BlockFi and several of its affiliates have filed for Chapter 11 bankruptcy protection. In related news, BlockFi also filed a lawsuit against Sam Bankman-Fried to seize his $575 million stake in Robinhood.

With reference to certain loan documents, it was revealed that Robinhood shares held by FTX pledged to utilize BlockFi as collateral. This development happened shortly after BlockFi had filed for bankruptcy.

The company reportedly has more than $256 million in cash on hand, which should be enough to support certain operations during the restructuring process.

BlockFi has over 100,000 creditors and assets and liabilities ranging from $1 billion to $10 billion. Ankura Trust Company, LLC is among the major creditors named in the petition.

As stated in the petition, the company's unsecured claim is worth approximately $729 million. West Realm Shires, also known as FTX.US, and the SEC have unsecured claims in the amount of $275 million and $30 million, respectively.

Mark Renzi, the company's financial advisor, stated that following the failure of FTX, the BlockFi management team and board of directors acted quickly to protect both the company and its clients.

BlockFi previously admitted to having significant exposure to FTX and its associated corporate entities, including obligations owed to BlockFi. They additionally have assets on the platform and an undrawn line of credit with FTX.

Financial difficulties at FTX are rapidly spreading to other crypto companies as well. Gemini and Genesis are two notable firms that have been impacted by the bankrupt cryptocurrency exchange. Larry Fink, CEO of BlackRock, also confirmed that the asset manager had lost $24 million which it had invested in FTX.

On November 24th, MetaMask developer ConsenSys revised its privacy policy to begin tracking MetaMask users IP addresses as well as Ethereum addresses whenever they send a transaction. The update is for MetaMask customers who use Infura as their RPC (Remote Procedure Call) provider. Infura is a ConsenSys affiliate and the default RPC provider for all MetaMask wallets.

In related news, ConsenSys successfully generated $450 million in a series D round earlier this year, valuing the company at $7 billion which ranks it among the biggest players in the cryptocurrency sector.

Important details

MetaMask and Infura are both owned by ConsenSys. Infura manages blockchain nodes for wallets and individuals. When users make a blockchain transaction using their MetaMask wallet, the transaction is broadcasted to the Ethereum blockchain by Infura. Additionally, MetaMask communicates with Infura via a RPC.

Essentially, the update informs users that if they switch their RPCs to another provider, ConsenSys will not collect their data. They will, however, be subject to the information collection policy implemented by the RPC provider of their choice.

Moreover, according to the updated ConsenSys privacy policy, if the users choose Infura as their default RPC provider in MetaMask, Infura would collect their IP address as well as their Ethereum wallet address whenever a transaction is sent. Also, if users connect MetaMask to their own Ethereum node or a third party RPC provider, neither Infura nor MetaMask shall gather their IP address or Ethereum wallet address.

What comes next?

The decision by ConsenSys to gather user data was made shortly after the announcement by Uniswap wherein it was revealed that the decentralized exchange had begun collecting on-chain data via its users. The exchange stated that the main reason for this was to try and make decisions driven by and based on empirical data which could then significantly enhance user experience.

To that end, many companies collecting on-chain data, such as blockchain addresses and transactions, and off-chain data, such as IP addresses, are concerned that individuals could easily be identified and thus the amount of privacy available on the network would drastically decrease. Nonetheless, MetaMask Founder Dan Finlay stated on Twitter that he believes MetaMask does not use IP addresses, even if they are temporarily stored.

Binance plans to allocate $1 billion to a proposed industry recovery fund. It would later be revealed that an another $1 billion has also been added to this recovery amount, bringing the total to $2 billion.

Elsewhere, CEO Changpeng Zhao also revealed plans for Binance US to make a new bid for the assets of bankrupt crypto lending firm Voyager, which went bust after the Terra (LUNA) disaster.

The new recovery fund aims to provide financial assistance to projects with potential who find themselves in financial trouble following the recent collapse of FTX.

The Binance CEO stated that details pertaining to the fund would be published soon, and that it will adopt a relatively loose structure. Contributions via various other members of the crypto ecosystem are also welcome, Zhao added.

The fund will reportedly be open to the public, with contributors directed to a centralized, transparent blockchain address. Zhao indicated that the fund is scheduled to go live before the end of 2022, while also saying that we could see significant recovery occur within the next six months.

On November 23rd, a crypto wallet belonging to the defunct crypto exchange BTC-e transferred 10,000 Bitcoin to various exchanges, personal wallets, and other sources. For those who may not know, BTC-e was reportedly involved in the theft of Mt. Gox Bitcoin and user funds.

According to a Chainalysis report, although this is the biggest withdrawal made by BTC-e since April 2018, BTC-e and WEX both sent small quantities of Bitcoin to Russian electronic payments service Webmoney on October 26th. This was also done prior to making a test payment on November 11th, shortly after which a further 100 Bitcoin was transferred on November 21st.

Of the full sum sent, it is believed that 9,950 BTC are still in personal wallets, while the rest was routed through intermediaries before arriving at four deposit addresses in two major exchanges.

After spending over two years in limbo, JPMorgan Chases application for a trademark for a digital wallet with crypto features has finally been approved by the United States Patent Office.

As per the filing, the bank filed a trademark for the JP Morgan Wallet in July 2020, which was approved on November 15th, 2022. The trademark text indicates that the new wallet can be applied to online services such as crypto payment processing, electronic transfer of digital currencies via an online community, and the exchange of various virtual currencies.

It should also be mentioned that the trademark does not only cover crypto services, as it can additionally be used for other financial services such as virtual checking accounts, ACH payments, bill payments, and e-check processing.
 

Prominent cryptocurrency lender Genesis recently sought out a $1 billion emergency loan via investors before suspending withdrawals on its website, citing a confidential fundraising document. According to the document obtained, Genesis is experiencing a liquidity crunch as a result of certain illiquid assets on its balance sheet. The development comes shortly after the recent FTX disaster which has shattered confidence in the market, particularly regarding crypto exchanges.

What happened?

FTX filed for bankruptcy in the United States last week. Shortly afterwards, its founder, Sam Bankman-Fried, resigned as CEO, after rival exchange Binance backed out of a proposed acquisition even though CEO Changpeng Zhao had initially agreed to a non-binding letter of intent to acquire the exchange. Since then, the development quickly snowballed into what became one of the worst events in the history of this sector.

Amid the liquidity crunch caused by the FTX controversy, Genesis had been considering all possible options. The company also stated that it made the decision to temporarily suspend redemptions too. This decision was made due to the fact that the FTX collapse reverberated throughout the industry, limiting liquidity at firms with exposure to the crypto exchange and prompting regulators in several countries to launch investigations including both in the United States as well as in The Bahamas (where Sam and his team were operating).

What comes next?

As a result of the Genesis changes, Gemini exchange said it would halt withdrawals regarding its interest-bearing Earn accounts. Interestingly enough, Genesis is the programs lending partner.

In other news, BlockFi is reportedly preparing to file for Chapter 11 bankruptcy. The cryptocurrency lender had already suspended customer deposit withdrawals and admitted to having significant exposure to FTX along with its sister trading house, Alameda Research. Furthermore, BlockFi intends to lay off more employees as it prepares for a possible Chapter 11 filing, though the company stopped short of saying that the majority of its assets are held by FTX.

Ultimately, many believe that we have yet to see the full effect of the FTX collapse. Rather worryingly, FTX may very well have over one million creditors, indicating the massive impact of its collapse on crypto traders and the overall industry going forward, particularly in the context of regulations.

Elizabeth Holmes, the founder of Theranos, has been sentenced to more than 11 years in prison for defrauding investors in her blood testing startup, which was once valued at $9 billion. At one point in time, Holmes was dubbed the next Steve Jobs and was said to be the worlds youngest self made billionaire.

The former Silicon Valley star claimed falsely that the technology could diagnose different diseases with just a few drops of blood. After a three-month trial, she was found guilty in January. Holmes is expected to file an appeal against the sentence, which was handed down in a California court this past Friday.

The supposed revolutionary technology that Holmes promoted did not work, and Theranos was dissolved by 2018. Holmes was also accused of lying to the firms financial backers about its performance. Before Judge Edward Davila handed down his sentence, Holmes delivered a tearful apology to investors and patients.

On November 16th, popular crypto exchange Bybit made the addresses of its biggest crypto wallets public. This followed the collapse of FTX and industry calls for increased transparency. It was through a recent press release that Bybit had listed the addresses.

Blockchain analytics firm Nansen also created a dashboard of Bybits wallets, which is an indication that the exchanges assets total more than $1 billion in Bitcoin, USD Coin, Tether, and Ethereum. According to the press release, these assets account for more than 85% of the total crypto held by the exchange.

Following the FTX disaster, Binance CEO Changpeng Zhao has advocated for all exchanges to develop a proof-of-reserves protocol that will demonstrate to the community that their assets are equal to or greater than their liabilities.

As it does not provide a Merkle tree of the exchanges liabilities to customers, Bybits release of wallet addresses would not be considered as PoR. However, releasing the wallet addresses is a requirement for later creation of a proof of reserve, should Bybit choose to do so.
 

Coinbase has formally filed an amicus brief in support of Ripple Labs Inc. in the 2020 lawsuit filed by the Securities and Exchange Commission against Ripple.

The SEC filed the aforementioned lawsuit against Ripple and its executives approximately two years ago, alleging that the sale of XRP constituted an offering of unregistered securities worth over $1.38 billion.

To ensure that the existing due process guidelines on which the fair notice defense is based continue to protect against unauthorised regulatory enforcement when needed, Coinbase mentioned in the filing that the SECs motion for summary judgment on this issue should be denied.

According to Coinbase, government agencies cannot condemn conduct as a violation of the law unless fair notice is provided. Moreover, by suing sellers of XRP tokens after making public statements signaling that those transactions were lawful, Coinbase claims that the SEC has indeed lost sight of this bedrock principle.

The collapse of FTX highlighted the importance of proof of reserves in mitigating risks and increasing investor confidence, prompting leading cryptocurrency exchanges to publicly list their hot and cold wallet addresses.

When attempting to confirm the availability of funds on Crypto.com, cold store information disclosed a suspicious transfer of 320,000 ETH on October 21st to a wallet address linked to Gate.io.

Given that Crypto.com claims that all user-owned cryptocurrencies are held offline in cold storage in collaboration with hardware wallet provider Ledger, concerns were understandably raised about the issue.

As the debate heated up, CEO Kris Marszalek revealed that the funds, which accounted for 82% of Crypto.com's ETH in cold storage at the time, were indeed sent to Gate.io by mistake.

On-chain data verifies that Gate.io returned 285,000 ETH to Crypto.com, but Marszalek claims that all funds were restored. Further investigation revealed that the missing 35,000 ETH was sent to a different address, which the crypto exchange has yet to confirm.

Alarmingly, this is not the first time Crypto.com has made headlines due to an unintentional transfer. In August 2022, it was discovered that the company had sent over $7 million to Melbourne-based investors in error, despite the fact that the refund was supposed to be just $67.

After much back and forth, Binance initially signed a non-binding letter of intent to acquire FTX, adding a surprising twist to the public feud between the worlds two biggest cryptocurrency exchanges, which contributed to a drop in the value of several tokens across the market. However, while the firms agreed to not disclose the deals value until the due diligence process was completed, certain revelations have since led to Binance reportedly backing out of the deal.

What happened?

FTXs native exchange token, FTT, was the subject of controversy after the balance sheet of FTX sister company Alameda Research was revealed. This sparked a public spat between Alameda CEO Caroline Ellison and Binance CEO Changpeng Zhao, who also owns a large number of FTT tokens.

Taking note of the findings in a recent report, Zhao stated that his exchange would start liquidating any remaining FTT on its books. Ellison responded on Twitter, saying Alameda was ready to buy any amount of FTT Binance wanted to unload for $22 each. However, Zhao appeared to reject Ellisons offer, saying Binance would stay in the free market.

Binance and FTX would then clash after Changpeng Zhao tweeted that his exchange would gradually withdraw billions of dollars in FTT due to certain revelations that came to light. As speculation about the solvency of billionaire Sam Bankman-Frieds crypto exchange grew, the FTX CEO initially tweeted that everything in FTX is satisfactory and that the assets were fine.

He also stated that FTX has sufficient liquidity to cover all client holdings and that the company does not invest client funds. He concluded by saying that FTX always has and will continue to process all withdrawals. However, much to his supporters surprise, Sam would then agree to the aforementioned deal with Binance. Eventually though, Binance would then reverse their decision to acquire FTX which only made the situation even worse.

What comes next?

Binance was the first investor to back FTX, but as the younger firm's popularity grew, the relationship between the two firms began to deteriorate. Following the announcement of the acquisition, FTX CEO Sam Bankman-Fried thanked Binance CEO Changpeng Zhao as well the general crypto community for their patience and understanding. Now though, it remains unclear as to what will happen as the entire crypto community and market suffered heavy losses due to the ongoing fiasco.

SBF further indicated that this is a user-focused development which will benefit the entire industry, and that Binance has done and will continue to do a fantastic job of expanding the global crypto ecosystem and fostering a more free economic environment for everyone. Once again however, many have come to doubt anything Sam says after additional details about him and FTX have since surfaced.

Ultimately, whether this was a strategic move for Binance which will benefit them in the long run or a decision taken in the spur of the moment, the fact remains that the worlds largest crypto exchange can now forge ahead seemingly unchallenged as it looks to work alongside regulators across the world. However, many have condemned Changpeng Zhao by calling his actions extremely predatory and have even accused him of intentionally destroying his competition. Elsewhere, Sam Bankman-Frieds net worth decreased by over 90% in just one day, effectively putting an end to his otherwise meteoric rise in the industry.

Following a liquidity crisis and the Binance and FTX fiasco, Sam-Bankman-Frieds company has now initiated US bankruptcy proceedings with the CEO officially resigning.

FTX had been struggling to raise billions of dollars to avoid bankruptcy following a wave of withdrawals and after a potential rescue deal with larger rival Binance fell through within a day.

FTX and its affiliated crypto trading fund Alameda Research, as well as roughly 130 other companies, filed for voluntary Chapter 11 bankruptcy in Delaware on Friday, according to a statement shared via Twitter.

The groups CEO has been named John J Ray III. SBF will reportedly be helping out in order to ensure a smooth transition. The former CEO also indicated that the bankruptcy filing does not have to mean the end of the companies and that he is trying to stay optimistic.

FTX stated in its bankruptcy petition that it has $10 billion to $50 billion in assets, $10 billion to $50 billion in liabilities, and more than 100,000 creditors.

A few investors, including Sequoia and SoftBank, had already written off their FTX investments. SkyBridge Capitals founder, Anthony Scaramucci, said on Friday that the alternative investment firm is working to repurchase its FTX stake.