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Report: Before the Bankruptcy Filing, FTX Co-Founder SBF Was Told by Crypto Execs to ‘Stop Trying to Depeg Stablecoins’

Report: Before the Bankruptcy Filing, FTX Co-Founder SBF Was Told by Crypto Execs to ‘Stop Trying to Depeg Stablecoins’According to a recent report published by the Wall Street Journal (WSJ), cryptocurrency executives were allegedly concerned that Sam Bankman Fried’s (SBF) Alameda Research was trying to “depeg stablecoins.” Purportedly, high-up executives from crypto exchanges are members of a Signal chat group called “Exchange coordination,” and Binance CEO Changpeng Zhao (CZ) ostensibly told SBF to […]

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Washington Post, Forbes, Wall Street Journal Slammed for ‘Puff Piece’ Reports on FTX and Alameda Execs

Washington Post, Forbes, Wall Street Journal Slammed for ‘Puff Piece’ Reports on FTX and Alameda ExecsFollowing the highly criticized New York Times article that features commentary from the former CEO of FTX, Sam Bankman-Fried (SBF), the public continues to give the mainstream media flak for publishing “puff pieces” about SBF and the Alameda Research executive Caroline Ellison. A number of articles have been called out for being too lenient on […]

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GBTC Manager Insists the ‘Holdings of Grayscale’s Digital Asset Products Are Safe and Secure’

GBTC Manager Insists the ‘Holdings of Grayscale’s Digital Asset Products Are Safe and Secure’On Nov. 18, 2022, at 5:47 p.m. (ET), Grayscale Investments’ official Twitter account shared information on the safety and security associated with Grayscale’s digital asset products. The update from Grayscale follows the recent FTX collapse that has shaken crypto investors, and Digital Currency Group’s (DCG) Genesis pausing the firm’s lending unit in terms of withdrawals […]

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Meta reportedly plans ‘large-scale layoffs,’ but what of its metaverse division?

As of the end of September, Meta had more than 87,000 employees — a large proportion of which is said to work in the Reality Labs division.

Social media and tech giant Meta is reportedly gearing up for “large-scale layoffs” this week amid rising costs and a recent collapse of its share price.

According to Wall Street Journal (WSJ) report on Nov. 6 citing people familiar with the matter, the planned layoffs could impact thousands of employees in a broad range of divisions across Meta’s 87,000-strong workforce.

It is not currently understood whether the firm's Reality Labs division, which registered a $3.7 billion loss in the third quarter, would see staff cuts. 

Last week, Meta CEO Mark Zuckerberg said that the company would be focusing its investment on “a small number of high-priority growth areas," including its Artificial Intelligence (AI) Discovery Engine and its advertisement and business messaging platforms in addition to the Metaverse, stating: 

“So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year [...] In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.”

During the earnings call, the billionaire entrepreneur appeared to double down on the firm’s investments in these areas, saying he believes they’re “on the right track with these investments” and should “keep investing heavily in these areas.”

Related: Zuckerberg’s $100B metaverse gamble is ‘super-sized and terrifying’ — Shareholder

The report comes only a week after Meta reported its third-quarter earnings, which missed revenue expectations and saw a rise in its operating costs. Its stock price also took a battering, with shares in Meta currently priced at $90.79 — down 7.56% over the last five days and 73.19% year-on-year, according to Yahoo Finance.

The company appears to still be actively hiring into its metaverse division regardless, with its list of job openings revealing 38 of its 413 listings are related to Augmented Reality and Virtual Reality.

Cointelegraph has reached out to Meta for clarification and whether there would be any changes to its metaverse division  but did not receive an immediate response. 

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Coinbase Responds to Wall Street Journal Proprietary Trading Allegations in New Blog Post

Coinbase Responds to Wall Street Journal Proprietary Trading Allegations in New Blog Post

Crypto exchange Coinbase says it does not engage in proprietary trading, a speculative investment practice that the federal regulation known as the Volcker Rule restricts because of its role in the 2008 financial crisis. In a new blog post, the California-based firm refutes a claim by The Wall Street Journal that it uses its own […]

The post Coinbase Responds to Wall Street Journal Proprietary Trading Allegations in New Blog Post appeared first on The Daily Hodl.

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Contagion: Genesis faces huge losses, BlockFi’s $1B loan, Celsius’s risky model

A leaked investor call from Morgan Creek Digital suggests BlockFi liquidated 3AC for $1 billion, while Celsius reportedly maintained a highly risky assets-to-equity ratio last year that may have caused its recent liquidity woes.

It’s been another day of watching the ripples of contagion spread through the crypto market.

With Three Arrows Capital being ordered into liquidation by a British court, details have also emerged today of BlockFi liquidating a $1B loan to 3AC, and the fallout from the insolvency was partly to blame for lending firm and market maker Genesis Trading facing losses of “a few hundred million dollars."

Withdrawals remain suspended at the possibly insolvent lending and borrowing platform Celsius, which was revealed to have had a highly risky 19 to 1 assets-to-equity ratio before it ran into liquidity troubles this year.

Celsius’ risky business

According to documents reviewed and reported on by the Wall Street Journal (WSJ) on June 29, Celsius was operating on very fine and risky margins as it ballooned in value over 2021.

According to documents prepared before the last equity raise, Celsius, which claimed to be a less risky alternative to a bank, had an assets-to-equity ratio of $19 billion to $1 billion midway through last year, while also issuing out many loans that were undercollateralized.

The assets-to-equity ratio refers to the proportion of a firm’s assets that has been funded by shareholders. The ratio generally represents an indicator of how much debt a firm has leveraged to finance its operations, with higher ratios often suggesting a firm has utilized substantial financing and debt to remain afloat.

The ratios differ from sector to sector, as do the assets held by the specific entities, however Celsius’s already high 19-to-1 ratio is seen as extra risky due to the firm’s exposure to crypto, leverage and lending.

Eric Budish, an crypto-versed economist at the University of Chicago’s business school stated that “It’s just a risky structure,” as he likened Celsius’ operations to that of financial firms in the lead up to the 2008 housing bubble:

“It strikes me as diversified as the same way that portfolios of mortgages were diversified in 2006. It was all housing— here it’s all crypto.“

Reports also surfaced that Voyager Digital has sent more than $174 million to Celsius over the past few months. The transactions were confirmed by analytics platform Nansen this week, however the nature of the funding or whether it is a loan is unclear.

Genesis facing hundreds of millions in losses

Digital Currency Group’s market maker and lending firm Genesis Trading is reportedly facing losses in the hundreds of millions according to sources reported by DCG publication Coin Desk.

The losses relate in part to the company’s exposure to 3AC and the crypto lender Babel Finance. Genesis is putting a brave face on the losses and still has hope of receiving partial repayments, with other losses offset by hedging. CEO Michael Moro said the firm had mitigated losses with “a large counterparty who failed to meet a margin call to us.”

“We sold collateral, hedged our downside, and moved on. Our business continues to operate normally and we are meeting all of our clients' needs."

Battle for BlockFi

A leaked investor call from hedge fund Morgan Creek Digital confirmed the liquidation of a large unnamed client by BlockFi on June 16 was 3AC.

During the call, Morgan Creek’s managing partner Mark Yusko and co-founder Anthony “Pomp” Pompliano stated that BlockFi had “reported” to the firm the loan was worth $1 billion and overcollateralized by 30%.

Pomp went on to state that roughly two-thirds of $1.33 billion collateralization was in Bitcoin (BTC) and was immediately liquidated once 3AC was unable to make repayments. The other third was said to be in Grayscale Bitcoin Trust (GBTC) shares worth around $400 million.

Grayscale’s BTC trust is designed to be pegged to the spot value of BTC, however it often trades for either a premium or a discount.

Related: British Virgin Islands court reportedly orders to liquidate 3AC

According to Pomp, BlockFi ran into troubles liquidating the position as the GBTC discount dropped to around 34%, and the price went down as the firm went to sell the holdings.

With FTX reportedly planning to purchase a stake in BlockFi following the issuance of a $250 million revolving credit facility to the firm, the call also discusses how Morgan Creek was looking to raise $250 million to purchase 51% of the firm. Such a sum would give BlockFi a valuation of just $500 million, well below its reported valuation of $5 billion in June 2021.

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Celsius Stories Littered With ‘People Familiar With the Matter’ Sources, Report Claims Lender Struggles With Arguments Over Bankruptcy

Celsius Stories Littered With ‘People Familiar With the Matter’ Sources, Report Claims Lender Struggles With Arguments Over BankruptcyThe embattled crypto lending platform Celsius has kept withdrawals and transfers frozen since June 12 and told the Celsius Network community that the “process will take time.” Since then, Celsius users are wondering why they are still receiving weekly rewards, and reportedly the company’s management has been arguing with its lawyers over whether or not […]

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WSJ says ‘the NFT market is collapsing’ but the data says otherwise

An article by the WSJ suggesting the non-fungible token (NFT) market is “collapsing” doesn’t show the full picture as contrasting analysis reveal a consolidation is instead taking place.

An article in the Wall Street Journal has claimed sales of non-fungible tokens (NFTs) are “flatlining” — in the same week that the top five collections alone accounted for more than $1 billion in primary and secondary sales.

The article cited data from NFT market analysis platform Nonfungible suggesting the number of NFT sales has fallen by 92% since an all-time high in September 2021. Wallets active in the Ethereum (ETH) NFT market were also said to have declined by 88% since a high in November 2021.

“The NFT market is collapsing,” the article concluded.

Red line shows number of sales with volume on left y-axis, white shows active market wallets, volume on right y-axis. Source: Nonfungible

However, onchain data from Dune Analytics’ dashboard suggest that the NFT market is still robust, with information showing that NFT users and transactions are much higher than what’s reported by Nonfungible.

Dune Analytics total active NFT users
Dune Analytics NFT transactions per day

Analytics also show that volume per day in USD on Ethereum NFTs over the week is some of the highest seen since February with popular marketplace OpenSea seeing nearly $550 million in volume on May 1 alone.

Dune Analytics. Source.

Analysis from Tom Schmidt, partner at venture capital firm Dragonfly Capital shows a similar story when focused on OpenSea transactions and USD volume.

Sub-sectors within the NFT market are emerging and while some areas of the oversaturated market are in a downturn, others are seeing major gains.

Nansen’s analytics platform which indexes NFT collections by type show that “Blue Chip” NFTs — established and highly prized brands such as the Bored and Mutant Ape Yacht Club and Azuki tokens — are far outperforming art or gaming tokens.

The Nansen Blue Chip-10 Index tracking the top 10 NFT projects is up 81% year to date (YTD), while comparatively the indexes tracking the top art and gaming NFT collections are respectively down 39% and 49% YTD.

This phenomenon of NFT market capital consolidating into the top collections was pointed out in an analysis by NFTstatistics.eth who shared a chart in late April showing the top 5 collections are driving the Ethereum NFT market.

“There’s clearly a trend right now that five or six of the most successful projects are sharply outperforming while the rest are flat to down,” pseudonymous NFT market analyzer NFTstatistics.eth told Cointelegraph.

Related: OpenSea top-10 NFT projects soar as new liquidity enters the market

The data from Nonfungible shows a spike on May 1 with the number of sales and active wallets that day hitting numbers not seen in their data from November 8 2021 directly correlating with the record-breaking (and Ethereum breaking) Otherside metaverse land sale by Yuga Labs again contradicting the claim that NFT sales are “flatlining.”

It’s not clear why the Nonfungible data the WSJ relied on is misaligned with Dune’s data, however it could be due to the inclusion of sales volume from P2E gameAxie Infinity by Nonfungible.

Volume for the popular play-to-earn hit an all-time high of over $40 million on November 4 2021 before a gradual decline to its current levels of around $500,000 according to CryptoSlam data.

But the collapse in popularity of a P2E game as NFTstatistics.eth says “is an extremely different message from ‘NFTs are collapsing.’”

While the current debate focuses on Ethereum NFTs, Solana is fast becoming a popular blockchain for this type of asset and is the second-largest blockchain behind Ethereum for NFT sales volume.

Last week, the Solana NFT project Okay Bears topped OpenSea’s 24-hour sales tracker for the first time, and holds fourth place behind the Mutant Ape Yacht Club in 7 day sales volume on CryptoSlam with over $47 million worth transacted.

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Bolt Acquires Wyre for $1.5 Billion, Firm Aims to ‘Decentralize Commerce’

Bolt Acquires Wyre for .5 Billion, Firm Aims to ‘Decentralize Commerce’On Thursday, the payments and checkout and shopper network, Bolt has announced the firm plans to acquire the digital currency provider Wyre in a $1.5 billion deal. Bolt has explained the acquisition is aimed at bolstering cryptocurrency services and “the opportunity of Web3.” Payments and Checkout Firm Bolt Acquires Wyre The e-commerce platform Bolt has […]

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Wall Street Journal Reporter Chastised Over Satoshi Nakamoto ‘Unmasking’ Editorial

Wall Street Journal Reporter Chastised Over Satoshi Nakamoto ‘Unmasking’ EditorialDuring the last week, mainstream media outlets have been publishing reports that say “Bitcoin’s creator Satoshi Nakamoto could be unmasked at [a] Florida trial.” Alongside this, the name “Satoshi Nakamoto” has been trending in people’s discussions on social media for the last few days as well. The Internet Is Buzzing Over Conversations Concerning Bitcoin’s Mysterious […]

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