Month: März 2023

FTX Excludes Bahamian Unit from Claims Over Company Assets

• FTX seeks to exclude its Bahamian unit, FTX Digital Markets (FTX DM), from any claim over company assets.
• The company was set up in May 2022 with alleged involvement of fraud by its founder Sam Bankman-Fried.
• There has been legal and diplomatic tensions between US and the Bahamas since the filing claims that Bahamian law enforcement agencies had close relationship to SBF.

FTX Seeks To Exclude Bahamian Unit From Any Claim Over Company Assets

FTX DM was established in May 2022 as an offshore haven for an ongoing fraudulent scheme by its founder, Sam Bankman-Fried (SBF). The company is now seeking to exclude its Bahamian unit from any claim over company assets, according to a legal filing on 19 March. This accusation can likely rekindle legal and diplomatic tensions between the U.S. and the Bahamas.

Bahamas Courts Placed FTX’s Bahamas Arm Into Liquidation

The Bahamas courts placed the FTX’s Bahamas arm, FTX Digital Markets (FTX DM), into liquidation on 10 November 2020. The larger group filed for bankruptcy in Delaware the next day thus creating a perplexing situation which has already resulted in disagreements over who has access to corporate data held centrally.

Close Relationship With Bahamian Agencies Mentioned In Filing

The legal filing also mentions $143 million transferred to FTX DM bank accounts and accuses Bahamian authorities of assisting SBF’s efforts to avoid prosecution. It states that SBF and other FTX executives maintained a close relationship with Bahamian law enforcement agencies, including Prime Minister, Attorney General and Securities Commission intending to use this relationship if massive fraud was discovered.

Request To Strip Power Of Liquidators

FTX now led by restructuring expert John J Ray III asked Delaware courts through its recent filing that it should completely strip Bahamas liquidators of any powers ruling that FTX DM is an economic and legal „nullity“ with no legitimate fiat, crypto or intellectual property to resolve.

No Comment From Regulator or Liquidators Yet

The Bahamas Securities Commission and liquidators have not issued any comment on the matter as of now although previously they had mentioned Ray’s public comments demonstrate a „cavalier attitude towards truth“. Both parties however came into understanding to cooperate in January 2021

Hedera Resumes Operations After Major Exploit, HBAR Price Plummets

• Hedera network experienced a period of downtime due to an exploit in its Smart Contract Service code.
• Following the resumption of operations, the total value of assets locked (TVL) on DeFi protocols on Hedera has increased by 7%.
• The price of HBAR has declined by 34% in the past 20 days and is now trading at $0.05795.

Hedera Network Experiences Period of Downtime

Hedera Hashgraph suffered a major setback when an exploit in its Smart Contract Service code caused a 24-hour period of downtime. As soon as it was detected, Hedera decided to turn off mainnet proxies to prevent further theft. This resulted in a decrease in the total value of assets locked (TVL) on DeFi protocols on Hedera during this time.

Network Resumes Operations

Following several hours of downtime, Hedera resumed operations and saw an uptick in transactions per second processed on the chain. Twitter user KungensSlott complained about low transactions per second rate soon after it returned online but this issue has since been resolved with 791 transactions being processed per second at press time.

HBAR Price Plummets

Similar to the overall increase in cryptocurrencies at the start of 2021, HBAR also rose to a high of $0.088 on 20 February before experiencing a decline down to $0.05795 at press time – representing a 34% drop over 20 days according to CoinMarketCap data. A look at its Moving Average Convergence/Divergence (MACD) indicator showed that bears had taken control from bulls since 20 February, as signified by its Directional Movement Index where sellers‘ strength surpassed buyers‘.

Hedera Profit Calculator

Is your portfolio green? Check out the Hedera Profit Calculator for more information about how your portfolio is doing during this bear run and what strategies you can take advantage of while HBAR’s prices remain low.

Conclusion

The attack that took place against Hedera’s Smart Contract Service code caused disruption within their network, resulting in decreased TVL and lower prices for HBAR tokens over recent weeks. However, following recovery operations, things are beginning to look up again with increased transaction rates and higher TVLs returning despite bearish pressures still present over HBAR’s market performance currently.

BTC Long Liquidations Spike: Price Capitulation Could Follow

• Long liquidations for Bitcoin (BTC) reached a seven-month high following the decline in BTC’s price on March 3.
• CryptoQuant analysts believe further drops in BTC’s price are imminent due to a large spot sale on exchanges such as Binance and an increase in coin distribution by short-term holders.
• Joao Wedson warned investors of a possible “price capitulation” if BTC’s market capitalization crosses its Delta Cap metric, an occurrence that has preceded significant drops in price three times prior.

Long Liquidations Reach Seven-Month High

Following the sharp decline in Bitcoin’s [BTC] price in the early trading hours of 3 March, long liquidations soared to a seven-month high, data from Coinglass showed. The drop in value was triggered by apprehension and uncertainty regarding Silvergate Capital, a financial institution recognized for its supportive attitude toward digital currencies. Source: Coinglass

Analysts Warn of Further Price Drops

CryptoQuant analyst caueconomy found that these long liquidations were the third since the Terra/LUNA crash in May 2022 and the second following the fallout of cryptocurrency FTX in November 2022. Another CryptoQuant analyst with the pseudonym CryptoOnchain opined that Bitcoin’s [BTC] price might drop further due to an increase in outflow of stablecoins from exchanges and lack of support from long-term holders for recent price increases. Source: CryptoQuant

Joao Wedson Warns of Possible Price Capitulation

Pseudonymous analyst Joao Wedson warned investors to gear up for a „possible new scenario of price capitulation.“ Wedson assessed BTC’s Delta Cap metric and found that a price bottom is formed when the coin’s market capitalization crosses with its Delta Cap. This crossing occurred on three previous occasions: 2011, 2015, and 2018; each time followed by notable drops in BTC’s prices. Source: CryptoQuant

Is Your Portfolio Green?

To benefit from this year’s increase in prices, an on-chain assessment revealed an increase in coin distribution by short-term holders as well. Is your portfolio green? Check out the Bitcoin Profit Calculator to find out more information about how your investments have performed so far this year.

Conclusion

The crypto market has seen an increase in outflow of stablecoins from exchanges which cannot sustain current prices leading to potential further decreases while short term holders have been buying BTC, long term holders have not supported recent increases leading analysts to warn investors to prepare themselves for “price capitulation” if it follows historical patterns with past occurrences being followed by significant drops after market capitalization crosses with its Delta Cap metric