In RockItCoin’s effort to empower individuals in the cryptocurrency space, we have extracted top industry stories for your Weekly Digest. Cryptocurrency continues to dominate the news and here are some key happenings you should know.
Crypto Exchange FTX Collapses, Files for Bankruptcy
Cryptocurrency exchange FTX and its celebrity CEO Sam Bankman-Fried (SBF) are in hot water. Last week, it was reported that FTX International and sister company Alameda Research (a trading firm) both held large amounts of FTX Token (FTT). It is a questionable practice for companies to own large amounts of their own coin and report them on their balance sheets. Crypto Exchange Binance noticed this, and moved to sell their FTT holdings, which Alameda Research did not want them to do because it could sink their value. People saw this and started to panic, selling their FTT and moving their funds off of FTX platforms. FTT’s price dove from around $22 to $4, and FTX was left with little to no money to back their customers\’ funds, and eventually had to halt withdrawals.
Crypto exchange Binance reached out and sought to acquire the company, but backed out after 48 hours as a result of corporate due diligence. SBF has tweeted an apology for the situation, and said that FTX US is not affected by the situation, as the losses only affect FTX International. This turned out to be false as FTX posted a press release on Friday that stated FTX, FTX US, and Alameda Research were filing for bankruptcy, along with approximately 130 other companies. The implosion of a crypto exchange as big as FTX certainly does not make the industry look good, but it will come to pass. For now, enjoy the crypto market being “on sale”!
Bitcoin Price Spikes as Improved CPI Data is Released
The price of Bitcoin enjoyed a short period of relief last Thursday as improving Consumer Price Index (CPI) data was released by the Federal Reserve. October’s consumer inflation rate of 7.7% shows signs of slowing inflation, due to the rate hikes enacted by the government. As a result, Bitcoin’s price rose quickly to $17,800, but could not hold for long due to the ongoing market’s downward trend with news of FTX’s downfall. Slowly decreasing CPI is encouraging for the American public, as many have had to deal with rising prices in most aspects of their lives. Crypto, however, continues its own journey.
Crypto Regulation Advances, Driven by FTX Exchange Collapse
In a press briefing on Nov 10, White House Press Secretary Karine Jean-Pierre said that President Biden’s administration is aware of FTX’s bankruptcy and the downturn in the crypto market. Senators continue to work towards publishing a final version of the Digital Commodities Consumer Protection Act, in an effort to more closely monitor the cryptocurrency industry. The bill has been in the works since it was introduced in August, and if passed into law, will grant the Commodity Futures Trading Commission (CFTC) an extension of power to regulate the crypto industry. Once the bill is finalized, it will need to be passed by the Senate, House of Representatives, and President Joe Biden.
