Market Update: November 18, 2022

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Two sets of documents from FTX’s lawyers were filed, one of which was critical of former CEO Sam Bankman-Fried. “I have never witnessed such a catastrophic collapse of corporate controls in my experience,” says John Ray, the new CEO. The risk-averse division of the business was planned to be FTX US. According to Ray, Alameda had issues with “the absence of daily reconciliation of positions on the blockchain, the employment of software to disguise the misappropriation of customer cash, and the covert exemption of Alameda from some components of FTX.com’s auto-liquidation protocol.” Before recently, FTX never had a working board of directors. A $250 million loan from FTXUS was given to BlockFi in the form of the company’s FTT utility token. Numerous staff members were ignorant of digital assets’ flaws or potential mixing. Assets from FTX Digital Markets were transferred to a digital wallet under the Securities Commission of the Bahamas’ jurisdiction. Late on November 11, strangely, shifting assets started to leave FTX accounts. A call to the Bahamas regulator’s contact number went unanswered shortly after the announcement. Bankman-Fried, a co-founder of FTX DM, is attempting to obstruct the Chapter 11 proceeding in the United States by securing assets in the Bahamas. The Bahamas Securities Commission claims that it is unaware that FTX DM is involved in American bankruptcy proceedings.

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“Among cryptocurrencies, Bitcoin sets itself apart from others, even during the ongoing turmoil in the market,” said Alan Lane, CEO of Silvergate, during the Oppenheimer Blockchain & Digital Assets Summit: Web 3.0 and the Creator Economy. The company claimed to have little exposure to FTX, claiming that it had no outstanding loans or deposits on the exchange totaling less than 10% of $11.9 billion in customer digital asset deposits. “The market may be stumbling, but there are always buyers, especially for bitcoin,” said Lane. He also added that we will get through this as we have earlier and will continue to serve the industry. With around $770 million in bitcoin as collateral, Silvergate, a London-based bitcoin lending company, has outstanding loans totaling $300 million. Silvergate SEN will be the name of the organization’s next “tokenized dollar” stablecoin project, which had been announced earlier in the year but would delay launching.

An urgent loan of $1 billion was sought by Genesis from investors before informing clients that redemptions were being suspended in the wake of FTX’s collapse. According to The Wall Street Journal, Genesis requested access to the credit facility by 10 a.m. Monday, alleging a liquidity shortage. The company was unsuccessful in obtaining the financing, according to a private fundraising document seen by the newspaper. Following the demise of FTX, Genesis informed clients that redemptions would be suspended.

That’s it for today, see you tomorrow

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