FTX Contagion Spreads: BlockFi Files for Bankruptcy
DAR Crypto Weekly: 9 December 2022
SUMMARY / KEY INSIGHTS
- Market Performance: The broader digital asset market rose as the prices of BTC and ETH moved upward and trade at around $17,000 and $1,260, respectively, at the time of this writing.
- Newsmakers: A prominent crypto lender, Genesis, owes more than $1.8 billion to creditors, including ~$900 million to Gemini’s clients.
- Taxonomy: Ankr, a Decentralized finance (DeFi) protocol, said that it will compensate users affected by a $5 million exploit on its platform.
- Events Calendar: Trader Joe, an Avalanche-based DEX, announced plans for “multi-chain” expansion, starting with Arbitrum One in early January 2023.
- Regulatory Developments: Lawmakers in Brazil took a significant step toward regulating cryptocurrency and the Central Bank of Indonesia released a whitepaper on its digital currency.
MARKET PERFORMANCE
The performance of the broader digital asset market has been relatively flat as the total industry market capitalization stagnated around $850 billion. In the past week, BTC and ETH went over $17,000 and $1,250, respectively.
BlockFi, a cryptocurrency lending platform, reportedly filed for Chapter 11 bankruptcy, after being affected by the FTX collapse. The company disclosed in the filing that it had more than 100,000 creditors, with the difference between its liabilities and assets ranging from $1 billion to $10 billion. Additionally, the company reported an outstanding loan to FTX US for $275 million.
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NEWSMAKERS
Genesis owes $900 million to Gemini’s customers
Crypto lender Genesis, and its parent company, Digital Currency Group (DCG), reportedly owe ~$900 million to Gemini’s customers. Gemini’s Earn product allowed customers to earn up to 8% in interest by lending their cryptocurrencies to Genesis. Genesis halted withdrawals, causing Gemini Earn’s funds to be stuck. Since then, Gemini’s daily trading volume has been decreasing, which is a trend that aligns with the broader digital asset market. The total number that Genesis owes to its creditors currently stands at ~$1.8 billion.
TAXONOMY
ANKR to Reimburse Users Due to the Exploitation
Ankr, a BNB Chain-based decentralized finance (DeFi) protocol, confirmed that it was the victim of a multi-million dollar exploit on 1 December 2022 and said that it will reimburse impacted users. According to reports, an attacker successfully minted 20 trillion Ankr Reward Bearing Staked BNB (aBNBc), which is a reward-bearing token for BNB that has been staked on the protocol.
Decentralized Finance is one of the DATS Themes.
The Digital Asset Taxonomy System (DATS), developed in partnership with the Wilshire Digital Assets Advisory Group, was designed from the bottom up to capture the nuances of the digital landscape. To learn more about the different classifications of more than 1,300 digital assets, click here.
EVENTS CALENDAR
Trader Joe Will Be Deployed on Arbitrum in January 2023
Trader Joe, a DeF protocol, announced its first expansion beyond the Avalanche network with plans to launch on Arbitrum One in January 2023. Trader Joe’s total value locked (TVL) and user activity experienced a significant decrease during the third quarter of 2022. Trader Joe’s TVL went down by ~23% in the third quarter and ended the quarter at approximately $140 million. On the other hand, the total value locked (TVL) on the Arbitrum network has climbed by more than $300 million over the past several months, and the ecosystem now holds slightly more than $1 billion. The expansion move is part of Trader Joe’s overall strategy to enter new markets and increase user activity.
To learn more about the comprehensive listing of critical events and updates impacting leading digital assets and blockchains, check out DAR’s events calendar product here.
REGULATORY DEVELOPMENTS
Brazil Approves a Law That Authorizes Using Crypto as a Payment Method
The Brazilian Chamber of Deputies recently approved a regulatory framework that would allow cryptocurrency to be used as a form of payment in the country. Although this is a step forward for crypto in Brazil, the bill still needs to be signed by the president of Brazil for it to be enacted. If enacted, the measure will expand the definition of payment methods to include digital currencies and air miles programs. These payment methods will continue to be within the purview of the nation’s central bank.
Indonesia Announced a Proposal to Adopt a Digital Rupiah
Amidst a surge in the use of digital transactions across Indonesia, the country’s central bank has revealed a whitepaper on digital rupiah. At a recent press conference, Governor of the Bank Indonesia (BI) Perry Warjiyo stated that the bank would be the only State agency authorized to issue digital rupiah. The digital currency will use a technology platform that is interoperable with digital currencies issued by other central banks. The usage of cryptocurrencies in Indonesia as a payment method is not permitted now; nevertheless, transactions involving digital assets can take place on the commodity futures market for investment.
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