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Bankrupt Crypto Exchange FTX Takes Steps Towards Relaunching as a New Entity

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FTX, the bankrupt crypto exchange, is moving closer to relaunching itself as an entirely new exchange, as stated in a recent report from The Wall Street Journal on June 28. John Ray, the restructuring chief at FTX, announced that the company has initiated the process of seeking interested parties for the reboot of the FTX.com exchange.

Sources familiar with the matter revealed that FTX has been engaged in discussions with potential investors regarding financing for the relaunch.

Among the interested parties is Figure, a blockchain lending company. However, Figure did not respond to Cointelegraph’s request for comment.

Potential bidders have been given until the end of the week to submit their Letters of Intent, which outline the terms and conditions for their participation in the process.

Notably, current FTX creditors may be offered a stake in the reorganized crypto exchange, along with other forms of compensation.

In an effort to distance itself from its troubled past, FTX is expected to rebrand with a new name rather than being called “FTX 2.0” or any variation of its original name.

The FTX team, led by John Ray, believes that a reboot is the best course of action to ensure that creditors receive the best possible outcome in terms of repayment.

FTX’s legal team had previously stated in April that they anticipated the launch of the new exchange to be completed sometime in the second quarter of 2024.

However, the recovery process for FTX is not without challenges. A June 26 report highlighted a significant deficit of nearly $2 billion in FTX’s books.

Furthermore, the efforts to recover these missing funds have been further complicated by allegations of the misuse of customer assets by key leadership at FTX.

Daniel Friedberg, a former regulatory officer at FTX, who has been mentioned as an unnamed party in many legal proceedings, was sued by FTX on June 27.

The lawsuit accuses Friedberg of orchestrating “hush money” payments to silence potential whistleblowers and approving fraudulent transfers and loans.

The report on the missing funds also shed light on alleged investments in venture capital firms, a $243 million Bahamian real estate portfolio, and numerous donations to non-profit organizations.

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Reshape The Future Of Cellular Connectivity And Bridge The Digital Divide

US Federal Reserve Stress Tests: Largest Banks Pass Severe Recession Scenario

According to the United States Federal Reserve, all 23 of the country’s largest banks have passed the “stress tests” and would be able to withstand a severe recession.

The report, released on June 28, highlighted some weaknesses among midsize and regional banks, although the stress tests only included the participation of the largest lenders.

In light of the banking crisis earlier this year, Federal Reserve policymakers have suggested that future stress tests could become more rigorous.

Michael Barr, the Fed’s vice chair for supervision, emphasized the importance of remaining humble in the face of potential risks and continuing efforts to ensure that banks are resilient to various economic scenarios, market shocks, and other stresses.

Since the 2008 financial crisis, which was caused by U.S. banks, bank stress tests have been conducted annually.

The purpose of these tests is to evaluate the potential losses the banking industry would incur in the event of skyrocketing unemployment and a significant contraction in economic activity.

In this year’s stress test, the Federal Reserve examined a severe global recession scenario that resulted in a 40% decline in commercial property prices and a 38% decline in home property prices.

In the worst-case scenario, unemployment would reach 10%, compared to the current rate of 3.7%. The tests revealed that the 23 largest banks would collectively experience losses amounting to $541 billion in this hypothetical scenario.

To receive a passing grade, a bank must maintain a stressed capital ratio of at least 4.5%, which serves as a crucial indicator of its financial strength, according to the Federal Reserve’s requirements.

Earlier this year, the American banking system was shaken by the collapse of several prominent institutions, including Silicon Valley Bank, Signature Bank, Silvergate Bank, and First Republic Bank.

Others, such as PacWest and Western Alliance, were also teetering on unstable ground.

To address the challenges faced by smaller banks, the Federal Reserve established the Bank Term Funding Program (BTFP) in March, actively providing bailout assistance.

Federal Reserve data indicates that over $100 billion has already been allocated to support struggling small and mid-sized banks.

Overall, the stress tests conducted by the Federal Reserve offer valuable insights into the resilience of the largest banks in the United States while underscoring the need for ongoing efforts to strengthen the banking sector and mitigate potential risks in the future.

Discover the Crypto Intelligence Blockchain Council

Crypto Intelligence Blockchain Council

The Crypto Intelligence Blockchain Council is comprised of pioneers and leaders of the crypto and Web 3.0 space, with members including current or former employees of Kraken, Coinbase, Tezos Foundation, and IoTeX.

Members of our Blockchain Council have the opportunity to share their insights with the cryptosphere by contributing thought leadership pieces and opinion articles to our leading news platform.

Additionally, members of the Crypto Intelligence Blockchain Council are invited to Web 3.0 panels and events held throughout the year.

Featured Members

Deepak Garg – Chief Compliance Officer & MLRO (MENA) at Kraken

Jakob Linus Stammler – Product Owner & Operations Manager at Tezos Foundation

Miles Anthony – CEO & Founder of Decentral Games

Dr Raullen Chai – CEO of IoTeX and formerly Lead of Crypto R&D and Engineering Security at Uber

Gagan Gehani – Ex-Product Manager at Coinbase

Martin Petkov – Head of Marketing at LandVault, Formerly of HSBC

Mark Zalan – CEO of GoMining, formerly a Silicon Valley network security engineer

Radovan Vukotic – Head of Finance at CoinFantasy

Haris Khan – Group Vice President of Growth at Rain

Suliman Mulhem – Founder of Imperium Comms and member of the Forbes Business Council

Alex Thurston – Chief Executive Officer of Bitcoin PR Buzz

Ehab Khattab – Content Manager at the Dubai Future Foundation

Stacy Smith – PR Manager at BetFury

To learn more about joining the Crypto Intelligence Blockchain Council, get in touch with us.

EDX Cryptocurrency Exchange Prepares to Switch Custody Providers

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EDX, a recently launched cryptocurrency exchange, is reportedly preparing to switch its custody provider from Paxos Trust to Anchorage Digital.

The exchange, which received support from prominent traditional finance entities like Citadel Securities, Fidelity Digital Assets, and Charles Schwab, operates on a noncustodial business model aimed at eliminating conflicts of interest.

EDX currently facilitates trading in two cryptocurrencies, Bitcoin and Bitcoin Cash.

Notably, Bitcoin Cash has experienced significant growth since the exchange’s inception, with a 70.43% increase over the past week and a remarkable 101.36% surge in the last month.

Following the exchange’s announcement of its partnership with Paxos in October, the United States Securities and Exchange Commission proposed stricter custody regulations for crypto firms.

Paxos, holding a BitLicense from the New York Department of Financial Services, faced an investigation earlier this year for undisclosed reasons.

Additionally, Paxos obtained preliminary conditional approval for a U.S. bank charter from the United States Comptroller of the Currency (OCC) in 2021, but that approval reportedly lapsed by the end of March.

Anchorage Digital, on the other hand, became the first crypto firm to receive a national trust bank charter from the OCC in January 2021.

However, it faced regulatory issues a year later due to Anti-Money Laundering deficiencies and subsequently agreed to a consent order.

Shortly thereafter, Anchorage Digital formed a custody network with prominent crypto exchanges including Binance.US, CoinList, Blockchain.com, Strix Leviathan, and Wintermute.

EDX has plans to introduce EDX Clearing, a clearinghouse designed to settle trades executed on the EDX Markets platform, later this year.

While EDX declined to comment on the change of its custody provider, Anchorage Digital did not respond to requests for comments regarding the matter.

The decision to switch custody providers signifies EDX’s commitment to establishing a secure and compliant infrastructure for its users.

With the support of reputable financial heavyweights and the intention to introduce a clearinghouse, EDX aims to enhance its trading platform and ensure a seamless experience for cryptocurrency traders.

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North Carolina Moves Forward with Bitcoin Study, Explores Benefits of Holding Cryptocurrency

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The lower house of the North Carolina General Assembly has approved a bill that paves the way for the state to study the feasibility and advantages of holding Bitcoin.

The bill, which passed the North Carolina House of Representatives on June 28, would allocate $50,000 for a study to explore the potential acquisition, secure storage, insurance, and liquidation of both gold bullion and virtual currencies, including Bitcoin.

The study aims to assess the impact of incorporating gold and cryptocurrency holdings into North Carolina’s financial assets.

It will investigate whether such holdings can act as a hedge against inflation and systemic credit risks.

Additionally, the study will examine whether including gold and crypto assets in the state’s portfolio could reduce volatility and increase overall returns.

One of the bill’s proposals involves the creation of a state-administered depository to house the digital asset holdings. Under this arrangement, North Carolina would act as the custodian of its crypto assets.

The study will also consider the costs and benefits associated with using a privately managed depository or utilizing the depository of another state.

The bill received support from the majority of the 120-member House, with 73 representatives voting in favor, 40 against, and seven absentees.

However, before the bill can become law or be vetoed, it must also pass through the Senate and receive final approval.

In a related development, on May 3, the North Carolina House unanimously passed a bill prohibiting payments to the state using a central bank digital currency (CBDC).

The legislation also forbids the United States Federal Reserve from conducting any future pilot CBDC tests in North Carolina.

Prior to that, on May 2, the Buncombe County Board of Commissioners in North Carolina passed a one-year moratorium on cryptocurrency mining.

This temporary ban reflects a growing concern over the environmental impact of mining operations.

As the bill progresses through the legislative process, North Carolina is demonstrating an increased interest in exploring the potential benefits and risks associated with cryptocurrencies, digital assets, and their role within the state’s financial infrastructure.

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BlackRock Declares Artificial Intelligence a ‘Mega Force’ for Investors

Global investment firm BlackRock, known for managing $10 trillion in assets, has emphasized the significance of artificial intelligence (AI) in its mid-year outlook report.

The company sees AI as a “mega force” that could generate substantial returns for investors, particularly in today’s “unusual” market conditions.

BlackRock’s report highlights the increasing concentration of gains in the S&P 500, with only a few tech stocks driving the index.

The firm believes that investing in AI presents an opportunity to capitalize on this concentration. Despite challenging macroeconomic conditions, BlackRock’s investment team views AI as a major driver of returns.

The report identifies automation as the most apparent benefit of AI. While acknowledging the increased risk of automation for white-collar jobs, BlackRock suggests that the resulting cost savings could significantly enhance profit margins, especially for companies with high staffing costs and tasks that are easily automated.

Additionally, the firm recognizes the potential of AI-powered tools in leveraging proprietary data to create innovative models.

BlackRock also points out several key drivers of growth in the coming decade, including the global shift towards low-carbon economies, aging populations, and the rapidly evolving financial system.

The firm’s perspective on AI aligns with other voices in the investment industry. Matt Huang, CEO of Paradigm, a crypto investment firm, emphasized the compelling developments in the AI field and their significance.

However, not all commentators share the same bullish outlook on AI investments. Macro-finance commentator Financelot highlights that the recent AI boom, exemplified by the soaring shares of GPU manufacturer Nvidia, is largely driven by demand for AI-focused computing chips. He suggests that potential U.S. export restrictions on these chips could negatively impact the share prices of AI-related companies.

While BlackRock has shown enthusiasm for AI, recent developments have also seen the company turning its attention to Bitcoin.

The firm has submitted an application to the Securities and Exchange Commission for a spot Bitcoin Exchange Traded Fund (ETF), aiming to be the first to receive regulatory approval for such a product. Bloomberg analysts estimate BlackRock’s chances of approval at 50%.

In summary, BlackRock identifies AI as a powerful force that can drive significant returns for investors.

The firm sees automation, data leverage, and several macroeconomic trends as key factors contributing to AI’s growth potential.

However, there are differing opinions regarding the long-term sustainability of the AI boom, with concerns over the dependence on AI-focused computing chips.

BlackRock’s recent interest in Bitcoin further demonstrates its adaptability to emerging investment opportunities.

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Shiba Inu (SHIB) Witnesses Massive Outflows from Whale Wallets Amid Shibarium Uncertainty

Recent developments have raised concerns about the popular cryptocurrency Shiba Inu (SHIB) as significant outflows from the wallets of large investors have been detected by IntoTheBlock, a blockchain analytics firm.

This sudden shift in sentiment from bullish to bearish has grabbed attention. Since Monday, an astounding one trillion SHIB tokens have been withdrawn from the wallets of major investors, surpassing the inflow of 745 billion tokens.

Consequently, the netflow of Shiba Inu whales’ wallets over the past seven days has reached a disheartening -377.35 billion SHIB, indicating a substantial drop of half a trillion tokens from the previous day’s value.

Two key considerations emerge when examining the reasons behind the behavior of these large SHIB holders: fundamental and technical factors.

The first consideration revolves around the adoption of Shiba Inu and its associated projects, with Shibarium taking center stage.

Although Shibarium, a Layer 2 solution, is currently operating in a test network, the team behind it has remained tight-lipped, providing minimal information beyond cryptic Twitter messages.

The uncertainty surrounding the release of Shibarium on the main network may have prompted major holders to decrease their SHIB positions.

The second factor pertains to the price of the Shiba Inu token, which recently failed to surpass the critical resistance level of $0.0000084 per SHIB.

Despite a noteworthy rally, the token has experienced a 12% decline since then, leaving its trading status uncertain.

This ambiguity regarding the future price direction of SHIB may have discouraged significant whales, who typically exercise caution in their operations due to the substantial sums involved.

The question now arises: can Shiba Inu overcome these challenges and regain its momentum? The path forward for SHIB depends on addressing the concerns surrounding Shibarium’s release on the main network.

Transparent communication and timely updates from the project team would help instill confidence in the ecosystem and potentially attract back large investors.

Additionally, efforts to stabilize and elevate the token’s price beyond the critical resistance level could reignite bullish sentiment among investors.

As the Shiba Inu community awaits further developments, it is essential for stakeholders to closely monitor both the progress of Shibarium and the market dynamics affecting SHIB’s price.

By addressing these concerns and providing a clear roadmap for the future, Shiba Inu has the potential to restore investor confidence and reclaim its upward trajectory.

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Sale of FTX’s $500 Million Stake In AI Startup Paused, Hindering Efforts To Fill $2 Billion Gap

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FTX’s attempt to fill a $2 billion gap in its balance sheet has hit a snag as the sale of its $500 million stake in Anthropic, an artificial intelligence startup, has been temporarily halted.

According to Bloomberg’s sources on June 27, Parella Weinberg Partners, FTX’s advisory investment bank, decided to pause the sale despite the interest shown by multiple parties.

The sale of FTX’s stake in Anthropic would have been a significant step towards recovering funds for the bankrupt crypto exchange.

FTX’s restructuring chief, John Ray, stated in a report on June 26 that around $8.7 billion in user funds were misused, but they have managed to recover approximately $7 billion of that amount.

Before the sale was paused, several potential buyers had expressed interest in acquiring FTX’s stake in Anthropic. In early June, Semafor reported that FTX was actively promoting the AI firm to potential investors.

FTX had initially acquired $500 million worth of Anthropic stock prior to its bankruptcy in November, and with the current boom in the AI industry, the stake is expected to have significantly increased in value.

Anthropic itself has experienced substantial growth recently. In its most recent funding round, the company achieved a reported valuation of $4.6 billion and secured $450 million in investments.

Anthropic’s main product, an AI chatbot named “Claude,” has versatile applications in sales, customer service, and web searches.

The news of the sale pause comes shortly after Ray’s report revealed that FTX still had $2 billion to recover in assets.

The report highlighted the alleged misuse of customer funds, including thousands of dollars in grants for non-crypto-related projects, investments in venture capital firms.

A $243 million real estate portfolio in the Bahamas, and donations to non-profit organizations and a political action committee operated by Gabe Bankman-Fried, the younger brother of FTX co-founder Sam Bankman-Fried.

Cointelegraph reached out to Parella Weinberg Partners and Anthropic for comment but has not received an immediate response.

The delay in selling FTX’s stake in Anthropic adds another hurdle to the crypto exchange’s efforts to address its financial shortfall and rebuild its balance sheet.

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Drop Wireless, NextEPC To Reshape The Future Of Cellular Connectivity And Bridge The Digital Divide

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Drop Wireless, a trailblazer company specializing in decentralized physical infrastructure development, is thrilled to announce its partnership with NextEPC, a cellular core network development and private 5G network solution expert.

This collaboration will redefine and expand the cellular communications landscape, bridge the digital divide, and drive groundbreaking advancements in network infrastructure with a vision to provide decentralized 5G connectivity worldwide, including areas completely marginalized or underserved by centralized providers.

Drop Wireless and NextEPC will explore innovative technologies, enhance network scalability, and develop groundbreaking solutions that will reshape the future of cellular communications. By joining forces, Drop Wireless and NextEPC will unlock a wide range of compelling opportunities, including digital twins, AR gamification, IoT sensor monitoring, and pervasive edge computing.

The partnership will also enable the processing of vast amounts of data collected by devices in infrastructure facilities at the network edge, as well as facilitate seamless transfer to cloud networks. This approach will empower individuals and communities by delivering a true metaverse experience, combining ultra-real-time sensing with AI compute capabilities at the network edge.

Expanding connectivity worldwide

The collaboration between Drop Wireless and NextEPC has the potential to completely transform the cellular core network landscape. By combining Drop Wireless’ decentralized physical infrastructure with NextEPC’s expertise, the partnership aims to establish a new paradigm in network development. The combined efforts will facilitate the deployment of resilient, flexible, and cost-effective cellular networks.

“We are thrilled to join forces with NextEPC,” said Dr. Andrew Baek, CEO of Drop Wireless. “Their extensive experience in cellular core network development aligns perfectly with our vision of creating decentralized physical infrastructure. Together, we will unlock new possibilities for connectivity, enabling reliable communication in areas that were previously considered unreachable.”

Dr. Jihoon Lee, CEO of NextEPC, also expressed enthusiasm. “The partnership with Drop Wireless marks a significant milestone for us. By leveraging our expertise in cellular core network development, we can contribute to Drop Wireless’ mission of expanding connectivity and bridging the digital divide. We look forward to jointly developing cutting-edge solutions that will redefine the way networks are built and operated.”

Connectivity for all

Drop Wireless is at the forefront of the connectivity revolution by pioneering decentralized physical infrastructure. Their innovative approach enables seamless and robust network connectivity in challenging environments, remote areas, and disaster-stricken regions where traditional infrastructure is limited or non-existent.

By leveraging cutting-edge technologies, Drop Wireless empowers individuals and communities, granting access to critical services, information, and communication channels.

NextEPC brings an impressive wealth of knowledge and experience, boasting a proven track record in designing and constructing efficient and scalable cellular networks. They have developed cellular products for major global telecom operators.

Their expertise has earned them the trust of industry leaders worldwide. NextEPC’ s core team has extensive experience in cellular network development, including the inception of all IP-based fourth-generation mobile communications. Furthermore, NextEPC provides a comprehensive suite of 5G NR core network functionalities.

Expanding its ecosystem

This new collaboration agreement with NextEPC comes several months after Drop Wireless migrated its blockchain operations onto IoTeX’s layer one, adopting its W3bstream, the world’s first open, chain-agnostic data computational infrastructure. It makes Decentralized Physical Infrastructure Network (DePIN) deployment dramatically faster and cheaper.

“We’re excited to see Drop Wireless’ development progressing incredibly well and its partnership with NextEPC is testament to its commitment to advancing the decentralized communication landscape,” said Chai.

“Drop Wireless shares our vision to fast-forward the DePIN sector and transcend borders with the deployment of DePIN projects that, like them, will have a tremendous social impact.”

Drop Wireless and NextEPC are committed to making a global impact by ensuring connectivity for all, regardless of geographical location or infrastructure limitations.

By revolutionizing the way cellular networks are developed and operated, the partnership will bring transformative benefits to individuals and communities worldwide by revolutionizing the way cellular networks are developed and operated.

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Bitcoin (BTC) Miners Experience Record Surge in Revenue Sent to Exchanges

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Bitcoin miners are experiencing a significant surge in revenue sent to exchanges, according to a tweet by Glassnode, an on-chain analytics platform.

The platform reported that miners had sent a record-breaking $128 million to exchanges in the past week, which amounts to a staggering 315% of their daily revenue.

While there have been previous spikes in miner revenue during the 2021 bull run, this recent surge surpasses them all by a considerable margin.

Typically, miners send their Bitcoin profits to exchanges to cover expenses and secure their profits. Given that Bitcoin reached its highest price of the year, touching $31,185 on June 24, this past week presented an opportune time for miners to cash out.

CryptoQuant co-founder and CEO Ki Young Ju echoed this sentiment, noting that the current price-to-earnings ratio was attractive for miners to sell.

However, despite the increased activity from miners, Bitcoin’s price remains relatively stable above the $30,000 threshold.

The $31,000 price level poses a significant resistance for Bitcoin, as it failed to break it both in mid-April and late June.

If bulls are unable to make progress and miners continue liquidating their holdings, the possibility of future losses looms.

Although Bitcoin’s price has surged by over 88% year-to-date, miners still face numerous challenges.

Profitability has dropped by more than 30% since July of the previous year and has plummeted over 80% since the peak of the 2021 bull market.

Moreover, record hash rates of 377 EH/s and peak difficulty levels further compound the obstacles faced by Bitcoin miners.

With rising hash rates, difficulty levels, and energy costs, mining profitability has been negatively impacted.

Consequently, miners may reluctantly need to sell their hard-earned Bitcoin to cover expenses, a situation that is far from ideal.

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