ooooFTT! Crazy week is an understatement given the collapse of FTX (driven by its FTT token and other misgivings mainly from CEO and wunderkind, Sam Bankman-Fried/SBF. This has a lot of folks questioning the viability of this space but we've also seen misogynistic attacks at others involved in the fiasco that just don't paint anyone in a good light here. As much as this highlights the issues with centralised control (FTX is a centralised exchange), we shouldn't think that DeFi is without issues either. A lack of controls/audits means code can go bad too.
It takes times like this to bring people together and to get beyond the aftermath, we need to figure out a plan forward. I see many good people wanting us to run away from centralisation and regulation (even though they're not the same) and I see many others wanting full and total control of this space. Let's not be black and white as these are moments when we can get the best of both worlds.
Anyway, let's go over our week and recap the FTX debacle in the news section. Welcome to another week in crypto!
We kicked things off with a Twitter space mainly about regulations and the whole SBF vs CZ (aka FTX vs Binance) war of words that kicked this whole thing off. For all those out there who might be feeling the pinch from what's happened, we've setup a dedicated channel to help the community so if that's something you need then you can join us on Discord here (https://discord.com/invite/3bGRvn9DVw) or feel free to connect with me here.
We had our regular Twitter Spaces event which was full of the regulars as we chatted about the above, Aptos, our prior week of events, and other things we are working on. Replay of that is below
Then later that night we listened in on the NFT Fest Twitter Spaces event and you can check out that replay here -
We also have to highlight the massive Twitter Space run by @marionawfal on Saturday night that ran for 10 hours (and many more Spaces over the weekend wading through the aftermath)
No doubt this will continue and we’ll go through some of it tomorrow in our own Spaces event you can join here
NEWS
We started off with hte CZ vs SBF debate in the news and the latter was still fresh out of being in the news for other wrong reasons being on the receiving end of Vitalik and Erik Voorhees arguments against his ideas of regulation in this space. More on the debate in detail here from The Deep Dive crew - https://thedeepdive.ca/the-cz-sbf-twitter-feud-explained/
Then on Tuesday night/Wednesday morning Sydney time, we saw news that FTX did indeed have liquidity issues and was looking to have Binance bail it out. There’s a lot of comments all over the news about this but let’s take a look at the original tweets, firstly from SBF -
and the response from CZ -
As of Wednesday afternoon, the FTX price had pushed down to just above $5 with no downward end in sight. DigitalX, the local asset manager, was in the news as they had also sold out of their FTT holdings along with many others - https://www.afr.com/technology/aussie-crypto-fund-sells-on-ftx-solvency-rumours-20221108-p5bwlr
A great analytical breakdown of the collapse comes from Glassnode
Another breakdown here in this twitter thread
The aftermath of the first few days last week was finding out who was exposed and who wasn't. From rumours of El Salvador crypto holdings all being on FTX to finance celebrities being called out for preaching the good word on FTX
It also didn’t take long for TradFi media to jump on with their views such as this crypto being divided take from the Financial Times - https://www.ft.com/content/b2b60629-953c-4fd8-bebf-2a0c78ecfe4b?accessToken=zwAAAYRjzv77kdOytgYplTxP2NO-vyoMeOz-Sw.MEUCIQCND61praMa8HREH0pw7tNVkc8ydKrvIrvwhoq2z-FW2AIgXrZVxicI4uBwodFLV6GfJUhZNbNgX5eRrNqD_XHMUuQ&sharetype=gift&token=38c4f92d-cb5b-4ee5-9f8a-8944d3f55215
There’s knock on effects as well including seeing the potential for SEC chairmen Gary Gensler’s actions being put under scrutiny
Bahamanian residents came out winners in some ways here given with this crisis creating an opportunity
We also have tweets like this showing the movement of funds (across wallets) by SBF back in September not aging well (look at the comments) -
So with all the above (and more) it's hard not to look at this SBF apology and think, too little, too late…
Elsewhere in the news, Ethereum went ultra-sound as the markets tumbled. NFT Sydney’s John Siderides had a good piece out on LinkedIn about it here: https://www.linkedin.com/feed/update/urn:li:activity:6995916159480983552/
In other major news (relatively), the US Justice Department announced the seizure of $3.36 billion of crypto connected with fraud on the Silk Road Dark Web. The $3.36 billion of crypto was valued at the time of the arrest in November 2021 so it’s certainly worth much less now but check out the full details here https://www.justice.gov/usao-sdny/pr/us-attorney-announces-historic-336-billion-cryptocurrency-seizure-and-conviction
In local news we saw that the couple accused of using a mistaken $10m transfer from Crypto.com awaiting trial in Victoria - they’ve both pleaded not guilty but are unlikely to see proceedings start until next year - https://www.news.com.au/finance/money/wealth/man-woman-accused-of-splurging-more-than-10m-in-mistakenly-transferred-crypto-on-houses-luxury-items/news-story/523694186c04a11eae1a5e6927f8f973
Moon DAO in the news with this video showing the result of their sponsoring of space research. In it we see a member of the famous trick shot group, Dude Perfect head up into the stratosphere and beyond
Data
FTX all over the news meant a lot of charts/data being shared and frankly, it’s all that appears to matter right new so let’s take a look at a few of these
FTX Wallet Transfers
On FTX NFT marketplace being used to help offload funds
FTX Corporate Entity Chart
There’s also this entity chart showing the Alameda and FTX Ventures Portfolio
And this on the various FTX outbound transactions -https://dune.com/crypto_oracle/ftxalameda-run-fork
A tangled web, reminiscent of Lehman Brothers. We'll continue to see the fallout of this over the next few weeks so stay tuned.