CryptoSlate Wrapped Daily: SBF faces investor lawsuit in the US as Australia suspends FTX operations; LFG spent $2.8B on UST peg defense CryptoSlate Wrapped Daily: SBF faces investor lawsuit in the US as Australia suspends FTX operations; LFG spent $2.8B on UST peg defense
Gemini exchange experience outage as it suspends withdrawals on Earn program, Messari estimate shows that FTX users may recover up to 50% of funds, and much more in this edition of CryptoSlate Wrapped Daily.
4 min read
Updated: Sep. 20, 2023 at 1:40 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The biggest news in the cryptoverse for Nov. 16 includes Gemini halting withdrawals on its Earn program, Coinbase saying it has zero exposure to Genesis Trading, and Messari estimating that FTX investors may get back up to 50% of their funds after bankruptcy process.
CryptoSlate Top Stories
Gemini Earn halts withdrawals due to โmarket turmoilโ caused by FTX fallout
The ripple effect of the FTX collapse has forced U.S.-based crypto exchange Gemini to pause withdrawals on its Earn program. According to Gemini, its lending partner Genesis Global is no longer able to process customer redemption due to an increasing liquidity crisis.
However, Gemini claimed that only the Earns program was affected, as it maintains a full reserve for customers’ funds for other products and services.
Gemini down due to Amazon Web Services EBS outage; exchange working on restoring functions
Earlier on Nov. 16, trading services on Gemini were halted. The crypto exchange claimed it had experienced an Amazon Web Services outage which affected its database and exchange operations.
According to Gemini’s status page, wire transfers are still unavailable, however, the exchange claims that customers’ funds are safe.
Coinbase says it has no exposure to Genesis, touts โstrong capital positionโ
Following Genesis’ insolvency issues due to the FTX collapse, Coinbase said it has no exposure to Genesis. Coinbase reportedly holds $1.5 billion of its capital on Chainlink and the other as Bitcoins.
Nexo says โreal time auditโ error caused by technical malfunction, will be fixed soon
Crypto lending platform Nexo has a real-time audit function (Armanino) that displays its total assets and liabilities condition per day. Unfortunately, the audit was not updated as expected on Nov. 16, which sparked rumors that the company may be facing insolvency.
However, a Nexo representative told CryptoSlate that the audit delay was due to a technical malfunction in Armanino’s design. Nexo confirmed that the team was working to resolve the error and automate the audit attestation to function as normal.
Audit reveals Luna Foundation Guard spent $2.8B to defend UST peg in May
Terra Luna’s audit report published by JS Held revealed that the Luna Foundation Guard and Terraform Labs spent about $2.8 billion and $613 million respectively, to defend the UST peg.
The Luna Foundation said that the audit report confirmed that the funds were not embezzled as rumors had it. Do Kwon added that Terra’s failure is different from that of FTX, where the operators misused customers’ funds.
SolChicksNFT CEO, COO leaked messages confirm up to $20M treasury fund loss
On-chain sleuth ZachXBT called out SolChicksNFT CEO and COO for failing to inform the community about a $20 million treasury fund loss due to exposure to the collapsed UST.
In response, COO Lewis Grafton said it had disclosed the loss to its largest private holders. His response didn’t go down well with ZachXBT who took the selective disclosure as a discriminatory act against retail investors.
Messari estimates up to 50% of FTX user funds recoverable
Messari Research Analyst Kunal Goel leveraged data from Financial Times to estimate that users who lost money to the FTX collapse may receive up to 50% of their funds when the bankruptcy process is over.
According to the balance sheet breakdown, FTX’s total assets and liabilities stand at $4,109 million and $8,859 million respectively, bringing the ratio of total assets to customers deposit to equal 0.49 (approximately 50%).
DeFi protocol Oxygen held 95% of supply on FTX
Solana-based prime brokerage platform Oxygen Protocol is on the verge of collapse as a significant portion of its ecosystem liquidity is trapped on FTX.
Oxygen confirmed that it held 95% of itsย MAPSย andย OXY tokens on the bankrupt crypto exchange.
Bitfarms sold more Bitcoin than it mined in Q3
According to Bitfarmsโ third-quarterย report, the bitcoin mining firm mined 1,515 BTC over the period. However, it sold about 2,595 BTC to pay off some of its debts.
An investigation by mining analyst Jaran Mellerud revealed that Bitfarm’s total bitcoin holdings of 2,064, is about 141% of its loan. In the event that BTC’s price fell below $14,200, Mellerud fears that Bitfarm’s loan could be liquidated, which may threaten its continual operation.
US financial committee to hold hearing on FTX collapse in December
The United States House Committee on Financial Services has called on Sam Bankman-Fried, Alameda Research, Binance, FTX, and related entities to deliberate on the FTX collapse and its consequences for the whole crypto ecosystem.
The committee added that it will work to hold bad actors accountable so that responsible players can build a more inclusive financial system.
FTX collapse: 3AC co-founder Kyle Davies says โweโre looking forward to justiceโ
Co-founder of bankrupt Three Arrows Capital (3AC) Kyle Davies showed up on CNBC to say that the FTX empire contributed to 3AC’s collapse. Davies claimed that Alameda had counter-traded and liquidated 3AC’s position.
Davis added that Sam Bankman-Fried knew about the ill deals, but chose to conceal a lot of things. However, the 3AC founder said his company is looking forward to justice.
News from around the Cryptoverse
FTX Australia suspended
The Australian Securities and Investments Commission (ASIC) has moved to suspend FTX’s operation in the region. The commission said that it will withdraw FTX’s AFC license by Dec. 19, 2022.
Binance secures license in Abu Dhabi
Binance has received the financial service permission (FSP) license to offer its crypto services to clients in Abu Dhabi.
In a similar development, Binance CZ confirmed that his exchange has signed 8 new investment deals for some crypto projects.
Sam Bankman-Fried sued in US court
Former FTX founder Sam Bankman-Fried has been sued by investors who claim that the exchange’s yield-bearing crypto accounts violated Florida laws, according to Reuters.
Crypto Market
In the last 24 hours,ย Bitcoin (BTC) decreased by 1.49%ย to trade at $16,576, while Ethereum (ETH) declined by 3.38% to trade at $1,210.
Biggest Gainers (24h)
- Secret (SCRT): +28.77%
- DFI.Money (YFII): +13.64%
- Aptos (APT): +11.19%
Biggest Losers (24h)
- FTX Token (FTT): -15.07%
- Hashflow (HFT):ย -8.19%
- Braintrust (BTRST): -6.81%
Mentioned in this article
Bitcoin 
Ethereum 
Secret 
DFI.Money 
Aptos 
FTX Token 
Hashflow 
Braintrust 
FTX 
Binance 
Nexo 
Coinbase 
Gemini 
Three Arrows Capital 
Sam Bankman-Fried 
Changpeng Zhao Posted In: Wrapped
Author 
Christian Nwobodo
Christian is a crypto-curious nerd who loves to investigate how protocols work under the hood. Christian is interested in DeFi protocol research, token economics, and on-chain analytics.
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In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Ethereum
$3,346.26
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
DFI.Money
$348.877
DFI.Money (previously known as YFII) is a DeFi platform which aims to build products on aggregated liquidity provision, leveraged trading, automated marketing making.
Aptos
$12.1622
Aptos is an FTX-backed layer-1 blockchain which was developed by ex-Meta employees.
FTX Token
$2.08288
FTX is a cryptocurrency derivatives exchange that offers futures, leveraged tokens and OTC trading.
Hashflow
$0.20001
Hashflow is a decentralized exchange designed for interoperability, zero slippage, and MEV-protected trades.
Braintrust
$0.33852
Braintrust is the first decentralized talent network that connects skilled, vetted knowledge workers with the worldโs leading companies.
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Binance
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.
Nexo
Nexo is a leading global financial institution specializing in digital asset services, particularly focusing on cryptocurrency lending, exchange, and financial management solutions.
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Gemini
Gemini is a regulated digital asset exchange and custodian that allows customers to buy, sell, store, and stake digital assets in a regulated, secure, and compliant manner.
Three Arrows Capital
Three Arrows Capital (3AC), a Singapore-based crypto hedge fund, collapsed due to poor risk management, recklessness in dealing with business partners and a significant portion of greed.
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.
Changpeng Zhao, popularly known as “CZ,” is a notable figure in the cryptocurrency world, primarily for founding and leading Binance, the world’s leading cryptocurrency exchange by trading volume.