Cryptocurrency
FTX bankruptcy allowed to sell subsidiaries
Cryptocurrency exchange FTX bankruptcy received court permission to sell certain investment assets and subsidiaries. It was reported by The Block, citing court filings.
The U.S. Bankruptcy Court for the District of Delaware on Feb. 13 approved a motion authorizing the sale or transfer of certain assets of “relatively minimal value” compared to FTX’s overall asset base.
The court’s approval allows the sale or transfer of investments in private or public companies, including warrants, tokens and token warrants, stock, promissory notes, future ownership interests, and future token interests. The court also allowed the sale or transfer of subsidiaries and other related interests, including limited partnership interests in venture capital and other investment funds.
FTX collapse – what’s happening now?
According to the publication, FTX and Alameda Research have collectively spent about $5.3 billion on 473 investments through various subsidiaries. Meanwhile, the companies invested about $837 million in 32 investment funds, including Sequoia, Multicoin, and Kraken Ventures.
“The Debtors must notify the firms serving as legal counsel and lead financial advisor to the Official Committee (“Advisory Professionals”) and the U.S. Trustee at least once a week of the status of any potential sale or transfer of De Minimis Assets or Fund Assets, including receipt by the Debtors of any offers and conclusion or completion of any Sales with respect thereto,” the statement said.
To initiate the sale, the aggregate sale price of each asset must be less than or equal to $1 million and the “verified investment value,” which refers to the original amount paid by FTX to acquire or invest in the asset. must be less than or equal to $5 million, and the investees will have five days to file an objection to the sale. If there is no objection, the liquidators of FTX will proceed with the transaction without further court order.
FTX filed for bankruptcy and stopped customer withdrawals in November 2022. The platform was facing liquidity problems because founder Sam Bankman-Fried had arbitrarily used customer funds for questionable Alameda investments. A bankruptcy case is pending in the U.S., but it is still unclear how much assets can be recovered and when customers will be able to regain access to their investments.
Earlier, we reported that the SEC urged not to staking cryptocurrencies on exchanges.
Cryptotraders had a tough day: almost 68,000 positions were liquidated on exchanges in the last 24 hours, and the total volume of liquidations exceeded $257,000,000. All this happened against the news of the US Federal Reserve’s rate hike and another Securities and Exchange Commission regulatory action against cryptocurrencies.
Cryptotraders lost $132,000,000 in BTC
Bitcoin, Ethereum, and Ripple were the leaders in the number of forcibly closed positions. BTC liquidations totaled almost $132,000,000; Ethereum traders lost $51,000,000. XRP positions accounted for about $8,000,000 of liquidations. Bitmex exchange executed the largest order of $7.39,000,000.
Cryptocurrency market capitalization has declined 2% in the last 24 hours, but is still above the $1 trillion mark.
The weekly CoinShares report also recorded a massive outflow of funds for six consecutive weeks. During that period, nearly $500,000,000 was withdrawn from cryptocurrency platforms, with $113,000,000 coming from bitcoin. Analysts at the company believe the outflow is due to liquidity needs during the banking crisis rather than a negative outlook. The company mentions that a similar scenario was seen in March 2020 amid a COVID-19-induced panic.
Regulators continue to hunt the cryptobusiness
Another reason for the increased volatility in the market has been harsh action from U.S. regulators. Last night it became known that the U.S. Securities and Exchange Commission sued cryptomagnate Justin Sun, accusing him of fraud and market manipulation.
The SEC also issued a notice of wrongdoing against Coinbase, the largest U.S. cryptocurrency exchange. The securities regulator sued Coinbase Global Inc, for some of the products it offers.
We previously reported that Bitcoin (BTC) tests $28,000, but onchain metrics urge caution.
Employees of the cryptocurrency exchange Binance help clients from China to bypass compliance and verification. CNBC writes about it, citing hundreds of corporate emails from exchange employees on Discord and Telegram. It is reported that Binance has helped over 200,000 users register, bypassing its own security system. One case describes correspondence between a user from China and a Binance employee.
The employee under the pseudonym yaya.z suggested the user from China turn on a VPN, register as a Taiwanese resident and then return the location to China. Binance employees also advise customers not to use VPN services from the U.S., Hong Kong and Singapore, because the exchange does not provide services in those regions, writes CNBC. At the same time, Binance freely processes applications from U.S. email providers like Gmail or Outlook for registration.
The exchange even offers specialized mobile applications for customers from China. A CNBC reporter could download a special mobile application from Binance via email. At the same time, no VPN was needed to download the app, as the download was conducted through the domain of binance[.]com. It is also alleged that the exchange still verifies users with Chinese phone numbers.
An exchange spokesperson denied the existence of a special Chinese version of the mobile application. The exchange also added that it has improved the system to identify users from banned regions. CNBC notes that after providing evidence, Binance removed employee messages from corporate chats to circumvent KYC.
We previously reported that the Ethereum (ETH) price crossed the $1,800 mark, opening the way to $2,000.
The market remains in a bearish trend and bitcoin (BTC) will resume its fall and test $16,000. There are two reasons:
The first statement can be confirmed or disproved by a technical analysis of the cryptocurrency market, but there is not enough additional information for the second.
The market capitalization of altcoins (ALTCAP) does hold nearly $605 billion of resistance. Although ALTCAP has risen above it several times, it didn’t develop above this area.
However, the daily RSI has broken through the bearish divergence trendline (green line). Such a breakout often precedes significant reversals into a bullish trendline. As a result, ALTCAP will move higher towards the $680B resistance area. If not, ALTCAP could fall back to the $518B support area.
There are also those who argue that bitcoin will test the $10000-$11000 area because there is a CME price gap that needs to be filled. The gap refers to the difference between the closing price of bitcoin futures on the Chicago Mercantile Exchange (CME) on Friday and the opening price on the following Monday.
We previously reported that Hong Kong has allocated another $50,000,000 to the crypto industry.
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