Ankr defi project exploited for over $5 million

The BNB Chain-based Ankr defi protocol suffered an exploit of their aBNB token. "We are currently working with exchanges to immediately halt trading," they wrote. However, the attacker had already bridged and tumbled at least $5 million in funds from the exploit before the announcement was even made.

Early analysis by PeckShield suggested that the contract had an unlimited mint bug, allowing arbitrary minting of aBNB tokens. The attacker, and possible subsequent copycat attackers, used this flaw to mint quadrillions of aBNB, which they then traded to various other tokens.

Auros misses loan payment due to FTX exposure

Crypto trading firm Auros missed a payment on its 2,400 wETH (~$3 million) loan from the Maple defi lending project. According to M11 Credit, the operator of the credit pool from which Auros has taken the loan, this was due to "a short-term liquidity issue as a result of the FTX insolvency".

In total, Auros has 8,400 wETH (~$10.7 million) and $7.5 million in USDC in loans from M11 credit pools, plus another $2.4 million in loans from the Clearpool defi lending project, for a total of more than $20 million in unsecured loans.

Kraken pays over $360,000 to settle violations of sanctions against Iran

The US cryptocurrency exchange Kraken settled charges from the Office of Foreign Assets Control (OFAC) alleging that they had violated sanctions against Iran. In the agreement, Kraken will pay $362,158.70 for the potential civil liability, and agree to commit $100,000 in various compliance controls.

The OFAC investigation was first revealed in July, in reporting from the New York Times.

Kraken lays off 1,100 employees in 30% cut

The US cryptocurrency exchange Kraken announced that it had laid off 30% of its employees, or about 1,100 people. They blamed "macroeconomic and geopolitical factors" resulting in less trading and fewer clients. "Unfortunately, negative influences on the financial markets have continued and we have exhausted preferable options for bringing costs in line with demand," they wrote.

Block subsidiary TBD announces they will trademark "Web5", cancels plans after completely foreseeable backlash

TBD is a subsidiary of Block (formerly Square), a tech company co-founded by billionaire social media mogul and Twitter founder Jack Dorsey. In July, they unveiled the concept of "Web5", which they define an "extra decentralized web platform".

Who could have predicted that people might balk when TBD then announced they would try to trademark the term? Apparently they saw no irony in their attempt as a single, powerful entity to gain control over the trademark.

The same was not true of the people who responded to the post, who wrote things like, "We need to make sure web 5 is truly open by copyrighting it", and simply "🤡🤡🤡🤡🤡".

Six hours later, the company tweeted, "we have heard the community and we are responding to their concerns". They issued a statement acknowledging that "we have heard loud voices in the community who are concerned about the potential for abuse of trademark law in ways that would undermine the mission of decentralization." Gee, you think?

And no, they still haven't explained what happened to web4.

BlockFi files for bankruptcy

Crypto lending firm BlockFi has filed for Chapter 11 bankruptcy in the wake of the FTX collapse. The company was in dire straits in the spring after Terra and Three Arrows Capital blow-ups, but was bailed out in June by a $250 million loan from FTX, followed by a deal giving BlockFi a $400 million credit facility and giving FTX the "option to acquire" BlockFi.

Because of this dependency, it was no surprise when BlockFi announced they were once again in crisis following the FTX explosion. On November 15, the Wall Street Journal reported they were preparing for possible bankruptcy and considering layoffs.

On November 28, BlockFi filed for bankruptcy. Their filing estimates they have more than 100,000 creditors (the maximum option on the form), between $1–10 billion in assets, and between $1–10 billion in liabilities.

Shitcoin project tests the limits of cringe by building $600,000 statue of Elon Musk and delivering it to Tesla HQ

A large silver statue of Elon Musk's head, atop a rocket shaped structure. The sculpture is on the back of a flatbed truck.Elon Musk statue (attribution)
A shitcoin project desperate for the kind of pump that sometimes occurs when Elon Musk tweets about a cryptocurrency has gone to new lengths to get his attention. The group spent $600,000 and six months on a six-ton statue that's supposed to be Elon Musk's head on a rocket ship, but looks rather like a giant Elon Musk caterpillar.

The group then delivered the sculpture to Tesla HQ in Austin, Texas, and is reportedly refusing to leave until he accepts the statue. Unfortunately he may be too busy burning Twitter to the ground to have noticed.

Despite receiving press coverage in outlets including the Wall Street Journal, Fox Business, and USA Today, the project has as of yet failed to achieve much of a pump, and the token is trading around where it was several months ago. I've not named the token here in the hopes of not contributing to the goals of their viral marketing stunt.

150 companies seek Binance's bailout for organizations "facing significant, short term, financial difficulties"

On November 14, CZ of Binance announced an "industry recovery fund", which he said would devote money to ending "further cascading negative effects of FTX [and] help projects who are otherwise strong, but in a liquidity crisis".

In a blog post outlining the $1 billion initiative, Binance also divulged that "we have already received around 150 applications from companies seeking support under the [Industry Recovery Initiative]"—only a week and a half after it was announced.

Lemon Cash crypto exchange lays off almost 40% of its staff

The Argentinean cryptocurrency exchange Lemon Cash announced that they had laid off 38% of their employees, or around 100 people. The CEO blamed the international crypto environment, as well as a "recessionary period" in startup investments. He also urged that the announcement was not related to the FTX collapse, and explained that although the company had user funds stored with FTX, they withdrew them prior to FTX halting withdrawals.

Lemon had closed a $44.1 million series A funding round earlier this year, which they kicked off in July 2021.

Users unable to withdraw from CoinList due to protracted "technical difficulties"

Beginning in mid-November, users of the CoinList exchange and ICO platform reported that they couldn't withdraw assets from the platform. On November 24, CoinList tweeted, "There is a lot of FUD going around that we would like to address head on. CoinList is not insolvent, illiquid, or near bankruptcy. We are experiencing technical issues that are affecting deposits and withdrawals." This was not entirely reassuring, given the number of companies in the crypto industry who have announced they were just fine before being revealed to be deeply underwater.

CoinList lost $35 million in the June Three Arrows blowup. Shortly after the FTX collapse, CoinList claimed to have "no material exposure to FTX, FTT, Alameda or any credit exposure to any affiliate of FTX". However, they stopped processing withdrawals shortly after.

Iris Energy defaults on $100 million+ loan, unplugs miners

After announcing earlier in the month that they were close to defaulting on a $100 million+ loan, Iris Energy has defaulted. Unable to pay the $7 million/month in debt obligations with their $2 million/month gross profit, Iris Energy has powered off 3.6 EH/s worth of mining capacity.

Iris Energy's stock has plummeted to $1.66, down 93% from its $24.80 peak when the stock first began trading a year ago.

New York institutes two-year ban on new crypto-mining operations at fossil fuel plants

An aerial photo of a power plant, with trees and a lake in the backgroundGreenidge Generation in upstate New York (attribution)
Governor Kathy Hochul signed legislation to ban for two years the issuance of permits to new crypto-mining operations at fossil fuel plants. This seeks to cut down on the enormous energy costs of proof-of-work crypto-mining used for cryptocurrencies such as Bitcoin.

New York has been the home of some battles against crypto-miners who have set up shop at dormant fossil fuel plants. The Greenidge Bitcoin mining operation near Seneca Lake has been the locus of some particularly bitter battles against the industry: a dormant coal power plant that was converted to natural gas and devoted to Bitcoin mining in 2019, its permit renewals have been the focus of fierce protests. It will not be affected by this particular legislation, which only bans mining operations who have not already submitted applications for new or renewed permits.

Genesis warns of bankruptcy if it can't raise $1 billion

Genesis Global Trading has reportedly been telling investors that Genesis may need to file for bankruptcy if its attempts to raise at least $1 billion in new capital don't succeed. The firm revealed its exposure to FTX last week, halting withdrawals from its lending service and acknowledging that its derivatives arm has $175 million in funds locked in the bankrupt exchange.

The Wall Street Journal then reported that Genesis had been seeking a $1 billion emergency loan due to a "liquidity crunch due to certain illiquid assets on its balance sheet".

The halting of withdrawals from Genesis' lending business has already had major downstream impacts, as it is a major partner of other crypto lending services. Gemini and Coinhouse both followed Genesis in suspending withdrawals, as did other firms including Donut and GOPAX.

A Genesis bankruptcy would be a monumental event in crypto, with enormous downstream exposure.

Grayscale Bitcoin Trust suffers due to FTX collapse and doubts over reserves

Chart showing the premium/discount of the GBTC fund. The fund started at a premium of over 60% in 2017, and traded at a premium before crossing into a discount in early 2021. The discount has continued to grow since, and has recently dipped to 45%GBTC discount or premium (attribution)
Grayscale Bitcoin Trust (GBTC), the largest publicly traded crypto fund, hit record lows in the wake of the FTX collapse. The fund was trading at nearly a 50% discount on the underlying Bitcoin asset, as holders rushed to sell off their GBTC holdings.

This was not helped by Grayscale's response to those in crypto who were pushing Grayscale to follow suit with some other crypto platforms and publish proof of reserves. Grayscale announced that "due to security concerns, we do not make such on-chain wallet information and confirmation information publicly available through a cryptographic Proof-of-Reserve, or other advanced cryptographic accounting procedure". They did not elaborate on what these "security concerns" might be, and stoked fears in some that the company might not have the backing they ought to have.

Grayscale published a letter from Coinbase that basically said "we have Grayscale's assets, we promise", which did not seem to assuage the fears that have formed around centralized entities promising they have the assets they claim. This is understandable, given that FTX made similar promises, only to collapse.

Coinhouse suspends "savings accounts" due to Genesis suspension due to FTX collapse

The French crypto broker Coinhouse announced that they would be suspending withdrawals from their crypto "savings account" product. Coinhouse partners with Genesis to offer the service, and Genesis recently suspended their service due to the FTX collapse. As a result, services that relied on Genesis, including Gemini and now Coinhouse, are halting their own services as the dominoes continue to fall.

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 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.

Class action lawsuit filed against celebrities who promoted FTX

Larry David, Tom Brady, Gisele Bundchen, and Steph CurryLarry David, Tom Brady, Gisele Bundchen, and Steph Curry all promoted FTX (attribution)
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 BĂĽndchen, 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

A concert poster for Coachella 2015, featuring a bird with intricate feathers walking through a patch of plants and circus rides in a desertCoachella: Desert NFT (attribution)
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".