Kategorie: Crypto Markets

• The FTX token has declined more than 76% in the past two weeks and is down 98% from its all-time high.
• Yet, it’s still higher than its all-time low reached in 2019 and has about $418 in market cap.

FTX was seen as one of the best cryptocurrency exchanges in the world until its collapse stunned the crypto industry. 

Just to sum up what happened, FTX’s bankruptcy filing has shown that pretty much everything that hit the exchange has to do with the failings and crimes by founder Sam Bankman-Fried.

FTX token decline not as spectacular as LUNA

Despite the FTX implosion and the fact that millions of people are likely to have lost all their money, the FTX token hasn’t gone to zero yet. In fact, FTT still trades around the same price levels as when it hit the market following its launch.

The FTX token was launched on 8 May, 2019 and reached an all-time high of $85.02 on 9 September 2021. At current levels, to which the token slumped following last month’s FTX implosion, FTT is more than 98% down on its all-time peak.

So what’s happened? Everything, but the demise of the FTX token that hasn’t happened as spectacularly as what occurred with Terra (LUNA) in May 2022.

As seen on CoinGecko, FTT is trading near $1.28 – about 11% higher than its all-time low of $1.15 hit on 6 September 2019. The FTX token ROI is at nearly 28%,  

And with its market cap still above $410 despite the FTX bankruptcy and all that’s been revealed about the formerly ‘SBF empire’, it’s pretty easy to say that FTX may be ‘dead’- but FTT is not there yet. Over $10 million worth of FTT was traded in the past 24 hours.

Just for context, Terra Classic (LUNC), the Terra token that went to zero in May, still sees action with more than $115 million worth of trades in the past 24 hours.

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Djed, Cardano’s over-collateralized algorithmic stablecoin, will be live on mainnet in January 2023 following a successful full audit. The scheduled launch is a great milestone coming days after Shahaf Bar-Geffen’s announcement about the stablecoin on the main stage at the Cardano Summit.

Making the announcement, COTI’s CEO Shahaf Bar-Geffen said:

“Djed going to public mainnet is a great achievement, following a lot of hard work from IOG and COTI. Recent market events have proven again that we need a safe haven from volatility, and Djed will serve as this safe haven in the Cardano network. Not only do we need a stablecoin, but we need one that is decentralized, and has on-chain proof of reserves. Djed is just that and I see it becoming the top stablecoin on the Cardano network, considering all of the integration partnerships already signed for it.”

Cardano remains prudent as the launch approaches

Following the Terra LUNA crash that resulted from the de-pegging of their native algorithmic stablecoin Terra USD (UST), Cardano has assured investors that they have been very prudent in the way they approach the release of their stablecoin. One of the things that they have had to do is ensure that a thorough audit took place besides other rigorous stress tests before the stablecoin is launched on the mainnet.

Cardano has also said that it will adopt a gradual and slow approach to providing ADA liquidity to the Djed smart contract. This will allow Cardano to pace themselves and carefully grow the stablecoin.

Once the Djed is launched, it will be integrated with select top Cardano partners to allow for more use cases.

Djed stablecoin features

Djed ($DJED) is an over-collateralized algorithmic stablecoin, built on Cardano and powered by COTI. It will be pegged to USD and backed by ADA.

It will use SHEN as its reserve coin.

$DJED’s algorithm is based on a collateral ratio within the range of 400%-800% for $DJED and $SHEN in order to ensure there’s enough $ADA in the pool.

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According to court documents filed on Sunday at the US Bankruptcy Court for the District of Delaware ahead of the first hearing on Tuesday, John Ray who is the seasoned expert brought in to tidy up the wreck of the collapsed FTX is billing $1,300 per hour. The first hearing is aimed at shedding more light on the insolvency proceedings.

The documents further show that the restructuring experts are seeking to go ahead with paying the wages of the senior staff at the collapsed exchange despite a freeze on its funds and lack of a clear record of who is owed what by the exchange.

Continued payment of salaries

About 1 million creditors including crypto users may have their funds locked up in FTX after the exchange collapsed leading to a freeze on its funds.

But even then, Edgar Mosley, the managing director of the restructuring consultancy firm, Alvarez & Marsal hired to clean up the mess, has maintained that continued payment of salaries will help preserve resources and value of FTX’s estate.

Edgar Mosley in his filling said:

“Continued payment of salaries is necessary for the preservation of the resources and value of the FTX estate. Without it, I believe that even more employees may seek alternative employment opportunities … likely, diminishing stakeholder confidence in the Debtors’ ability to successfully reorganize.”

Edgar insisted that the payments made to CEO Ray and also the $975 hourly billing of Chief Administration Officer Kathryn Schultea, Chief Information Officer Raj Perubhatla, and Chief Financial Officer Mary Cilia are important in maintaining and administering what remains of the company as it tries to repay its debts.

According to the court filing, non-employee directors hired for proper governance during the insolvency process will earn a fee of $50,000 per month. They shall also be entitled to some other allowances.

Though the fees seem to catch the attention of the general public, the fees are a drop of water into the ocean in the pricey world of corporate restructuring. Ray’s total fees only account for a fraction of the total amount of money that the $3.1 billion that the FTX allegedly owes to its principal creditors.

Lastly, Mosley also recommended that FTX should go ahead and pay an extra $17.5 million to its critical contractors, especially those that will ensure the security of the crypto assets is maintained to avoid hacking and stealing of the assets.

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• FTX has engaged US-based firm Perella Weinberg Partners LP as its lead investment bank to help with the sale or reorganisation of subsidiaries.

FTX Trading is set to review all of the bankrupt cryptocurrency exchange’s assets around the globe, the team handling the collapsed company’s bankruptcy process said Saturday.

According to a press release FTX.com and about 101 affiliate companies, collectively the “FTX Debtors”, are rolling out a strategic review of all of the collapsed company’s global assets.

FTX review shows some subsidiaries are solvent

The exercise is part of the broader Chapter 11 process, the companies noted in the announcement, with the objective being to maximise asset recovery and to offer as much value as possible to FTX stakeholders.

These were the sentiments of John J. Ray III, the new Chief Executive Officer of FTX.

Ray is a prominent bankruptcy lawyer who took over from Sam Bankman-Fried as CEO last week. He noted in a statement published Saturday that the review will take note of the fact that some of FTX’s subsidiaries are solvent.

“Based on our review over the past week, we are pleased to learn that many regulated or licensed subsidiaries of FTX, within and outside of the United States, have solvent balance sheets, responsible management and valuable franchises,” Ray said.

As such, some affiliated companies like LedgerX, (which FTX acquired in 2021) and Embed Clearing, part of FTX’s acquisition spree in 2022, are not debtors. However, others like the Japanese crypto exchange Liquid and FTX Turkey are part of the bankruptcy cases as debtors.

FTX has engaged Perella Weinberg Partners LP as its lead investment bank as it looks to sell some businesses and reorganise others.  FTX’s engagement with the investment banking advisor is, however, pending approval by the Court.

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• Bybit’s largest asset wallet holdings total $1.9 billion, according to details from blockchain analytics firm Nansen.

Bybit has become the latest crypto exchange to publish information about its assets reserves, as calls for more transparency in the industry increase following FTX’s collapse.

On 16 November, Bybit announced it was revealing the user asset wallets, with portfolio data shared by blockchain analytics platform Nansen showing total assets were around $1.9 billion. 

According to the Nansen dashboard, Bybit’s largest reserve wallets are in Bitcoin, Tether (USDT), Ethereum (ETH), and USD Coin (USDC).

As well as releasing the wallet addresses of its largest users, Bybit founder and CEO Ben Zhou said the exchange was working on proof of reserves solutions.

“We are also exploring new custody solutions to allow users to view their own balance on chain or 3rd party custody. Bybit guarantees 1:1 reserves for all users and we made sure during this special period all users withdrawals are processed in a timely manner,” Zhou tweeted.

As CoinJournal highlighted a few days ago, Zhou believes the whole crypto industry has an obligation to “do right” by customers. 

Bybit’s announcement of their wallet reserves sees it join other exchanges in providing some measure of transparency at a time the industry is reeling from the FTX implosion. A spreadsheet compilation by crypto journalist Colin Wu shows Bybit has joined crypto exchanges such as Binance, OKX, KuCoin, Bitfinex and Huobi in this initiative.

Huobi and Bybit announced their cold wallet reserves. At present, among the major exchanges, only @gate_io @MEXC_Global @bitgetglobal have not announced their cold wallet addresses and 100% user reserves. https://t.co/6zrQbEe5wG https://t.co/eOJg9f3ssE pic.twitter.com/MmOs73HwGG

— Wu Blockchain (@WuBlockchain) November 16, 2022

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