Decentral Block Post

NFL quarterback Tom Brady and NBA point guard Stephen Curry are reportedly among the celebrities facing a probe from the Texas financial regulator over their promotion of the now-bankrupt crypto exchange, FTX. 

Joe Rotunda, director of enforcement at the Texas State Securities Board reportedly told Bloomberg in a Nov. 22 report that the Texas State Securities Board is scrutinizing payments received by celebrities to endorse FTX US, what disclosures were made and how accessible they were for investors.

Rotunda however noted that while the watchdog was taking a "close look at them," the celebrities’ endorsements of FTX were not an "immediate priority,” but would be part of the “regulator's larger probe into FTX's collapse."

Both Brady and Curry have also been named in a Nov. 15 class-action lawsuit against FTX, along with former FTX CEO Sam Bankman-Fried.

The lawsuit alleged that they “controlled, promoted, assisted in, and actively participated” in FTX Trading LTD and West Realm Shires Services Inc.

Decentralized exchange (DEX) Uniswap's recently updated privacy policy appears to have attracted the ire of some members of the community, with concerns that collecting and storing user data works against crypto's core values. 

In recent responses to a November blog post regarding its updated privacy policy, some vocal members of the community suggested it i uncharacteristic for a decentralized entity to collect and store information about its users.

In the Nov. 11 post from Uniswap Labs, released around the time of FTX’s collapse, the decentralized exchange released its privacy policy to explain how it collected and stored user data

“With innovations around blockchain, web3 aims to reclaim users’ privacy and choice after decades of internet businesses that have eroded it.”

“That’s why we’re releasing a new Privacy Policy today – we want to be crystal clear about what data we’re protecting and how we use any data we collect. Transparency is key. We never want our users to be surprised,” it said.

Continued selling in the cryptocurrency markets pulled the total market capitalization below $800 billion on Nov. 21. Traders are increasingly nervous about the extent of damage FTX’s collapse may have on several crypto firms. Until the uncertainty clears, it is futile to expect a sustained recovery in cryptocurrency prices.

The FTX saga has broken the close correlation between the United States equities markets and Bitcoin (BTC). While Bitcoin is trading close to its 52-week low, the S&P 500 (SPX) has recovered sharply from its low made on Oct. 13.

The U.S. dollar index (DXY) is usually inversely correlated to Bitcoin but its recent drop from the multi-year high did not benefit Bitcoin. This suggests that crypto buyers remain on the sidelines and are not venturing in to buy.

However, Billionaire investor and hedge fund manager Bill Ackman said in a Twitter thread on Nov. 20 that crypto was “here to stay with proper oversight and regulation.”He also highlighted the potential of cryptocurrencies to “greatly benefit society and grow the global economy.”

Could the cryptocurrency market catch up with the U.S. stock markets? Let’s study the charts of the S&P 500 index, the U.S. dollar index (DXY) and the major cryptocurrencies to find out.

Serum, a "decentralized exchange" on the Solana blockchain, has performed exceptionally well in terms of its SRM token price, despite it ties to the defunct FTX exchange.

SRM price up 140% in one week

On the daily chart, the SRM/USD pair has gained 140% in the last seven days, hitting $0.319 on Nov. 21 versus $0.177 on Nov. 14.

This pushed the circulating market cap to about $73 million and "fully diluted market cap," the market cap if the maximum supply was in circulation, to nearly $2.8 billion.

"Closer to zero"

SRM price rallied despite the ongoing delisting of Serum trading pairs across major cryptocurrency exchanges, including Binance, OKEx, Gate.io, and Phemex, thus raising fears about an ongoing "exit pump."

Exit pumps are when large investors pump the token's price in a low-liquidity environment to attract new buyers, only to then dump their entire holdings on amateur investors as witnessed with numerous pump-and-dump schemes.

Billionaire investor and hedge fund manager Bill Ackman says he remains bullish about cryptocurrencies, despite the recent collapse of the FTX cryptocurrency exchange and the market turmoil that’s followed it.

In a Nov. 20 Twitter thread, the CEO and founder of hedge fund management firm Pershing Square Capital Management said he believes “crypto is here to stay” despite recent challenges, though there’s a need to increase oversight and remove “fraudulent actors” in the space.

Bill Ackman is a billionaire American investor most recently calling for the removal of regulatory barriers and easing regulations in New York in order to make the city a crypto hub. He is also direct investor in a number of crypto projects.

“I think crypto is here to stay and with proper oversight and regulation, it has the potential to greatly benefit society and grow the global economy,” he said.

However, Ackman said that like the invention of the telephone and the internet, the technology improves on the next in terms of its ability to facilitate fraud:

The independent examiner in crypto lender Celsius’ bankruptcy case has alleged that the company failed to set up “sufficient” accounting and operational controls in its handling of customer funds. 

In an interim report released on Nov. 19, examiner Shoba Pillay made a number of stark observations in her court-appointed investigation into the bankrupt cryptocurrency lending platform.

One of the main revelations in Pillay’s report was that Celsius’ “Custody” program was launched “without sufficient accounting and operational controls or technical infrastructure,” which allowed shortfalls in Custody wallets to be funded from its other holdings.

“[...] no effort was made to segregate or separately identify any assets associated with the Withhold accounts, which were commingled in the Main wallets.”

When it was launched on Apr. 15, Celsius’ Custody program allowed users to transfer, swap and use coins as loan collateral. It was introduced after the firm was ordered by the New Jersey security regulators to create a product that was distinguished from Celsius’ “Earn” product, which receives rewards.

The FTX collapse continues to stoke fears of a contagion in the cryptocurrency space as investors wait to hear about businesses that may face the heat. One of the marquee names to come under the circle of suspicion is the Grayscale Bitcoin Trust (GBTC), which has seen its discount to Bitcoin’s (BTC) price reach record levels of about 50%.

Traders hate uncertainty and shy away from investing during these periods. That could be one of the reasons for a lack of buying interest in Bitcoin even after the sharp fall in its price. The Stock-to-Flow (S2F) model, which had seen its popularity soar during the bull phase, is coming under increasing criticism after the deviation between Bitcoin’s price and its projected price hit levels never seen before.

Does this suggest that the pessimism has reached an extreme or is it just that the S2F model is flawed?

During a bear phase, the general trend is down but there are always pockets of strength that may offer trading opportunities to long-only investors. However, rallies during bear markets are short-lived, hence traders may consider booking profits near strong resistance levels.

Let’s look at the charts of five cryptocurrencies that may attempt a rally in the near term.

The FIFA World Cup in Qatar is boosting the value of national soccer club fan tokens despite the cryptocurrency bear market.

World Cup Qatar hype boosts fan token prices

These digital fan tokens are currently rallying despite the cryptocurrency market downturn, securing up to 170% gains from the Nov. 10 lows. At the core of the massive uptrend is the World Cup, which will be held from Nov. 20 to Dec. 18 in Qatar.

Fan tokens are cryptocurrencies that enable fans to engage with and participate in their favorite team's decisions. Moreover, they create new sponsorship opportunities for sports clubs and national squads outside of traditional revenue sources.

Here's a brief overview of the top gainers in the fan token sector, alongside their technical outlook during the course of the World Cup.

Spain National Football Team Fan Token (SNFT)

The Spain National Football Team Fan Token (SNFT) emerged as the top gainer in the sports token section, rising 170% to a high of $0.54 on Nov. 19, nine days after bottoming out at $0.20.

2022 was a tough year for crypto, and November was especially hard on investors and traders alike. 

While it was incredibly painful for many, FTX’s blowup and the ensuing contagion that threatens to pull other centralized crypto exchanges down with it could be positive over the long run.

Allow me to explain.

What people learned, albeit in the hardest way possible, is that exchanges were running fractional reserve-like banks to fund their own speculative, leveraged investments in exchange for providing users with a “guaranteed” yield.

Somewhere, across the crypto Twitterverse, the phrase “If you don’t know where the yield comes from, you are the yield!” is floating around.

The sentiment across the cryptocurrency ecosystem remains fragile as market participants assess the impact of the FTX crisis on various businesses within and outside of the crypto sector. Trading firm QCP Capital said in its latest circular on Telegram that crypto assets may continue their underperformance till the new year. QCP projects Bitcoin (BTC) to plunge to $12,000 and Ether (ETH) to $800.

Looking at the brighter side, FTX could be the last major player to bite the dust during the current bear market cycle, according to CK Zheng, co-founder of crypto hedge fund ZX Squared Capital.

Zheng also added that institutional investors who have a long-term horizon may continue to invest in blockchain technology and select cryptocurrencies such as Bitcoin and Ethereum.

When the sentiment is bearish, rumors create panic among traders who dump their holdings out of fear. Usually, these occasions form a bottom. Traders may remain cautious and avoid placing large bets until the dust settles and the markets confirm a bottom.

What are the important levels to keep an eye on and which could suggest that the correction may be over? Let’s study the charts of the top-10 cryptocurrencies to find out.

Bitcoin (BTC) saw a fresh rejection at $17,000 on Nov. 18 as nervous markets weathered more FTX fallout.

BTC gets $12,000 price target

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD failing to flip $17,000 to support — a trend in place for almost a week.

The pair, like major altcoins, remained firmly tied down by cold feet over the FTX debacle and its knock-on effects for various crypto businesses.

For analysts, the outlook remained just as grim, with already dismal forecasts worsening in light of recent events.

“This underperformance of all crypto assets is here to stay until the bulk of uncertainly has cleared up - likely only near the turn of the new year,” trading firm QCP Capital wrote in its latest circular to Telegram channel subscribers on the day.

The Securities Commission of The Bahamas (SCB) said it had ordered the transfer of all digital assets of FTX Digital Markets (FDM) to a digital wallet owned by the commission on Nov. 12. 

In a Nov. 17 statement, the SCB said it exercised its power as a regulator acting under the authority of a Supreme Court order — moving the assets to a “digital wallet controlled by the Commission, for safekeeping.”

SCB justified last week’s move by stating that “urgent interim regulatory action was necessary to protect the interests of clients and creditors of FDM.”

The latest revelation could shed some light on certain movements of funds detected last week. 

On Nov. 11, the crypto community flagged a number of suspicious transactions in wallets tied to FTX and FTX.US, with analysts reporting around $663 million drained. $477 million were suspected to be stolen while the remainder was believed to have been moved to secure storage by FTX themselves.

Before we get into the nitty-gritty of how one simple rule created the kind of insane return on investment noted in the headline — during one of the worst Crypto Winters in recent history — let’s be clear on one thing.

You can’t copy this now.

But anyone with access to Cointelegraph Markets Pro in 2022 could have. This is not a mere backtested strategy. It’s a real-life strategy — although you’re about to see historical results. 

This is no longer a thought experiment or proof-of-concept; it is an actual way to make money in crypto trading. 

For our purposes, it’s also a perfect way to illustrate how a simple strategy can work for real traders in real life — even during extreme market pullbacks. 

Binance crypto exchange announced on Nov. 17 that deposits of Solana-based USDT and USDC have been “temporarily suspended until further notice” on the platform.

The exchange referred to the tokens as “USDT (SOL)” and “USDC (SOL),” as USDT and USDC stablecoins remain available for deposits on Binance on other blockchains.

Binance did not provide more information on the measure, adding that Binance “reserves the right in its sole discretion to amend or change or cancel this announcement at any time and for any reasons without prior notice.”

Other exchanges, including OKX and ByBit, are also among the platforms delisting Solana-based stablecoins for deposits. OKX exchange suspended the tokens’ deposits at 3:00 AM UTC on Nov. 17, while ByBit reportedly disabled such deposits as of Nov. 17 as well.

Major cryptocurrency exchanges continue to carry out measures in the aftermath of FTX collapse, now halting deposits in Solana-based Tether USDT (USDT) and USD Coin (USDC).

Singapore's state-owned investment firm Temasek revealed despite eight months of due diligence in 2021, it didn't find any significant red flags in FTXs financials before deciding to invest $275 million into the now-bankrupt crypto exchange.

Like many of FTX's more than one million creditors, the Singapore-based firm has been left blindsided by the collapse of FTX and the ongoing fallout, saying in a Nov. 17 post:

"The thesis for our investment in FTX was to invest in a leading digital asset exchange providing us with protocol agnostic and market neutral exposure to crypto markets with a fee income model and no trading or balance sheet risk."

Before the firm decided to invest $210 million for a stake of 1% in FTX International and $65 million for a minority 1.5% stake in its United States-based entity FTX US across two funding rounds, it claims to have conducted "extensive due diligence" from Feb. to Oct. 2021.

According to Temasek it reviewed FTX's audited financial statements, investigated the associated regulatory risk with crypto financial market service providers, and sought advice from external legal and cybersecurity specialists, with a legal and regulatory review undertaken for the investments.

Professional esports organization Team SoloMid (TSM) (previously TSM FTX) has suspended its $210 million sponsorship deal with the now-bankrupt FTX crypto exchange “effective immediately” following the cryptocurrency trading platform’s shock collapse last week.

The United-States-based esports organization made the announcement in a Nov. 16 tweet to its 2.2 million followers, adding that the decision was made after “monitoring the evolving situation and discussing internally.”

The $210 million deal was put to paper in Jun. 2021, which resulted in the renaming of TSM to TSM FTX. At the time of the deal, the esports organization said it would allocate its new resources to all corners of the globe by opening offices in Asia, Europe and South America, according to Esports insider.

TSM also purchased $1 million worth of FTX’s native token, FTT, which was distributed to players and employees. 

Following FTX's collapse last week, TSM in a Nov. 13 tweet said the firm was discussing its legal counsel “to decide the best next steps to protect our team, staff, fans and players.”

The collapse of FTX cryptocurrency exchange has created a liquidity crisis in the crypto space, which could extend the crypto winter through the end of 2023, according to a research report by Coinbase.

According to analysts, the FTX implosion could keep the institutional investors at bay because they are even more likely to tread cautiously for some time.

The crisis has negatively impacted several crypto-focused companies who have assets stuck on FTX following the company's bankruptcy filing on Nov. 11. Investors also fear the contagion could spread, causing further damage to the cryptocurrency ecosystem.

Although several investors were rattled by the collapse of FTX, billionaire venture capitalist and serial blockchain investor Tim Draper remains bullish on Bitcoin (BTC). In a Nov.15 interview with Cointelegraph, Draper doubled down on his $250,000 target for Bitcoin in 2023.

However, investors should take the price projection with a pinch of salt because it is unlikely that Bitcoin will start a roaring bull market in the near future.

Solana (SOL) has lost 60% of its market value in a week due to its exposure to the now-defunct crypto exchange FTX, which could continue to haunt the "Ethereum killer" well into the future.

FTX/Alameda exposure hurting Solana price

FTX and its sister-firm Alameda Research is liable to have control over 50 million SOL, according to Solana's statement released on Nov. 10.

The FTX entities received 4 million SOL from the Solana Foundation on Aug. 31, 2020. They also started receiving a portion of 12 million SOL from Sep. 11, 2020, and nearly 34.52 million SOL from Jan. 7, 2021, through a "linear monthly unlock" mechanism.

Furthermore, the FTX entities started receiving portions of a 7.5 million SOL reserve from Solana Labs on Feb. 17, 2021. Notably, a transaction worth 62,000 SOL between the same entities stands unsettled.

Most SOL tokens promised to FTX/Alameda are vested, meaning the firm does not yet have them in custody but is liable to receive them through the linear monthly unlock mechanism. The last of these unlocks will occur by January 2028.