December 2, 2022

The biggest crypto news and ideas of the day

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

In the news: CFTC chairman suggests "pause" to overhaul DCCPA following FTX debacle, FTX Japan plans to restart customer withdrawals and Coinbase takes issue with Apple's 30% app store fees.
The Takeaway: David Z. Morris covers all the crimes Bankman-Fried seemingly admitted to on his recent media apology tour.

– D.K.

Today's must-reads

Top Shelf

CFTC chairman reevaluates DCCPA following FTX debacle: CFTC Chairman Rostin Behnam said the agency needs to reevaluate the Digital Commodities Consumer Protection Act (DCCPA), a bill sponsored by bipartisan senators and favored by FTX's Sam Bankman-Fried. The bill, which some crypto legal experts think could overextend the definition of "broker," a regulated entity, to DeFi, may still become law.

"Given the circumstances of the past few weeks, I think we should take a pause and look at the bill and make sure there are no gaps or no holes," he said. This comes as the U.S. Department of Justice calls for an independent examination of FTX.
Meanwhile, FTX Japan, the crypto exchange's subsidiary, plans to restart local customer withdrawals, which were halted on Nov. 8 after local financial regulators ordered the exchange to suspend services.

Coinbase Disables Mobile NFT Transfers, Citing Apple's App Store: Crypto exchange Coinbase has disabled non-fungible token (NFT) transfers on its iOS wallet app because iPhone maker Apple wanted a 30% cut of gas fees on in-app transactions. Earlier in October, Apple refused to exempt NFT trading from its 30% App Store fee, a policy that has kept marketplaces like OpenSea from offering NFT trading within its mobile app.

MakerDAO Community Votes to Hike DAI Rewards to 1%: Maker's decentralized autonomous organization, or DAO, voted to increase the rewards paid to collateral providers of its dollar-pegged DAI stablecoin to 1%, giving an incentive for investors at a time when yields in crypto are low.

There are currently $5 billion DAI in circulation, backed by more than $7 billion worth of assets held in reserve.

– D.K. and Xinyi Luo

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Putting the news into perspective

The Takeaway

Sam Bankman-Fried sticking his tongue out while at Crypto Bahamas (Danny Nelson/CoinDesk)

Sam Bankman-Fried's Self-Incrimination Tour

The media played a crucial role in the rise of Sam Bankman-Fried. Now that the disgraced founder's crypto exchange is bankrupt, Bankman-Fried seems to believe he can win back the public's hearts and minds through an apology tour. These interviews are ill-advised, David Z. Morris writes, noting the many crimes SBF has seemingly admitted to while speaking to the New York Times and on Twitter. Read the full story here.

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Overheard on CoinDesk TV...

Sound Bites

"Congress certainly has to take care to make sure that the right legislation and regulation is created for the times."

– Pennsylvania State University Dickinson law professor Tonya Evans, on CoinDesk TV's "First Mover"

The news in a sentence

Headlines

Galaxy Digital Agrees to Buy Some Assets From Bankrupt Crypto Lender Celsius | CME Group Teaming With CF Benchmarks for 3 New DeFi Rates and Indices | FCA-Regulated Crypto Custodian Digivault Is Up for Sale Following Eqonex Liquidation: Source | DeFi Protocol Ankr to Reimburse Users Affected by $5M Exploit | Avalanche-Based DEX Trader Joe to Soon Deploy on Ethereum Scaling Solution Arbitrum

After FTX, Investors Are Choosing an Exchange with a Long Track Record of Best Practices in Liquidity and Risk Management

FTX's recent implosion sent shockwaves throughout the crypto world as retail and institutional investors saw billions of dollars of investments wiped out. Many investors became aware of the issue at once, triggering a widespread withdrawal that led to FTX's insolvency. Industry-wide discussions regarding exchange reserves came to the forefront in the aftermath, leading many exchanges to only just now start announcing commitments to proving reserves.

But is proof-of-reserve enough? How can an investor know whether an exchange is actually safeguarding user assets and operating with transparency?

*This is sponsored content from Gate.io.

What others are writing

Off-Chain Signals

Sam Bankman-Fried's hedge fund took big hit to prop up FTX exchange (FT - paywalled)
Rising Tether Loans Add Risk to Stablecoin, Crypto World (WSJ - paywalled)
11 Hours With Sam Bankman-Fried: Inside the Bahamian Penthouse After FTX's Fall (Bloomberg - paywalled)