LensLinks: Issue 34

Today in LensLinks:

• The "Looming $62B Crypto Contagion"?

• More FTX/SBF/Binance Stuff (Methinks it'll be a while)

• Metaverse designs real world homes?

• Crypto Screams for Regulation

• "A Shocking Defense of Crypto" from JPMorgan

• Crypto Exchange Liquidity - What's the Solution?

• And Much, Much, More...

Cryptocurrency lender BlockFi Inc. is preparing a potential bankruptcy filing after halting withdrawals of customer deposits and acknowledging it has “significant exposure” to bankrupt exchange FTX, people familiar with the matter said.

In order to create scarcity and essentially bolster the value of its exchange tokens, FTX and Binance conduct what are known as token burns. Periodically both exchanges send tokens to irretrievable addresses reducing the float, similarly to a share buyback, and thus increasing the value of the exchange tokens outstanding. Since 2019 FTX has burned 21 million FTT tokens. In total, Binance has burned more than 42 million BNB, which would be worth $11.6 billion at today’s prices. CZ has said Binance doesn’t borrow money and has never used BNB as collateral on loans. He recently began advocating that exchanges undergo a “proof” of funds.

“The way that FTT works,” said Bankman-Fried in an August 2022 interview with Forbes, “It is not that you get free FTT for doing things. The way to think about it is that you get free shit for having FTT. So, there's a bunch of doo-hickeys.”

After launching the early alpha for its user generated metaverse creation tool, Finland-based Yahaha Studios impressed two big Asian investors ⁠— Alibaba and Tencent — to pick up $40 million in series A+ funding.

The round was co-led by Singapore-headquartered Temasek and the Chinese tech giant Alibaba, following on from an earlier $50 million series A for Yahaha, which counts over 150 employees spread across Helsinki, Shanghai and Seoul.

The funding will go to growing Yahaha's product, community, workforce and ecosystem, its alpha test campaign having already recruited over 100,000 games content creators.

The empire built by Mr. Bankman-Fried, who was once compared to titans of finance like John Pierpont Morgan and Warren Buffett, collapsed last week after a run on deposits left his crypto exchange, FTX, with an $8 billion shortfall, forcing the firm to file for bankruptcy. The damage has rippled across the industry, destabilizing other crypto companies and sowing widespread distrust of the technology.

Besides some Twitter posts, messages to employees and occasional texts to reporters, Mr. Bankman-Fried, 30, has said little publicly over the last week. In the interview on Sunday, he voiced numerous regrets over the collapse of FTX.

At issue, the sources said, is whether FTX violated securities laws when it reportedly gave customer funds to Alameda Research, the trading firm of FTX founder Sam Bankman-Fried.

A spokesman for the U.S. Attorney’s Office for the Southern District of New York declined to comment.

Metaverse & Gaming - A Little More...

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

Crypto Trading - A Little More...

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