November 23, 2022

The biggest crypto news and ideas of the day

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Hello and welcome to The Node. This is Daniel Kuhn and Xinyi Luo, here to take you through the latest in crypto news and why it matters. In today's newsletter:

In the news: FTX Bahamas liquidators greenlight bankruptcy case transfer to Delaware, New York governor imposes 2-year moratorium on PoW mining and CZ raises doubts about Coinbase and Grayscale before backtracking.
The Takeaway: What is an exchange token? David Z. Morris examines how the FTT token helped blow up FTX.

– D.K.

Today's must-reads

Top Shelf

Bahamas FTX Liquidators Agree to Transfer Bankruptcy Case to Delaware: Court-appointed liquidators overseeing collapsed crypto exchange FTX's assets in the Bahamas have agreed to transfer a related case they'd filed in New York to Delaware, where the company had already filed for bankruptcy protection.

Meanwhile, lawyers detailed the "abrupt and difficult" collapse of FTX in the exchange's first bankruptcy hearing on Tuesday, saying former CEO Sam Bankman-Fried ran the exchange like a "personal fiefdom" and a substantial amount of assets are missing.
Lastly, Bankman-Fried sent a letter to FTX employees detailing his side of the story and apologizing.

New York Imposes 2-Year Moratorium on New Crypto Miners: New York's Gov. Kathy Hochul signed a proof-of-work (PoW) cryptocurrency mining ban into law on Tuesday. Earlier this year, the New York State Senate and Assembly passed a bill targeting PoW mining, aiming to address some of the environmental concerns about cryptocurrencies.

Binance's CEO Sows Doubt in Crypto Rival Coinbase and Digital Asset Manager Grayscale – Then Backtracks: Binance CEO Changpeng "CZ" Zhao on Tuesday triggered a controversy by raising concerns over the financial health of Coinbase and Grayscale. CZ's deleted tweet added fuel to one of the biggest fears of the crypto market at present, which is that Grayscale, a CoinDesk sister company and operator of the biggest bitcoin trust, doesn't actually hold all the bitcoin it says it does.

"If you see FUD out there – remember, our financials are public (we're a public company)," Coinbase exchange CEO Brian Armstrong responded.
Meanwhile, Cathie Wood's Ark Investment Management bought 176,945 shares ($1.5 million) in Grayscale's Bitcoin Trust (GBTC) at a record discount to their net asset value on Monday as the crypto market slumped to a two-year low.

– D.K. and Xinyi Luo

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Putting the news into perspective

The Takeaway

What Is an Exchange Token?

David Z. Morris looks at how FTT helped blow up (and then blew up) Sam Bankman-Fried's crypto exchange FTX. What exactly is an exchange token? What purpose do they serve? And how do they benefit exchanges or users? Read the full article here.

Overheard on CoinDesk TV...

Sound Bites

"We've long encouraged self custody and we're going to continue to encourage it."

– Kraken's interim CEO Dave Ripley, on CoinDesk TV's "First Mover"

The news in a sentence

Headlines

Genesis Global Capital Has Hired Investment Bank Moelis to Explore Bankruptcy Options | Binance CEO Seeking Funds From Middle East Investors for Crypto Recovery Fund | US Senators Ask Fidelity to Reconsider Bitcoin 401(k) Offerings | Bank of Japan to Run CBDC Experiments With Country's Megabanks | El Salvador Proposes Digital Securities Bill, Paves Way for Bitcoin Bonds | Ethereum Name Service Selects Karpatkey DAO to Manage Its Endowment Fund | Binance US Steps Into National Politics With New Campaign PAC

What others are writing

Off-Chain Signals

Stablecoins Show Signs of Stabilizing After FTX Storm (The Defiant)
Was Tether at the center of Sam Bankman-Fried's empire? (Protos)
Harvard paper to central banks: Buy Bitcoin! (Politico)
Mango Market Hacker Loses Millions in Failed Aave Scheme (Decrypt)

Generation C hosts Avery Akkineni of Vayner 3 and Sam Ewen from CoinDesk share how brands and marketers are using Web3 to experiment and potentially transform their businesses. Tune in to explore how Fortune 500 companies and new start-ups alike are coming to the blockchain to generate attention, gain customers and create value for their bottom line and their communities. Listen now.

Building on Nine Years of Trust

For those who have been in crypto for a while now, this isn't their first winter. While crypto winters past and present have tumbled some of the most well known players in the industry, those who remain continue to adhere to core principles and build on the trust they've gained along the way.

Even if FTX fully collapses, crypto will continue to prevail and the future will be dependent on projects and companies like Huobi that continue to push for a more transparent, democratized financial system.

*This is sponsored content from Huobi.

The Chaser...