LensLinks: Issue 32

Today in LensLinks:

• Should "All Custodial Crypto Exchanges Should Adopt Proof-of-Reserve Programs"

• Gensler discusses regulation but may also come under investigation

• FTX Hack

• Ontario Teachers Pension Could Lose $95 Million on FTX Investment

• 101: What Is DeFi Yield Farming, And Is It Worth It?

• ‘DeFi-Killing’ Crypto Law Appears To Be Dead on Arrival, According to Castle Island Ventures Founder Nic Carter

• And Much, Much, More...

Following Gensler’s interview, Congressman Tom Emmer tweeted that his office has received reports alleging that the SEC chairman helped Bankman-Fried and FTX work on legal loopholes to obtain a regulatory monopoly. “We’re looking into this,” the lawmaker wrote.

Sam Bankman-Fried once called Project Serum, an on-chain crypto exchange that he created, the “truly, fully trustless” backbone of decentralized finance (DeFi) on the Solana blockchain. But trust in the fallen FTX chief’s once-mighty crypto liquidity engine has suddenly run dry.

On Saturday, DeFi protocols across the Solana ecosystem began unplugging from Serum for fear that they didn’t know who wielded control – a concern fueled by the late-Friday hack at FTX. The developers once associated with Serum have gone silent. Meanwhile, the protocol’s dependence on Bankman-Fried and his bankrupt companies Alameda and FTX loomed large.

The collapse of FTX came as a surprise to many, but as more information pours in, it seems FTX's liquidity crisis began sooner than many thought.

Here are two of the (potentially many) reasons why we need more than proof-of-reserves from crypto exchanges:

We’re still partially depending on humans. Sure, these are humans at audit firms, but the humans at defunct accounting firm Arthur Andersen didn’t catch that the humans at Enron were engaged in fraud.

While a proof-of-reserves attestation might show that an exchange does in fact have the bitcoin (or other asset) you asked it to hold for you, there’s no guarantee it hasn’t done a bunch of other stuff with your funds.

Metaverse & Gaming - A Little More...

Blockchain, Tokens & Defi - A Little More...

Crypto Trading - A Little More...

Dear reader: You made it to the bottom. How about forwarding LensLinks to a friend or reposting/re-tweeting? Click the handy links at the top to do so easily. Thanks for reading.

Disclaimer: This note is distributed by Regiment, LLC for informational purposes only and is sourced from publicly available media reports. It is not an investment recommendation or solicitation for any investment. The information is current as of date and subject to change. In such case Regiment, LLC does not undertake to provide any updates. Recipients must be aware that any private, alternative investments discussed are speculative in nature, often illiquid, and subject to loss of capital.