ASX will write off the AU$245–$255 million (US$164–$170M) they have poured into the project, and start again on designing a replacement for the CHESS system.
Australian Securities Exchange scraps its $167 million, seven-year-long blockchain project
The Australian Securities Exchange (ASX) has finally pulled the plug on their project that would have replaced the aging CHESS system that is used for transfer and settlement. The group had spent seven years and AU$250 million (US$167 million) on a private blockchain project, which has suffered repeated delays and setbacks. A recent, third-party report by Accenture on the project estimated that it was only 63% complete, and was excessively complex, "including in the way ASX requirements interact with the application and underlying ledger". The project has grappled with issues including lack of throughput to settle trades.
- "ASX kills its blockchain project, will write off $250 million", Financial Review
Class action lawsuit filed against celebrities who promoted FTX
A class action lawsuit has been filed against Sam Bankman-Fried and a slew of celebrities who helped to promote FTX as a safe place to hold and trade crypto. Defendants include Tom Brady, Gisele Bündchen, Steph
Curry, Shaquille O'Neal, David Ortiz, Naomi Osaka, and Larry David.
The suit alleges that the celebrities violated the anti-touting provisions of securities laws by failing to disclose the nature, scope, and amount they were compensated to promote the platform.
Nigerian startup Nestcoin has nearly all funds locked in FTX, announces layoffs
Nestcoin, a Nigerian startup that both builds and invests products they hope will "democratis[e] access to economic opportunity for everyday people in frontier markets", has announced that they will lay off more than 50% of their nearly 100 employees. Remaining employees will see their pay slashed by 40%, and the company CEO plans to take no compensation at all.
Nestcoin had nearly all of the funds remaining from their $6.45 million funding round locked in FTX — approximately $4 million.
Gemini halts withdrawals from their lending service
The Gemini cryptocurrency platform announced that they would be pausing withdrawals on their lending platform. This is because they partner closely with Genesis' lending products, which halted withdrawals shortly before.
The company said in a blog post that they were "working with the Genesis team" to restore withdrawals. Like Genesis, they tried to urge that the issue would not affect other Gemini products. However, a service outage that same day did little to strengthen trust in the company.
Genesis crypto lending service halts withdrawals
The crypto lending portion of Genesis Global Trading announced they would be halting withdrawals in the wake of the "extreme market dislocation and loss of industry confidence caused by the FTX implosion". On Twitter, they wrote that "FTX has created unprecedented market turmoil, resulting in abnormal withdrawal requests which have exceeded our current liquidity."
They urged in their announcement that the decision would not impact their trading or custody businesses — though if I was a user of their other services I might not be feeling so reassured given crypto companies' poor track record of segregating operations.
Genesis has about $2.8 billion in total active loans as of the end of September 2022.
This is not the first crisis for Genesis this year. The firm lost hundreds of millions due to exposure to the Three Arrows Capital collapse, and in August announced layoffs of 20% of their employees.
Coachella NFTs stop working due to FTX collapse
Coachella partnered with FTX to sell a collection of NFTs in February, ultimately raking in around $1.5 million. The NFTs were paired with physical items — Coachella passes, art prints, and photo books — and the NFT owners had the option to "redeem" their NFT to receive the item. However, all of this was done through FTX, and with FTX no longer fully operational, redemptions are no longer possible. The FTX server storing the artwork for the NFTs was also intermittently available, so holders reported seeing broken images when going to view their NFT.
Ten of the NFTs in the collection came with lifetime passes to Coachella, and sold for six figures. Each year, the NFT holder has to go through the redemption process to obtain their festival pass.
Many of the token owners bought their NFTs with FTX and simply left them in their accounts on the platform. Some were able to transfer their tokens before FTX's NFT platform stopped operating, but many did not.
Australian crypto exchange Digital Surge suspends withdrawals
The Brisbane-based cryptocurrency exchange Digital Surge announced that they would be suspending deposits and withdrawals. "Due to the impact of FTX Australia's administration, we are not able to operate business as usual and have suspended all deposits and withdrawals until further notice," they wrote. They also disclosed in an email that they had "some limited exposure to FTX".
- "Aust crypto exchange suspends withdrawals", Shepparton News
BlockFi plans layoffs, possible bankruptcy after FTX collapse
Cryptocurrency lending company BlockFi suspended withdrawals on November 10 after the FTX collapse, an expected move since they had stayed afloat after the previous crypto meltdown only thanks to hundreds of millions in loans from FTX.
Now, the Wall Street Journal reports that BlockFi has been considering layoffs, and has been in talks with bankruptcy attorneys about a possible Chapter 11 filing.
Although BlockFi disputed reports that they had been custodying client assets at FTX, they acknowledged that they had "significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US".
- "BlockFi Prepares for Potential Bankruptcy as Crypto Contagion Spreads", The Wall Street Journal
SALT crypto lender halts their service
The crypto lending firm SALT announced that they would be halting withdrawals due to exposure to FTX. "I am sorry to report that the collapse of FTX has impacted our business," they wrote in a message to users. "Until we are able to determine the extent of this impact with specific details that we feel confident are factually accurate, we have paused deposits and withdrawals on the SALT platform effective immediately."
Binance announces an "industry recovery fund"
CZ of Binance announced on Twitter that Binance would be forming an "industry recovery fund", which he says is intended for projects that are "otherwise strong, but in a liquidity crisis".
This not entirely unlike someone trying to sell you a house that is "otherwise sturdy, but in an engulfed-in-flames crisis".
He says the project is intended to reduce the "cascading negative effects of FTX", underscoring how nervous this whole debacle is making other players in the industry.