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FTX exchange news – who FTX may be dragged down: potential victims of cryptocurrency crash

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FTX exchange news – the exchange is facing a massive withdrawal of funds. Chinese journalist Colin Wu drew attention to suspicious schemes to replenish the cryptocurrency’s balance. FTX began receiving large amounts of assets from third-party platforms, including Circle, instead of the classic transfers from its main vault, a cold cryptocurrency wallet. 

On the morning of November 10, amid Binance’s refusal to buy a competitor, the media reported that the crypto-exchange is facing an $8 billion financial hole if it fails to raise funding. According to some reports, the founder of the crypto exchange Sam Bankman-Fried, who owes creditors $650 million, has already filed for bankruptcy.

Who could fall victim to FTX

The connection to FTX and Alameda amid the conflict could play a cruel trick on the crypto industry. We tell you which projects are at risk of falling into a new “funnel of death”.

FTX and Alameda recipients

One of the first victims of FTX is the crypto project Solana. The cryptocurrency exchange and its founder have personally backed the platform on numerous occasions. Now that FTX has weakened, Solana’s funding streams and affiliated initiatives may weaken.

Projects that have received investment from FTX and Alameda

Huobi has also turned its attention to Alameda’s crypto portfolio. Previously reported, why did crypto exchange Binance exit FTX. Against the backdrop of worsening conflict with Binance, market participants suggested that the company will sell its reserves. In this case, cryptocurrencies from its portfolio may be under attack.

The list of potential victims of FTX and Alameda’s “funnel of death” is also at risk of being added to the companies’ investors. For example, the crypto exchange received funding from Sequoia Capital. Against this backdrop, company representatives ironically noted that the FTX crisis turned their investments into $0.

According to CrunchBase, the crypto-exchange received funding from 44 investors. The list included:

  • Insight Partners Venture Company.
  • Lightspeed Venture Partners.
  • Paradigm Investment Company.
  • IVP Venture Company.
  • Temasek Holdings Investment Company.
  • Blackstone Group Investment Company.
  • New Enterprise Associates Venture Company.
  • Softbank Vision Fund Venture Capital Fund.
  • Tiger Global Management, an investment company.

FTX has also received funding from private investors. For example, in 2021, popular Japanese tennis player Naomi Osaka invested in the crypto exchange.

FTX investors include Binance, among others. The crypto-exchange invested in a competitor in 2019. In 2021, Binance sold its stake in FTX for $2.1 billion.

In lieu of a bottom line

Binance’s conflict with FTX has put many in the crypto industry and investors who were once unlucky enough to get involved with Sam Bankman-Fried’s companies at risk. Amid the risk of liquidation of the exchange’s assets, the crypto market went into a slump. One of the first to suffer were projects that are in one way or another associated with FTX or Alameda.

Market participants believe that the collapse of FTX will leave a “giant hole” in the industry. We can assume that into it, as it was in the case with Terra, will begin to “fall” weak projects, as well as those who used to be affiliated with the companies of Sam Bankman-Fried.

We previously reported that the FTT Token was falling, as LUNA once did. Binance Coin (BNB) is more stable.

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Poloniex rolled back support for stablecoins on Binance Smart Chain (BNB Chain)

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Crypto exchange Poloniex (one of the key investors of which is the creator of the ecosystem TRON Justin Sun) stopped supporting stablecoins on Binance Smart Chain (today – BNB Chain). Poloniex tech support announced this in a tweet.

Tech support later deleted the tweet, but it is still viewable on the websites that linked to it. When trying to open an announcement about the termination of support for Binance Smart Chain stablecoin, the exchange’s website takes you to an authorization form.

According to the saved copy of the announcement, the exchange stopped supporting USDT, USDC, TUSD and BUSD based on the BEP20 protocol back on November 24. However, support for other BNB Chain-based tokens remained in place.

The exchange said that it stops not only deposits but also withdrawals of stablecoins on BEP20, but is ready to convert assets to their counterpart on other networks: Ethereum (ERC20) or TRON (TRC20). It is not clear what exactly caused the change. At the same time, Poloniex representatives on Telegram ignore users’ questions about the reasons for stablecoin support stopping on BEP20, but note that users can still deposit tokens on BEP20.

Earlier, we reported that MakerDAO will exclude renBTC from DAI stablecoin reserves due to the drop in renBTC price.

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Binance Launches Proof-of-Reserves System

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Binance has released a Proof-of-Reserves system based on Merkle Tree, an algorithm for verifying crypto exchange reserves. The Proof-of-Reserves system proves that the company holds user funds in full. When a user deposits one bitcoin, the exchange’s reserves increase by one bitcoin in real time, proving the transparency of balances and the safety of funds.

The first version of Proof-of-Reserves is available for bitcoin (BTC). Similar functionality will soon be available for ETH, USDT, USDC, BUSD and BNB. Binance will also bring in an independent third-party auditor to verify the data.

“Given recent events, it is clear that the community will demand more from crypto exchanges than what is currently required of traditional financial institutions. That’s why we are excited to provide our users with this newest feature to verify crypto exchange reserves,” said Binance CEO Changpeng Zhao.

He added that Binance’s community is larger than that of any other crypto exchange. Therefore, it will take several weeks to get data for most assets.

“We are working to get the next update out as quickly as possible. As much as possible to meet community expectations,” Zhao noted.

Right now, users can check funds in two ways: through the Binance website or by copying the source code into a Python application and cross-referencing.

Also, the ZK-SNARK tool will soon be introduced, providing privacy and simplicity for confirming reserves. The service will help audit users’ balances and confirm that they have assets to cover collateral.

Earlier, we reported that New York City restricted the cryptocurrency mining business.

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Polkadot offers money for fighting crypto fraudsters

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Blockchain project Polkadot has launched Anti-Scam Bounty, an anti-crypto fraudsters program to improve the security of its ecosystem. As part of the new program, Polkadot will pay users cash rewards for helping them fight crypto fraudsters.

Users are required to find fraudulent websites, fake social media profiles and phishing apps that masquerade as Polkadot. They also need to protect Discord servers from hacker attacks. The tasks include creating training materials for users, as well as developing a special Anti-Scam toolbar to protect against fraud in the company’s ecosystem.

“Decentralizing anti-cryptocurrency scammer list efforts and moving them online is no easy task, mainly because most of the anti-scamming happens in Web2,” Polkadot said in a statement.

Each task is overseen by members of the Polkadot community. They will interact with implementers and suggest their own initiatives to better achieve results. Users will receive USD Coin (USDC) awards for helping to fight fraud. The program is now run by three mentors from the Polkadot community and two employees from the Web3 Foundation.

“The threat to Polkadot’s brand development is real, but that’s not our only concern. We don’t want Polkadot to be a free ecosystem. We want it to be a secure ecosystem where users don’t have to constantly worry about getting caught and scammers should think twice before casting their nets,” Polkadot said.

Polkadot concluded by reaching out to scammers, promising that they will have a tough time in the ecosystem.

“So pack your bags and go for it. Or better yet, get a job and stop stealing from people!” the authors of the release concluded.

We previously reported on why the collapse of FTX won’t kill the crypto industry.

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