Crypto Guides, Knowledge & Insights

FTX exchange crash: A lesson for all Nigerian crypto traders

By: Damian Okonkwo　　Traders lose money as FTX exchange files for Bankruptcy 　　The crypto market has suffered what appears to be the greatest blow in its history with the crash of the second largest crypto exchange which saw over $200Billion wiped out of the crypto market in less than 12hrs after the news. Over 5 million users trading on the exchange including Nigerian crypto traders have been unable to access and withdraw their funds from the exchange after the founder of the FTX exchange - Sam Bankman-Fried filed for bankruptcy protection under Chapter 11 of the US laws and resigned his position as the CEO of the exchange.　　The current crash of the FTX exchange has exposed the vulnerability of using the Centralized exchange for crypto trading which in itself goes against the purpose of cryptocurrency when it was first created. It has further exposed the risk involved in cryptocurrency trading where the traders capital is always at risk and he stands the chance of losing his whole investment should either the project or exchange he is dealing with crash in the future.　　What are the lessons to learn from the FTX exchange crash today？　　The major lesson every crypto trader must learn from

2022-11-14Deep Dive

FTX’s bankruptcy rippled through the sports world. Steven Curry and other celebrities take a hit.

Nov 14- FTX, its affiliated crypto trading fund Alameda Research and about 130 other companies entered voluntary bankruptcy proceedings last Friday. As the brand ambassador of FTX, the NBA superstar Steven Curry has taken a hit because of the FTX collapse.　　Curry is currently working for the Golden State Warriors of the NBA. This NBA legend reached a partnership with FTX in September 2021 and became a global ambassador for the company. The epic collapse of FTX even entangled his non-profit organization “Eat. Learn. Play”. Earlier this year, Curry starred in a commercial ad for FTX in which he proudly claimed that he didnt need to be an expert to trade and sell cryptocurrencies on the FTX platform. Curry also appeared as a brand ambassador on FTXs website the day before the firm filed for bankruptcy.　　FTX is very focused on marketing in the sports world and many sports stars have partnerships with FTX. In addition to Curry, famous tennis star Naomi Osaka was given an equity stake. Another NBA legend Shaquille ONeal has cooperation with this crypto exchange as well.　　Bankman-Fried stepped down from his CEO position as FTX filed for Chapter 11 bankruptcy, after scrambling to shore up an $8 billion

2022-11-14Deep Dive

Binance US, Coinbase, Curve in Bidding War for BlockFi Credit Card Customers

Blockworks has learnt that Binance US and Coinbase are among the bidders for the BlockFi credit card program and its related clients, while smaller fintech competition Curve is also interested in the approximately 87,500 BlockFi accounts.　　BlockFi banned withdrawals on Thursday, November 12, citing a “lack of clarity” on the evolving situation at FTX and Alameda Research, both of which have now initiated bankruptcy proceedings.　　Several Twitter users have reported that their BlockFi cards have ceased operating in the last 24 hours.　　BlockFi is thought to have a $800 million hole in its balance sheet and is not thought to be significantly involved in the negotiations to buy its card assets.　　According to a source close to the situation, a settlement is expected within 72 hours, adding that the majority of the ongoing negotiations over the sale of the BlockFi card assets are being done by the fintech servicing firm Deserve, which manages the BlockFi program. The issuing bank is Evolve Bank s website lists ten coins for which it provides crypto prizes.　　In an emailed statement, they stated, “What distinguishes our bid is that Curve is not a centralized exchange and has no intention of becoming one.” We offer a cryptocurrency rewards credit card

2022-11-13Deep Dive

Bahamas Securities Commission neither “authorized” nor condones FTX enabling local withdrawals

In a press release issued on November 12, the Securities Commission of The Bahamas (SCB) refuted FTXs announcement about restarting withdrawals in The Bahamas.　　Zane Tackett, the former head of institutional sales at FTX, declared on Twitter on November 11 that the exchange would allow withdrawals for Bahamian clients. Tackett stated in the statement that the withdrawals were permitted in accordance with regulations.　　As a result, a huge number of FTX users attempted to route payments through Bahamians. Some even offered bribes to FTX personnel in order to shift their country to The Bahamas and assist in the withdrawal of monies.　　The SCB, on the other hand, stated that the regulator had not “ordered, permitted, or urged” that FTX prioritize local withdrawals.　　In reality, according to the SCB press release:　　“The Committee also observes that such transactions may be classified as voidable preferences under the insolvency framework, resulting in the clawback of monies from Bahamian clients.”　　In other words, the regulator said unequivocally that FTX withdrawals for Bahamian clients may be deemed void and hence overturned. The regulator also stated unequivocally that it does not “condone” preferential treatment of any FTX consumers.

2022-11-13Deep Dive

Breaking News: The FTX Group Declared Bankruptcy in the United States

Due to a liquidity crisis at the FTX Group that has prompted intervention from regulators around the world, this famous Crypto exchange announces bankruptcy filing in the United States and the 30-year-old chief executive Sam Bankman-Fried, whose wealth was estimated by Forbes at around $17 billion just two months ago , will resign.　　(Sam Bankman-Fried, CEO of FTX )　　Before that, FTX Group has been struggling to raise billions of dollars to avoid bankruptcy while facing increased regulatory scrutiny.　　FTX, its affiliated crypto trading fund Alameda Research and about 130 other companies have initiated Chapter 11 voluntary bankruptcy proceedings in Delaware, the company said in a statement shared via Twitter on November 11, 2022.　　(10:14 PM, Nov 11, 2022, FTX group released a statement on Twitter about its bankruptcy. See below.)　　At this moment, John J Ray III has been appointed CEO of the group. And Bankman-Fried has resigned but will assist with an orderly transition.　　According to some report, this event has hit an already struggling bitcoin and other tokens. Bitcoin fell below $17,000 at this time.　　As many clients ask for withdrawals, FXT was scrambling to raise about $9.4 billion from investors and rivals.

2022-11-12Deep Dive

Based on favorable CPI figures, Bitcoin accelerates.

RevenueSharks, a platform for marketplace and cryptocurrency education, tweeted:　　“Bitcoin has an easy path back to $20k as Stocks pushing up and positive CPI numbers.”　　As per CoinMarketCap, Bitcoin increased by 3.78% over the previous 24 hours to reach $17,281 throughout intraday trade. 　　Because the CPI increase in October was 0.4%, the smallest increase until January 2022, it was less than anticipated. According to the U.S. Bureau of Labor Statistics　　“The all items index increased 7.7 percent for the 12 months ending October, this was the smallest 12-month increase since the period ending January 2022. The all items less food and energy index rose 6.3 percent over the last 12 months … all of these increases were smaller than for the period ending September.”　　　　The Federal Reserve (Fed) may lessen interest rate increases, which have been harmful to the crypto economy, as a result of the lower CPI data, which led to a constructive reaction in the BTC market. 　　One of the main things preventing cryptocurrencies from taking off significantly is the Feds 75 basis point (bps) increase in interest rates.　　The cryptocurrency market is still in trouble despite the rising CPI statistics because bulls are still biting. Material Indicators, a source of market intelligence,

2022-11-11Deep Dive

BlockFi stops transactions in response to the FTX issue.

Due to uncertainty surrounding the current state of FTX, the company tweeted that withdrawals and ordinary business activities have been put on hold.　　BlockFi, a related brokerage firm also under Sam Bankman-ownership, Frieds announced late Thursday on its Twitter profile that it had become the most recent victim of FTXs abrupt collapse: “We are shocked and dismayed by the news regarding FTX and Alameda,” 　　BlockFi, which is currently facing financial difficulties, had a $3 million valuation previously. The business tweeted that platform activity would be restricted for the immediate being and that customer withdrawals would be prohibited: “as is allowed under our terms.”　　　　BlockFi has not given a specific date for the return of its services. 　　However, the cryptocurrency borrower revealed through Twitter that ACH transfers and “wire transactions scheduled for 11/11 will not proceed until 11/14.”　　Following sharp drops in cryptocurrency prices that affected numerous lenders in July, the troubled cryptocurrency lender experienced a liquidity crisis.　　With FTX.US, the cryptocurrency lender arranged a $680 million agreement that includes a $400 million lending capacity and an alternative for FTX to acquire BlockFi. 　　The cryptocurrency lender had requested funding in June at a decreased value of roughly $1 billion, down from its initial estimate of

2022-11-11Deep Dive

During the investors' scramble for safety, billions of dollars leave exchanges.

As a result of the FTX collapse having a cascade effect over the overall market, top tokens at the commencement of the month have now seen their prices plummet and valuations plummet. 　　Traders have decided not to put themselves in the crossfire by removing their money from all brokerage firms due to the uncertainty surrounding the sustainability of the FTX Derivatives Exchange and the businesses that may have access to it.　　Over the previous 24 hours, Ethereum valued or more $1 billion has been removed from exchanges, as per information from of the crypto analytics site Nansen. The top five assets that have been removed from trading systems are wETH, the three top stablecoins USDT, USDC, and BUSD, as well as other prominent altcoins.　　　　With FTXs demise and the potential for the trading platform to become stuck if Binances proposal does not ultimately go through, traders in the Web3.0 ecosystem are in a panic.　　Many traders have taken the decision to transfer their assets into a wallet they control in an effort to avoid similar eventualities to those saw in the cases of loans like Voyager Digital and Celsius Network that declared bankruptcy incarcerating investors assets to date.　　Traders want to be able to

2022-11-10Deep Dive

Binance pulls out of the proposed takeover of FTX

Because of FTXs improper handling of customer funds, among other factors, Binance on Twitter said the cryptocurrency exchange would cease the purchase plans. 　　The biggest cryptocurrency exchange in the world, Binance, was the initial investor in FTX.　　Binance tweeted: “As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com,” 　　　　Before the cancellations, Binance had planned to help the users of the US-based cryptocurrency exchange by offering liquidity. However, the business has said that FTXs problems include “beyond our control or ability to help.”　　Potential for bankruptcy？　　Binance has not given specifics regarding the problems FTX is experiencing. Nevertheless, according to press sources, the crypto exchange may have found a significant discrepancy between FTXs $6 billion worth of liabilities and assets. 　　Additionally, according to Bloomberg, which obtained this data from a source with firsthand knowledge of the situation, FTX CEO Sam Bankman-Fried warned investors that the cryptocurrency exchange would have to declare bankruptcy if it didnt get a capital infusion. 　　　　Bankman-Fried, who was reportedly valued at $26 billion, also told them that his cryptocurrency exchange could run out

2022-11-10Deep Dive

BaFin Asks Coinbase’s Internal Organization for an Improvement

The Federal Financial Supervisory Authority (BaFin) announced on Tuesday that the crypto exchange‘s German branch violates the German Banking Act, i.e.. the sections that require the maintenance of high risk-bearing capacity, the steady operation of emergency management mechanisms, and adequate staffing practices. Deficiencies in Coinbase’s annual crypto finances audit statements have become the reason for BaFin to order Coinbase to provide a “proper business organization” model. Coinbase has officially confirmed that the company will cooperate to its fullest extent on these issues. Additionally, Coinbase claims that it has devised a “remediation plan” that will address all the audit concerns raised by BaFin.　　It also announced that its crypto-based activities would be moved out of the US exchanges and into the international market, including Europe and Singapore, which recently granted the exchange a license to operate. A BaFin license was just granted last year.　　Coinbase is headquartered in California and is one of the largest cryptocurrency exchanges on the global scene. However, recently the exchange has been impacted by the stagnation of the crypto market. The company reportedly lost $1 billion in the second quarter of 2022, and $545 million in the third. Its revenue also dropped to $576 million in the third

2022-11-10Deep Dive

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