November 28, 2022

The biggest crypto news and ideas of the day

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Hello and welcome to The Node. This is Daniel Kuhn, here to take you through the latest in crypto news and why it matters. In today's newsletter:

In the news: BlockFi files for Chapter 11 protections, MakerDAO votes against CoinShares' investment proposal and Canadian exchange Coinsquare alerts customers of data breach.
The Takeaway: The "bitcoin obituary" obituary.

– D.K.

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Today's must-reads

Top Shelf

BlockFi Files for Bankruptcy as FTX Contagion Spreads: The crypto lending company filed for Chapter 11 bankruptcy protection Monday, days after suspending withdrawals. The company, which had been valued at $3 billion in 2021 and received a $400 million loan from FTX this year, reportedly has about $257 million in cash on hand and more than 100,000 creditors.

FTX US' corporate owner, West Realm Shires Inc., and the U.S. Securities and Exchange Commission are among BlockFi's largest named creditors.
Meanwhile, several U.S. state regulators are investigating crypto trading firm Genesis Global Capital over potential securities law violations.

MakerDAO Community Rejects $500M CoinShares Bond Investment Proposal: The decentralized lending protocol MakerDAO has rejected a plan for CoinShares to actively manage between 100 million and 500 million USDC for the DAO by investing in a portfolio of corporate debt securities and government-backed bonds. Some 72% of votes were cast against the proposal.

The plan, rejected by 70% of voters, was similar to Coinbase Prime's previously approved $1.6 billion investment deal.
This comes as JPMorgan publishes its latest crypto analysis, predicting centralized services will outcompete many DeFi alternatives.

Coinsquare Says Client Data Breached: One of Canada's largest cryptocurrency exchanges, Coinsquare, may have been breached, the company said. It added that customer assets are "secure in cold storage and are not at risk." The company suspended activities on its platform after detecting the vulnerability last week, triggering speculation of possible liquidity issues.

Customer names, email addresses, addresses, phone numbers and other information was exposed, according to a company email Friday.
Separately, U.K. crypto fraud rose by 32% to 226 million pounds ($273 million) this year, according to data from the nation's police unit Action Fraud.

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Putting the news into perspective

The Takeaway

The Bitcoin Obituary Obituary

D.K. writes about the recent spike in predictions that bitcoin and crypto will fail following the implosion of FTX. These accounts often mistake what crypto is meant to achieve – like The Economist forecasting that a lack of trust will bring down a trustless protocol. Another path forward? Rather than imagining the end of crypto, Harvard economist Matthew Ferranti thinks bitcoin could end up on central banks' balance sheets. Read the full article here. Read the full article here.

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Overheard on CoinDesk TV...

Sound Bites

"What this ecosystem provides is an opportunity for the consumer to control their personal information. When that happens the relationship between content brands and the consumer shifts."

– Former TIME President and incoming MoonPay Enterprise President Keith Grossman, on CoinDesk TV's "First Mover"

The news in a sentence

Headlines

TIME President Grossman on Why He's Heading to MoonPay | FTX Direct Clearing Plan Was 'Not Even Close' to Decision, CFTC Chief Says | Crypto Exchange Huobi Denies Rumors It Will Merge With Poloniex | Binance Delists Serum Trading Pairs Amid FTX Connection | The Bahamas' Attorney General Defends Country's Regulatory Framework Amid FTX 'Debacle'

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What others are writing

Off-Chain Signals

Congressmembers Tried to Stop the SEC's Inquiry Into FTX (Prospect)
A forgotten banking scandal suggests FTX is the tip of the crypto iceberg (Dirty Bubble Media)
Abracadabra Calls On Sushi For Emergency Assistance As Faulty Oracle Places $10M At Risk (The Defiant)
US ApeCoin Holders Blocked From Official Staking Website (The Defiant)
Line to Shutter US Crypto Exchange Next Year, Suspends Onboarding Today (Decrypt)