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Crypto Survived MtGox and it Will Survive FTX: Chainalysis

On Nov. 24, analytics firm Chainalysis made the Mt.Gox comparison as it was not the first time the crypto world has been shaken due to an exchange demise.

Mt.Gox was the first Bitcoin exchange, but it collapsed in February 2014. Crypto survived and thrived, and it will do so again despite all the mainstream media FUD.

The Japan-based exchange was hacked in early 2014, resulting in the loss of around 750K BTC, or 6% of the entire supply at the time.

Mt.Gox vs. FTX

When comparing the two, it should be noted that Mt.Gox had a larger market share than FTX, with 46% of exchange inflows compared to 13%.

Chainalysis said that objectively, Mt.Gox was a bigger industry player which is good because its collapse didn’t destroy crypto.

One difference is that Mt.Gox’s market share was in decline, whereas FTX’s was increasing. This may mean that the FTX collapse was a bigger psychological blow to confidence.

Furthermore, crypto services were limited to a handful of exchanges back in 2014, whereas it is much more diverse now, with DEXes capturing almost half of all exchange flows in late 2022.

Following the collapse eight years ago, on-chain transaction volume stagnated for around a year but soon returned and doubled pre-Mt.Gox levels. This time around, crypto investors have been moving assets off exchanges to self-custody.

“This comparison should give the industry optimism. Mt. Gox was a bigger part of the crypto ecosystem when it collapsed in 2014 compared to FTX now, and while the market impact was bad, it rebounded relatively quickly.”

Another factor was that SBF was considered one of the leading faces of crypto. But as traders and investors have painfully learned, putting all faith in a centralized system run by one person could turn out to be a really bad idea.

Furthermore, crypto has been diluted with lending and leverage, which compounds the house of cards effect if the collateral is questionable, which it was with FTX.

Chainalysis concluded that the crypto industry has survived worse than the fall of FTX, so there is “no reason it can’t bounce back from this, stronger than ever.”

Crypto Market Outlook

Since its bear cycle low earlier this week, total market capitalization has recovered by $44 billion. Markets are up 3% on the day, and the total cap is now $865 billion, however, this is still in deep bear territory.

Bitcoin prices had gained 2.3% to reach $16,564, and Ethereum was up 4.6%, trading at $1,184 at the time of writing.

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South Korea To Change Its Legal Framework To Better Control Crypto Projects

On the heels of the Terra LUNA meltdown and the bankruptcy of FTX, authorities from South Korea are proposing new amendments to the Digital Assets Bill seeking greater control over cryptocurrency exchanges.

Congressman Yoon Chang-Hyun is preparing an amendment to expand financial authorities’ control capabilities to prevent the repetition of events such as the FTX collapse.

According to local media outlet News 1, Chang-Hyun is proposing to grant more authority to the country’s Financial Services Commission and Financial Supervisory Service “in lieu of self-regulation” of cryptocurrency exchanges.

“Rep. Yoon Chang-Hyun of the People Power Party plans to propose a revision of the secure digital asset transactions bill at the first legislative review subcommittee of the National Assembly’s Political Affairs Committee held on the same day.”

South Korea Wants to Protect Investors from Another FTX-Like Crash

The new amendment to the Digital Assets Act calls for the mandatory separation of customer deposits. It also gives greater control to financial authorities against unfair trading practices.

This means that regulators will be able to supervise and inspect cryptocurrency projects and exchanges to protect investors from million-dollar losses such as those caused by Terra LUNA.

It is worth mentioning that South Korean prosecutors issued an arrest warrant in conjunction with Interpol to capture Do Kwon, Terra’s founder, who is still on the run —even though he denies it—  after being accused of fraud due to the collapse of the UST stablecoin.

This is not an isolated effort. Other regulators around the world have asked for more strict laws using Terra and FTX as examples. The United States is leading these efforts, setting hearings to understand the situation better.

Exchanges Won’t Be Able To Use Their Clients’ Money

Another significant amendment to the Digital Assets Law is that cryptocurrency trading platforms will not be able to arbitrarily seize their users’ deposits once they have been sent to a custodian institution, which happened with FTX and Alameda Research.

In addition, the new law eliminates the “self-regulatory” power of cryptocurrency exchanges to take “appropriate measures” in case of irregular fluctuations in the price or trading volume, passing the control of such activities into the hands of financial authorities.

Exchanges will now be required to immediately report any unfair activity to the Governor of the Financial Supervisory Service, who will be responsible for taking appropriate measures to prevent fraud, money laundering, or any other crime.

According to an unidentified National Assembly official, the amendment to the Act “was introduced to reflect on the FTX incident and prevent a recurrence.”

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Cathie Wood Reiterates Her $1 Million Bitcoin Bet

Despite the FTX meltdown and the consecutive decline of the cryptocurrency market, the Founder and CEO of Ark Invest – Cathie Wood – stands by her prediction that bitcoin will skyrocket to $1 million by 2030.

She also seems unfazed by the price crash of Grayscale’s Bitcoin Trust (GBTC) since her company purchased additional 176,945 shares.

BTC Bull Regardless of the Reality

The shocking collapse of the crypto exchange FTX deepened the problems in the crypto sector and vaporized much of the investor interest. Even the most optimistic industry participants believe it will take a long time for the market to get back on its feet, while others don’t see it happening at all.

Ark Invest’s Cathie Wood is not among that club. In a recent interview for Bloomberg, she doubled down on her forecast that bitcoin is headed toward $1 million per coin. In her view, such setbacks could be helpful as they show which are the valuable projects:

“Sometimes you need to go through a crisis to see the survivors. Bitcoin is coming out of this smelling like a rose.”

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Cathie Wood. Source: Bloomberg

Wood believes the only minus of the calamity is the reduced interest from major institutions. However, she thinks they will soon realize the merits of the primary cryptocurrency and embrace it. The enthusiasm toward BTC should return in the next couple of years, meaning it will tap its milestone by 2030, Ark Invest’s executive concluded.

She is also bullish on ether, saying it could be a subject of mass institutional adoption in the years to come.

This is not the first time Wood has set such an ambitious price target for bitcoin. She joined Michael Saylor in April to predict that the asset will eventually tap that milestone.

Ark Invest Increases Exposure to GBTC

The valuation of GBTC’s shares has significantly dropped due to the ongoing crypto winter. They currently trade at around $8.40, a 27% decline compared to last month’s figures.

Nonetheless, Ark Invest continues to enlarge its holdings and recently purchased more than 176,000 shares worth approximately $1.5 million. A week ago, the entity bought another $273k shares. This came as a surprise since it occurred amid severe market turbulence caused by FTX’s catastrophe.

Grayscale’s GBTC is currently trading at a 42.7% discount against BTC spot prices. It set the largest discount in the history of the fund on November 18, when the figure hit 45%.

GBTC is the largest bitcoin fund and manages over 635,000 BTC. As of the moment of writing these lines, that amount equals nearly $10.5 billion.

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Mattel Is Launching a Hot Wheels NFT Collection And a Brand New Marketplace

Despite the negative news surrounding the crypto ecosystem, NFTs continue attracting large entertainment companies’ attention.

This November 21, Mattel, one of the world’s largest toy companies, announced the launch of its own NFT marketplace, “Mattel Creations,” which will offer direct-to-consumer services.

According to the company’s press release, the first collection to be launched by the toy giant will feature NFTs of the Hot Wheels Garage Series 4, which will go on sale on December 15.

Mattel Bets Expanding Its Legacy To The Web3

The Hot Wheels NFT collection was developed by the same team in charge of manufacturing the physical collectible cars. This will make it possible for Mattel to offer valuable collections and rare digital artworks of Hot Wheels’ most popular vehicles, continuing its legacy on the Web3.

Despite being on the market for more than 54 years, the Hot Wheels brand has remained a leading vehicle franchise that, according to Mattel, “has proven its influence on automotive and pop culture with legendary design and epic performance.”

Hot Wheels vehicles have become the number one selling toy in the world, with more than 8 million vehicles sold and collected by fans of all ages.

Mattel is known for attracting customers through sponsorship of live events, worldwide competitions, digital games, movies, and TV shows, so it would not be surprising if they began launching campaigns promoting the new NFT market.

Mattel’s NFT Collections Sell Out “Instantly.”

An NFT is a unique token representing ownership over a specific asset. Even if they are part of a collection, each one has a specific set of characteristics that makes it possible to identify on the blockchain. Normal ERC20 tokens are fungible because they can be swapped by a similar token. However, NFTs standards such as the ERC721 are designed for tokens that behave more as assets than currency.

According to Mattel, previous NFT collections launched in conjunction with other companies, such as the Cryptoys x Masters of the Universe collection and the Barbie x Boss Beauties, have been so successful that they “sold out instantly.”

In addition to Hot Wheels, Mattel has a portfolio of iconic brands, such as Barbie®, Fisher-Price®, American Girl®, Thomas & Friends®, UNO®, and MEGA®, which, if launched in the new NFT marketplace, could compete on par with some well-known brands.

As Cryptopotato reported, while some celebrities like Justin Bieber have lost more than a million dollars investing in NFT, others like Cristiano Ronaldo are just entering this world. The football superstar just launched a new NFT collection with Binance.

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DCG Subsidiary to Acquire Bitcoin Mining Facilities and Other Assets From Compute North

Digital Currency Group’s subsidiary and crypto mining firm Foundry Digital plans to acquire two turnkey crypto mining facilities in the United States from the embattled Bitcoin miner Compute North.

In the latest press release, Foundry also said it would also acquire other assets in addition to an option to buy a third facility that is under development from the computing infrastructure company.

Acquisition Details

Foundry will buy Compute North’s North Sioux City, SD, and Big Springs, Texas. The facilities have a fully operational capacity of 6 MW and 11 MW, respectively.  The purchase will also include rights to completely build out and operate Compute North’s facility located in Minden, NE, a fleet of mining machines owned by the firm.

Foundry will also buy intellectual property, including rights associated with MinerSentry, which happens to be Compute North’s proprietary cloud-based management and monitoring software for data centers of scale.

Following the development, Mike Colyer, CEO of Foundry, stated,

“It has been our mission to strengthen the infrastructure of digital assets by supporting mining companies through all market cycles. Compute North has been our longtime partner and we are happy to have the opportunity to continue building upon the foundation they have laid over many years while growing the North American mining ecosystem.”

The acquisition development by the DCG subsidiary comes at a time when another company under its umbrella –  Genesis Global Capital – remains on the brink of bankruptcy. Reports suggested that the crypto brokerage is in dire need of fresh capital to recover from FTX’s collapse.

Compute North: Bankruptcy

The Bitcoin mining sector suffered massively as a result of dwindling prices in crypto-assets and increase US interest rates. During the volatile summer, the earnings of several mining companies took a serious hit. Compute North was one of the casualties which filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the Southern District of Texas in September in a bid to stabilize its business under court protection.

The terms of the filing allowed Compute North to continue its operation while chalking out a comprehensive restructuring plan to repay its creditors. The firm disclosed that it owed as much as $500 million to at least 200 creditors, while its assets are worth somewhere between $100 million and $500 million.

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Beyond Bitcoin – El Salvador Wants to Create a Legal Framework for All Crypto Assets

The government of El Salvador presented a bill that could set comprehensive rules on the local crypto sector and regulate the operations of all digital asset providers in the country. The ruling body is also one step closer to issuing blockchain bonds that could aid the development of certain BTC endeavors in the Central American nation.

The bear market has not changed the pro-bitcoin stance of President Nayib Bukele. He disclosed last week that El Salvador will purchase one BTC every day.

Focusing on the Entire Crypto Industry

A spokesperson for the presidency released a copy of a lengthy legislation that calls for establishing a crypto commission that could oversee the domestic ecosystem. The first country to make bitcoin legal tender seeks to “create a legal framework to transfer digital assets that are used in public issuances in El Salvador, as well as regulate the requirements and obligations of issuers and providers of digital assets.”

The government has also proposed the issuance of blockchain bonds, with a minimum investment of $100. According to the bill, the nation’s goal is to raise $1 billion via those products and stimulate the advancement of numerous crypto projects.

$500 million of that amount will be scheduled for financing the infrastructure of the coastal Bitcoin City that will use geothermal energy from a volcano to mine the asset. The authorities plan to use the remaining $500 million to buy BTC.

The Latin American country made history last year by embracing bitcoin as an official means of payment inside its borders. It has also started accumulating amounts of the leading digital currency on a macroeconomic level. It had purchased 2,381 BTC as of mid-November, equaling almost $40 million (given current prices).

Doubling Down on the Bitcoin Strategy

Nayib Bukele – the President of El Salvador – recently announced on Twitter that the government will resume its buying spree and purchase one BTC per day starting November 18.

The disclosure triggered some enthusiasm in the crypto community, and prominent figures endorsed the move. Tron’s Founder – Justin Sun – even vowed to follow the example of Bukele’s administration.

Recent coverages hinted that El Salvador could have held its bitcoin stash on the distressed crypto platform FTX. President Bukele dismissed the rumors in a conversation with Binance’s Changpeng Zhao, asserting that the nation has “never had any business” with SBF’s trading venue.

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After FTX Blowup, Crypto Wallet SafePal Achieves Record Signups

The collapse of crypto exchange FTX appears to have sparked surging sales for self-custodial crypto wallets which give users direct ownership of their coins. 

SafePal, a Binance-backed crypto wallet brand, has experienced a 10x surge in traffic to its platform since November 11th, and its hardware wallet has made record sales within that time. 

  • SafePal surpassed over 7 million users over the past 6 months, with pronounced gains in November.
  • In a statement shared with CryptoPotato, SafePal CEO Veronica connected its increasing traffic to FTX’s bankruptcy
  • “The recent FTX situation has taught the industry an important lesson about decentralization and transparency,” she said. “As more people realize the importance of taking full control of their assets, SafePal will become one of the  major web3 gateways for the crypto masses.”
  • FTX is suspected to have mishandled client assets by lending them out without user permission, rather than backing deposits 1:1 at all times. 
  • This eventually led to its insolvency, when a “bank run” left it unable to satisfy clients’ overwhelming demand for withdrawals. 
  • At the time, Binance was experiencing roughly equal net inflows to FTX, possibly being viewed as the more dependable company for previous FTX users. The larger exchange’s CEO, Changpeng Zhao, arguably sparked FTX’s collapse earlier this month with tweets spreading doubt about the firm.
  • Binance has since promised to implement proof of reserves at its exchange, to ensure users that their assets are always safe. 
  • Nevertheless, Crypto Twitter has been vocal in encouraging traders and investors to use self-custody this month, to stay safe from future loss of funds to centralized counterparties. 
  • Trezor, a popular hardware wallet provider for digital assets, also reported a 300% surge in sales in the days after FTX confirmed its insolvency. 

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Bitcoin Mining Firm Core Scientific Lost $1.7 Billion in 2022

Public-traded Bitcoin mining company Core Scientific has lost about $1.7 billion since the start of the year, according to its quarterly report filed with the United States Securities and Exchange Commission (SEC) on Tuesday.

The filing shows that the firm recorded its second consecutive quarterly loss at the end of Q3. The Bitcoin miner lost $435 million in Q3 and $862 million in Q2, bringing its net loss for the year to a staggering $1.7 billion.

Core Scientific Seeks Fresh Capital

Core Scientific said it needed fresh capital before continuing operations this month. The firm also noted that it anticipates its existing cash resources to be depleted sooner or by year-end. 

“Given the uncertainty regarding the Company’s financial condition, substantial doubt exists about the Company’s ability to continue as a going concern through November 2023,” the firm said.

The Bitcoin mining company holds $32 million in cash and 62 BTC as of October, down from 8,000 at the beginning of the year. The firm attributed its losses to the severe decline in BTC’s USD value, rising energy costs, and hash rates.

Core Scientific May Consider Bankruptcy 

Following the significant drop in the price of BTC, which was triggered by macroeconomic headwinds, the miner has taken several steps to boost liquidity and cope with the market.

For instance, Core Scientific announced the sale of 7,202 BTC (approx. $167 million) in July at an average price of approximately $23,000. At the time, the firm noted that sales proceeds would be used to pay for ASIC servers, capital investment, and debt repayments.

The company has been unable to clear its debts, which amount to approximately $1 billion. The miner previously revealed that it may file for bankruptcy if it cannot raise capital to repay its creditors. 

Bitcoin Mining Firms Struggle Amid Bear Market

Meanwhile, Core Scientific is not the only mining firm struggling amid the intense crypto winter. In June, Canadian Bitcoin miner Bitfarms offloaded $62 million of its BTC to reduce its debts and maintain liquidity.

Two months ago, the largest operator of crypto-mining data centers, Compute North, filed for Chapter 11 bankruptcy in Texas.

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Sam Bankman-Fried Conspired With SEC for “Special Treatment:” US Congressman

Tom Emmer – the U.S. congressional representative for Minnesota – recently spoke on the political meetings and failures surrounding Sam Bankman-Fried (SBF), prior to his exchange’s collapse. 

The Republican suggested that Bankman-Fried tried currying “special treatment” from the Securities and Exchange Commission (SEC) through meetings with the agency, and attempted to push legislation to the same effect. 

Bankman-Fried’s Political Relationships

In an interview with FOX on Tuesday, Emmer said FTX’s blowup was not a failure of crypto, but of “centralized finance,” “business ethics,” and government oversight procedures. The congressman said he had “major questions” about the SEC’s failure to prevent the disaster. 

“They were working, apparently, with Sam Bankman-Fried and others, to give them special treatment from the SEC that others aren’t getting,” said Emmer. He mentioned meetings the agency held in March with SBF, other FTX executives, and a U.S.-based trading firm that FTX partnered with in April. 


“Sam Bankman-Fried was pushing special-treatment legislation through congress. when it was finally revealed what it was, and the industry started raising red flags all over the place, that’s when this thing came apart,” he added. 

Emmer blasted Gensler for failing to protect investors from such catastrophes, including the fallouts of Celsius, Voyager, and Terra earlier this year. “What is the regulator doing going after good actors in the community, and working backroom deals, it appears, with people who are doing nefarious things?”

The congressman, who is also the House Majority Whip, first alluded to investigating ties between the SEC and FTX earlier this month. On November 10th, he claimed to have received reports alleging that the agency was working to secure a “regulatory monopoly” for FTX using “legal loopholes.”

The SEC has frequently been criticized for failing to provide regulatory clarity that would help the crypto industry best develop in the United States. Coinbase CEO Brian Armstrong argued that the regulator’s inaction has pushed trading activity to unregulated areas overseas, contributing to investor harm. 

CME Chief’s Early FTX Callout

Aside from the SEC, CME Group CEO Terry Duffy also met Bankman-Fried in March. 

The executive noted similar “red flags” about both his character and operations in a conversation with CNBC last week. He said SBF turned down Duffy’s offer of his crypto franchises worth $30 million, as he would have required Baknman-Fried to follow his risk-management framework. 

“You’re a fraud. You’re an absolute fraud,” he claimed to have told Bankman-Fried at the time. 

In another interview with CNBC on Tuesday, he too said he was always suspicious of SBF’s closeness with regulators and politicians, who were “singing hymns” about him during his visits to Washington. 

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Crypto Exchange BIT Launches Qatar 2022 World Cup-Themed Campaign With $1 Million Prize Pool

[PRESS RELEASE – Please Read Disclaimer]

The FIFA World Cup takes over the world once every four years. Despite its unusual timing and controversy around the 2022 location and venue, this year’s event has attracted millions, if not billions, of fans all over the world.

This presents a compelling opportunity for up-and-coming and established companies to display their brand as well as provide some lucrative opportunities for current and future customers.

The popular crypto exchange BIT has begun such a campaign, offering a whopping prize pool of $1 million for eligible participants.

BIT’s FIFA World Cup Campaign

The program, themed around the Qatar 2022 World Cup, launches with the aforementioned prize pool of $1 million, which will be distributed to eligible participants who follow these requirements.

First, they need to register with the exchange, which is a simple enough process, before starting trading. At this point, they will receive Rad-Bit points which will be automatically included in their master event.

Naturally, they will get more Rad-Bit points should the team they have chosen win. The Rad-Bits can then be exchanged for different tokens and rewards, which will ultimately allow users the opportunity to win a portion of the prize pool.

“The World Cup brings pleasure and excitement to the entire world, and we want to be a part of that. We want to keep introducing people to the world of crypto, and what better way to do that than through the most popular sport in the world!” – Commented the exchange’s co-founder and COO, Lan Yue.

About BIT

Launched as a spinoff of Matrixport in August 2020 (a crypto bank valued at $1 billion in 2021 that saw the light of day in 2019), BIT is a full-suite cryptocurrency exchange offering options, perps, futures, spot trading, and savings, built off the ethos of simplicity at the cutting edge.

It provides users with unified accounts, which saves them the trouble of money funds between multiple wallets to trade one of the many available instruments on the platform. When combined with BIT’s best-in-class liquidity, the exchange’s institutional-grade security and risk management tools ensure a seamless trading experience.

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