survey shows that the FTX saga has had an undeniable impact on the way investors view crypto custody. With hot wallets gaining more popularity, it is likely that this trend will continue in the future.
12. January 2023
• GMX, a growing cryptocurrency project, has surpassed $2.7 million in fees.
• GMX holders will receive 30% of the fees as revenue, approximately $822,000.
• Arbitrum noted on Twitter that the organization (GMX) had surpassed $100 million in total fees.
GMX, a growing cryptocurrency project, has made significant strides in the last few months. On January 9th, 2023, the project surpassed $2.7 million in fees, a difference of $900,000 recorded on Jan.8th ($1.8M in 24hrs). These fees are generated from both the spot and perpetual DEX created on Avalanche and Arbitrum respectively. This is considered to be a record high for the project since its introduction in September 2021, only second to Ethereum.
GMX holders will receive 30% of these fees as revenue, amounting to approximately $822,000. This was made possible through a unique incentive structure, where GMX token holders receive a share of the platform’s liquidity fees. The 24hr price of GMX is currently $44.41 with a $13,895,628 trading volume in both centralized and decentralized exchanges having $11,048,665 and $2,846,963 respectively. GMX is currently ranked 79th on Coinmarketcap with a market capitalization of $372.5 million and a circulating supply of 8.4 million (GMX coins). Its fully diluted market cap is $390 million, with a 1.35 increase.
In addition, GMX’s website indicates a total volume of $76 billion, with a deviation of +47.7 million. It also states that it has a total fee of $105 million (an increase of 81.2 k). On January 6th, Arbitrum noted on Twitter that the organization (GMX) had surpassed $100 million in total fees. This is a remarkable achievement for the project, and the team behind the project is looking to capitalize on this success.
GMX has seen a steady growth in its user base and open interest since its inception. It has recorded an increase of 123 users from 182,217 unique ones and an open interest of $119 million. The project also has an active community of investors and developers that are constantly working towards its growth and development.
Overall, GMX is on track to become one of the top performing cryptocurrency projects in the near future. With its strong fundamentals and improved incentive structures, GMX is set to challenge even the biggest cryptocurrency players in the industry.
5. January 2023
• OKX has implemented API key security protection measures to increase user protection.
• These measures include an auto-expiry feature and third-party whitelist.
• Additionally, Fast Connect, a risk engine, and other features have been added for additional security.
OKX, a Seychelles-based cryptocurrency platform, has announced a range of new security features designed to protect its users from external threats. These features focus on application programming interface (API) key security, offering users a suite of tools to ensure their digital assets are protected.
The new security measures include an auto-expiry feature that automatically terminates API keys with trade and withdrawal permissions that have been inactive for 14 days. This feature adds an extra layer of protection against malicious actors who may attempt to gain access to a user’s account. Additionally, OKX has introduced a third-party whitelist that enables users to link their IP addresses to working third-party networks, and guarantees that any transactions from the connected platforms are secure.
OKX has also implemented Fast Connect, a fast API that allows customers to quickly authorize brokers to access, produce, and bind API keys with only a single click. This feature adds extra security to the API key binding process. Finally, OKX also has a “risk engine” which can track and alert users to suspicious transactions, allowing the platform to lock down specific accounts in order to prevent any potential losses.
The Chief Marketing Officer of OKX, Haider Rafique, has described the new security protection features as the most comprehensive in the crypto sector, and expressed hope that the measures will lead to a much higher level of user safety and trust in the platform. With these new features, OKX has taken a significant step forward in ensuring that its users can safely trade and store digital assets on the platform.
• The Israel Securities Authority (ISA) has proposed draft amendments to regulate digital assets like cryptocurrencies.
• The proposed amendment seeks to protect citizens from the risks associated with trading digital assets.
• The amendment would see digital assets regulated by the same rules governing securities like stocks, ETFs, and other instruments.
The Israel Securities Authority (ISA) is looking to protect citizens from the risks associated with trading digital assets. The regulator has proposed draft amendments that would see digital assets regulated by the same rules governing securities like stocks, exchange-traded funds (ETFs), and other instruments.
The proposed draft amendment is intended to be agile and flexible so that laws can be quickly drafted and implemented to suit the fast-paced, highly dynamic nature of cryptocurrencies and blockchain. The objective is to ensure the safety of investors and to prevent the increasing risks in crypto which have risen since 2022.
The contraction of crypto prices and macroeconomic factors in the country and across the globe saw asset valuations more than halved, compounding the problems for some CeFi operators. This led to the collapse of FTX and the bankruptcies of leading lending platforms like Voyager Digital, BlockFi, and Celsius Network.
Celsius Network was headquartered in Hoboken, New Jersey, but maintained offices in four other countries. Its CEO, Alex Mashinsky, has roots in Israel. Reports indicated that investors are yet to reclaim over $4.2 billion from the Celsius Network as of July 2022. As of early September 2022, Celsius Network was looking to reimburse $50 million of the over $200 million in customer funds locked up in the platform.
The proposed amendment, if passed into law, will ensure that the interests of the public investing in securities are safeguarded, and that the risks associated with trading digital assets are minimized. It is expected to ensure the safety of investors and to prevent the increasing risks in crypto, while also providing a legal framework for the country to be more agile and flexible in regulating the crypto space.