More Bitcoin Leaving Coinbase; Kraken’s CEO considers Binance’s proof of reserves meaningless
The biggest news in the cryptoverse for November 28th includes the Kraken CEO saying Binance Proof-of-Reserve is meaningless without Proof of Commitment, Coinbase lost $2 billion worth of Bitcoin over the weekend, and BlockFi filed for Chapter 11 bankruptcy.
CryptoSlate Top Stories
Another $2 billion in Bitcoin was withdrawn from Coinbase over the weekend
According to Glassnode, crypto exchanges have lost over $15 billion worth of Bitcoin (BTC) in the past five days, with Coinbase losing the most.
Between November 24 and November 25, about 100,000 BTC (a total of $1.5 billion) was reportedly withdrawn from Coinbass. The trend continued over the weekend of November 26 and 27, where $2 billion worth of Bitcoin left the exchange’s reserve.
Consequently, Coinbase has lost $3.5 billion over the past five days, while Binance has topped its reserve with roughly $1.2 billion worth of Bitcoin.
Kraken’s Powell Says Binance Proof-of-Reserve Is Meaningless Without Commitments
Kraken CEO Jesse Powell claimed that Binance’s Proof of Reserve (PoR) was insufficient as it failed to highlight its commitments. He added that implementing a Merkle tree without an external auditor is not enough to prove that the exchange did not increase the reserve with accounts with negative balances.
In response, Binance CEO Changpeng Zhao said his exchange was working on involving external auditors soon, while maintaining that the POR did not include negative balances.
Jokes about wrapped ETH depeg cause brief panic on Twitter
With insolvency rumors taking over the crypto community, prominent Ethereum advocates including Vitalik Buterin made a joke that Ethereum (WETH) was about to become insolvent.
To avoid further panic in the community, Ethereum developer Hudson Jameson called out the joke and clarified that WETH technically will not face insolvency as it is a smart contract that is as decentralized as Ethereum and cannot face a bank run.
However, the WETH joke caused ETH’s price to drop by about 4%, with some community members warning that such jokes can get “the dumbest of users” reprimanded.
BitBoy claims O’Leary was the key player in the Celsius collapse along with FTX
Crypto YouTuber “Bitboy” while speaking on Altcoin Daily called out Kevin O’Leary for strongly supporting Sam Bankman-Fried (SBF). Bitboy alleged that SBF targeted competing platforms such as Celsius and contributed to the collapse in order to gather more liquidity for FTX.
Bitboy added that SBF supporter O’Leary had publicly called for Celsius to go down to zero, before the crypto lender’s fallout.
Texas wants to be the center of Bitcoin innovation, says Governor Abbott
Texas Governor Greg Abbott has encouraged Bitcoin companies to set up offices in Texas as he advanced a pro-Bitcoin/blockchain agenda that will make the state “more welcoming” to Bitcoin innovation.
Abbott added that Texas improved its legislation to be “sort of anti-regulatory,” while providing the necessary infrastructure for Bitcoin to succeed.
Germany has the second highest concentration of ETH nodes in the world
According to CV VC Labs’ 2022 Blockchain Report, approximately 22.8% of all Ethereum validators operate from Germany. This leaves the European nation with the second highest concentration of ETH nodes, only behind the US which leads with 45.3%.
In addition, the report highlighted that German blockchain projects raised approximately $8 billion across 220 funds, with around 34 startups becoming unicorns.
JP Morgan believes regulation will lead to convergence of crypto, TradFi
In the wake of the FTX collapse, JP Morgan & Chase highlighted possible changes they believe will help crypto and traditional financial coverage. The banking giant said it foresees the approval of regulatory frameworks such as the EU’s Markets in Crypto Assets (MiCA) bill in 2023, which will largely focus on customer protection and self-custody regulation.
It added that crypto exchanges may be required to improve transparency by publishing a regular reserve, asset and liability audit. It also predicts a shift away from centralized exchanges (CEX) to decentralized exchanges (DEX).
Blockfi becomes another victim of FTX collapse with bankruptcy
Barely two weeks after halting customer withdrawals, crypto lender BlockFi has filed for Chapter 11 bankruptcy due to its massive exposure to FTX. It reportedly owes about 100,000 creditors, including the Securities and Exchange Commission (SEC), to which it owes about $30 million.
BlockFi added that it has approximately $256 million in cash to go through the restructuring process, with the aim of “maximizing values for all customers and stakeholders.”
LINE-founded cryptocurrency exchange BITFRONT announces closure
Asia-based crypto exchange BITFRONT announced plans to cease operations effective March 31, 2023. After that date, it will stop withdrawals and continue to delete all personal files of users from its system.
The VP of AAX speaks out against handling the company’s bankruptcy decision
The bankruptcy trend has hit Hong Kong stock exchange AAX, which revealed it cannot pay staff salaries beyond November, while customers will receive about 50% of their money.
AAX Vice President Ben Caselin moved to step down from the role, expressing dissatisfaction with the bankruptcy process.
Research highlight
Binance Led 2017 ‘Dumb Money’ Bitcoin Investment; FTX leads 2022 cycle
Back in 2017, when Binance was established, it served as a haven for foolish money investors who FOMO entered into Bitcoin trades based on hype and withdrew their holdings even at a loss after the price peaked.
Fast forward to 2022, Binance has grown to become the leading crypto exchange, making it a home for smart money investors, while exchanges like the bankrupt FTX housed the dumb money investors.
News from the entire Cryptoverse
Gam7 launches 100 million dollar grant program
Web3 gaming DAO Gam7 has established a $100 million grant program for game developers to build tools and scaling solutions that will lead to global adoption of Web3 games.
Kraken pays $363K to the US Treasury
The US Treasury announced that it has levied $362,158 on crypto exchange Kraken for failing to implement sanctions against Iran.
Kraken reportedly failed to block the IP addresses of Iranian users trading on the exchange at a time when the Treasury imposed a ban on Iran.
Crypto market
Over the past 24 hours, Bitcoin (BTC) has fallen slightly by -1.87% to trade at $16.243, while Ethereum (ETH) has fallen by -3.44% to trade at $1.172.
