Metamask Launches Ethereum Staking Services via Lido and Rocketpool

January 13, 2023 Bitcoin.com

BlockFi sues FTX’s Bankman-Fried over shares in Robinhood

November 29, 2022 Coin Telegraph

Bankruptcy

BlockFi is demanding Bankman-Fried’s investment company turn over its shares in Robinhood as collateral it agreed to pay as part of a pledge agreement.

Newly-bankrupt crypto lending platform BlockFi has filed a lawsuit against Sam Bankman-Fried’s holding company Emergent Fidelity Technologies seeking his shares in Robinhood that were pledged as collateral earlier in November.

The suit was filed on Nov. 28 in the United States Bankruptcy Court for the District of New Jersey just hours after BlockFi filed for Chapter 11 bankruptcy in the same court.

As per the filing, BlockFi is demanding Emergent turnover collateral as part of a Nov. 9 pledge agreement that saw Emergent agree to a payment schedule with BlockFi that it has allegedly failed to pay.

BlockFi names the collateral as “including certain shares of common stock.”

In May, Bankman-Fried acquired a 7.6% stake in the online brokerage firm Robinhood, buying a total of $648 million in Robinhood shares through his Emergent investment company.

BlockFi is one of the latest firms to file for bankruptcy as a result of the collapse of FTX crypto exchange.

The crypto firm initially previously denied that a majority of its assets were held on FTX earlier in the month, but also acknowledged “significant exposure” to FTX.

In its bankruptcy filing, BlockFi stated that it has assets between $1 billion and $10 billion with liabilities in the same range, along with over 100,000 creditors.

Binance CEO shares ‘two big lessons’ after FTX’s liquidity crunch

November 9, 2022 Coin Telegraph

bnb

CZ took to Twitter on Nov. 8 sharing "two big lessons" that crypto companies should learn amid the downfall of crypto exchange FTX.

Binance CEO Changpeng “CZ” Zhao has shared his take on "two big lessons" to be learned from the FTX saga, saying cryptocurrency firms shouldn’t use their own tokens as collateral and should also keep “large reserves.”

In a Nov. 8 tweet, Zhao laid out two learnings after the significant “liquidity crunch” at FTX which has ultimately resulted in a non-binding letter of intent from Binance to acquire the struggling exchange.

Two big lessons:

1: Never use a token you created as collateral.

2: Don’t borrow if you run a crypto business. Don't use capital "efficiently". Have a large reserve.

Binance has never used BNB for collateral, and we have never taken on debt.

Stay #SAFU.
— CZ Binance (@cz_binance) November 8, 2022

Zhao shared that his first lesson is to ensure a firm's collateral should not consist of a token that it has created, and claims his exchange’s token — Binance Coin (BNB) — has never been used as collateral for its services.

FTX’s liquidity issues appeared to have come after a Nov. 6 tweet from Zhao saying Binance would be liquidating its holdings of FTX token (FTT) following “recent revelations” related to reported ties between FTX and the trading firm Alameda Research showing the firm had significant FTT holdings.

While Binance does not currently disclose proof of what reserves it uses as collateral, Zhao mentioned in a Nov. 8 tweet that in an effort to be fully transparent Binance will soon provide proof of reserves, adding:

“Banks run on fractional reserves. Crypto exchanges should not.”

Zhao’s second lesson from the downfall of FTX is that crypto businesses shouldn't be borrowing, and instead should opt to maintain large reserves — which could be in reference to FTX users complaining of sluggish withdrawals on Nov. 7, sparking rumors the exchange didn't have enough to cover user funds.

Zhao's tweet confirming Binance's FTT holdings liquidation ended up triggering what some called a “bank-run” on the exchange, with analytics platform CryptoQuant data revealing that FTX’s Bitcoin (BTC) balance had fallen by 19,956 on Nov. 7 alone.

At the time of writing, FTT is down 75% in the last 24 hours, with the last price around $5.70 at the time of writing compared to its opening price of $22.14.

Bitgo Reveals Wrapped Dogecoin Token Built on Ethereum

November 6, 2022 Bitcoin.com

Celsius moved $529M worth of wBTC to FTX exchange: Should we be worried?

July 8, 2022 Coin Telegraph

Celsius

The crypto community is concerned that the transfer could lead to the dumping of more than $500 million Bitcoin into the market.

Embattled lending platform Celsius has transferred nearly 25,000 Wrapped Bitcoin (wBTC), worth $528.9 million to crypto exchange FTX, prompting concerns from some in the community about whether a dump may soon follow.

The huge transfer to the exchange comes after the lending platform paid off its remaining $41.2 million of debt to Maker (MKR) protocol, freeing up its loan’s entire wBTC collateral.

However, the community is unsure what to make of the transfer, with some fearing that a dump of the wBTC on the exchange could soon follow, pushing Bitcoin prices down.

Others have been more hopeful that the move may be in preparation for Celsius to swap their wrapped Bitcoin for BTC, which may be a good sign for depositors who’ve been hoping for Bitcoin withdrawals to eventually reopen on the Celsius platform. Bitcoin is up 8% in the past 24 hours to trade above $22,100, suggesting market participants are taking the news in their stride.

The 21,962 WBTC unlocked from paying off the remaining DAI loan has already found its way to FTX...

that didn't take long...

Incoming $BTC dump? https://t.co/A9B9YaLQ1W #CelShortSqueeze = #CelPumpAndDump

Not your keys, not your crypto pic.twitter.com/V2edblhmXZ
— Airdawg (@Colwellinvestor) July 7, 2022

The 25,000 wBTC sent to FTX follows the news earlier today that 150,000 BTC may be potentially released into the market as Mt.Gox creditors get their BTC back after an eight-year wait.

So far, both Celsius and CEO Alex Mashinsky have remained radio silent about any movement of funds.

Crypto lawyer Joni Pirovich, Principal of Blockchain & Digital Assets told Cointelegraph on July 7 that Celsius’ repayment of its loan position with Maker will ultimately assist its customers.

“Maker protocol relies on overcollateralized loan positions, so the loan repayment of US$41 million worth of DAI released 21,962 WBTC of capital which is now available to meet customer withdrawal requests.”

Pirovich added that even if Celsius ends up filing for bankruptcy, that repaying the loan position and withdrawing collateral could improve the position of customers.

“The question is what will Celsius do with the withdrawn collateral? Keep it in reserve for customers or risk it to trade and on-lend.”

collateral