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What was at one time the largest deal in the esports industry has been dashed as TSM will pull the plug on a partnership with FTX, the gaming and entertainment platform announced.

The partnership will be suspended “effective immediately,” which means “FTX branding will no longer appear on any of our org, team and player social media profiles, and will also be removed from our player jerseys,” TSM said on Twitter, ending a $210 million deal that required FTX to make $21 million in annual payments over 10 years.

A number of partnerships fell through directly following FTX’s abrupt collapse and subsequent move to file for Chapter 11 bankruptcy protection.

The exchange’s name is set to be removed from the FTX Arena after Miami-Dade county and Miami Heat announced that they would terminate the partnership and secure new naming rights for the sports and entertainment center.

Visa has also opted to cancel a crypto debit card deal with FTX on the heels of an October announcement that the service would launch in over 40 countries.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

A key Senate committee could hold a hearing to investigate the collapse of crypto exchange FTX.

The Senate Banking Committee is “working to schedule a hearing and details are forthcoming,” according to a Democratic committee spokesperson. FTX, once valued at $32 billion, filed for bankruptcy protection last week.

The push to schedule a Senate hearing comes after the House Financial Services Committee announced it will hold a hearing on the FTX collapse in December, including into Binance’s role in the sudden meltdown. At the same time, the beleaguered crypto exchange and former CEO Sam Bankman-Fried are under investigation by the Department of Justice, the Securities and Exchange Commission and the Commodities Futures Trading Commission. 

“The SEC, DOJ, and CFTC have announced inquiries into FTX’s bankruptcy and Sam Bankman-Fried’s misconduct. The Banking and Housing Committee’s role is to understand the cryptocurrency industry’s structure, as well as look into the broader issue of how cryptocurrencies impact consumers, our markets, and the economy – including the ripple effects of failures like FTX, Voyager, and Celsius,” the spokesperson said in a statement.

It’s not clear when the Senate Banking Committee will schedule its hearing, or who lawmakers may call on to testify.

Committee Chair Sherrod Brown, a Democrat, has long been critical of the crypto industry. Brown warned this week that crypto could “crash our financial system” after FTX fell apart.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The Department of Justice doesn’t want lawyers tipping off their clients about investigations, a representative cautioned.

“We recommend that the private sector, when we are dealing with DeFi or really digital assets as a whole, to be cognizant, if the government sends you legal process when it comes to a subpoena or search warrant or of that nature to your customers, not to notify your customers because if the customer knows they’re being investigated — we call it an anti tip-off provision — perhaps they will move their assets or they will run,” said Sanjeev Bhasker, digital currency counsel with the DOJ.

Bhasker was speaking at an event held by the Blockchain Association in Washington, D.C. His comments referred to the DOJ’s responses to President Biden’s executive order on cryptocurrencies.

Bhasker said the recommendations ask, “what is DeFi, and is something truly decentralized. And if someone is labeling themselves as decentralized in nature, is that true? Are there centralized attributes?”

That skepticism towards self-labeled “decentralized” entities extends across U.S. authorities, and Securities and Exchange Commission Chair Gary Gensler has noted it regularly.

The Commodity Futures Trading Commission’s ongoing case against Ooki DAO is similarly a challenge to the organization’s labeling as decentralized and autonomous.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The collapse of crypto exchange FTX is proof  digital asset markets need more effective oversight, according to U.S. Treasury Secretary Janet Yellen. 

“Further interconnections of the traditional financial system and crypto markets could raise broader financial stability concerns,” Yellen said in a statement on recent market developments. “Going forward, it’s vital we do what is necessary to address these concerning risks and act to protect consumers and promote financial stability.”

Yellen’s statement comes after FTX filed for bankruptcy protection, sending waves through crypto markets. The troubled exchange had been valued at $32 billion at its peak in January. 

Regulators should “rigorously” enforce existing rules and Congress should “move quickly” to fill regulatory gaps identified by the Biden Administration, Yellen said. Yellen’s comments come after the Biden Administration released a series of reports on digital assets earlier in the fall.

“Some of the risks we identified in these reports, including commingling of customer assets, lack of transparency, and conflicts of interest, were at the center of the crypto market stresses observed over the past week,” Yellen said.

Lawmakers are already taking a closer look at FTX after the exchange collapsed following a run on its utility token. The House Financial Services Committee is planning a hearing next month, and “expects” to hear from former CEO Sam Bankman-Fried, among others, Committee Chair Maxine Waters said in a statement.

Despite the turmoil in the crypto markets, spillover into the broader financial markets has been limited, Yellen said. But the Treasury secretary noted a recent warning by the Financial Stability Oversight Council, which she chairs.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

EU lawmakers differ in their view on how the bloc’s upcoming crypto regulation would have cushioned the blow from FTX’s collapse.

The effects of FTX’s filing for bankruptcy protection are rippling through the crypto industry. Other firms with exposure to the crypto giant are tumbling over. On Tuesday, crypto lending firm BlockFi prepared to file for bankruptcy protection too. Today, Genesis halted withdrawals. 

Some EU officials believe the Markets in Crypto Assets regulation — expected to be implemented by 2024 — would strongly protect EU citizens from the FTX ricochet. Others are less certain.

“I don’t see exactly how MiCA would be able to fully stop or prevent this,” Ondrej Kovarik, center-right member of the European Parliament (MEP) who was a co-legislator on MiCA, told The Block in an interview. 

“I can imagine that some aspects of it would be mitigated or some or alleviated,” he said, but added: “It would be too simple to just to say that only crypto asset regulation would solve this.”

The MiCA framework outlines licensing processes for crypto service providers, like exchanges, to operate within the EU. It includes requirements on risk management, segregation of client and firm funds, prudential requirements, and the disclosure of conflict of interest — all of which could be relevant in addressing mishaps leading up to FTX’s collapse. The exact details still need to be fleshed out by Europe’s financial regulators. 

While MEP Stefan Berger, who was the Parliament’s main negotiator on the crypto laws, previously told The Block that “MiCA is the bulwark against Lehman Brothers moments such as the FTX case,” Kovarik is more reserved.

The issue is broader than just crypto, according to Kovarik. “The real causes of the crash lie also somewhere else than what a crypto asset regulation can actually cover.”

The Czech MEP pointed out that the developing story in the crypto world is not limited to just one exchange. “We are talking about quite a high number of companies that were operating together. And that’s quite a broad financial services ecosystem.”

Kovarik highlights that policymakers need time to see how the story plays out. “We should first analyze what exactly happened in this case and whether this is something that can be fully resolved by only adjusting the regulatory framework on crypto assets.”

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Singapore-based crypto exchange Bitget has started operating in Brazil, financial publication InfoMoney reported. 

Bitget will start enabling deposits in Brazilian reais today, InfoMoney said. The exchange will accept deposits through Brazil’s popular public instant payment system, Pix. It plans to start offering withdrawals in Brazil on Nov. 30.

The exchange will not offer derivatives products in Brazil, as the country’s securities and exchange commission (CVM) requires special licenses for those services. 

Bitget currently operates in Argentina, Colombia, Mexico and Venezuela, InfoMoney reported. The company says it has more than 2 million users in 50 countries. The exchange plans to increase its headcount to 1,000 employees by the end of the year, despite volatile market conditions. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Binance’s role in the sudden collapse of FTX, an event that sent reverberations around crypto markets, has come under congressional scrutiny, a senior House Republican confirmed to The Block.

“This is serious. I think that this is a major event,” Rep. Patrick McHenry, R-N.C., told The Block while acknowledging that Binance’s role in the sudden meltdown will be one of the focuses of a December hearing announced this morning. 

The North Carolina Republican — the likely next chairman of the House Financial Services Committee — referred to a widely circulated internet meme that used footage from television show “The Office” to highlight the role public comments made by Binance CEO Changpeng “CZ” Zhao played in FTX’s sharp decline. 

FTX filed for Chapter 11 bankruptcy protection on Nov. 11.

In separate remarks to reporters, McHenry demurred as to whether former FTX CEO Sam Bankman-Fried has agreed to appear at the hearing, or if the embattled crypto mogul would be subpoenaed. 

“The first step is a bipartisan call for a hearing,” the current ranking member of the House Financial Services Committee said. “We’re certainly going to prioritize this next Congress.”

McHenry told reporters that Committee Chair Maxine Waters, D-Calif., has similar concerns to his over the crypto meltdown. “It’s a bipartisan call. We’re going to work together on who those witnesses are in the process forward.”

Asked if the FTX situation added urgency to negotiations around stablecoin legislation for a possible lame duck passage before the end of the current Congress in early January, McHenry said that was up to Waters as chair. 

“Chairwoman Waters and I have had fruitful conversation and have worked significantly to come to terms there, and I think we understand each other a lot better,” said McHenry. “The issue of what a stablecoin is, we’re clearly aligned,” as well as on other major issues within the legislation, he continued. 

But he added that the FTX collapse lent urgency to additional legislation around defining digital assets and regulate centralized exchanges. 

“We’ve had these conversations about what I think are the second-, third-, and fourth-order decisions that we have to make as a committee to bring clarity,” McHenry said. “So I believe the first step here is you have to have clarity around what is a digital asset. And that means making a clear legal distinction here.”

Binance has denied any direct role in FTX’s downfall. The company argued that the cause of FTX’s failure were financial irregularities and possible fraud in written comments to a UK parliamentary committee that asked for details of the crypto exchange’s role in their rival’s collapse. 

With additional reporting by Benjamin Robertson

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Billionaire Elon Musk said he will likely find a different executive to run the social media platform he’s owned less than month, according to The Wall Street Journal. 

 

“I expect to reduce my time at Twitter and find somebody else to run Twitter over time,” said Musk, according to the report. Musk, who is also CEO of Tesla, a much larger company, added that overseeing Twitter had been taking up most of his time in recent weeks. Some Tesla engineers have been helping at Twitter “on a voluntary basis,” he said. 

 

After taking over Twitter Musk assumed the role of CEO and the company’s sole director after firing a host of executives. He has fired employees who have criticized him, according to The New York Times, while also emailing remaining staffers to expect to work “long hours” if they want to keep their job.  

 

After a roller-coaster ride, which included Musk trying to back out of purchasing the social media platform, the executive has attempted to make his mark at a rapid clip as he attempts to reverse Twitter’s fortunes and boost revenues. Both business leaders and advertisers have demonstrated skepticism as to whether the oftentimes celebrated entrepreneur can breathe new life into Twitter or will instead cause its downfall.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Three Arrows Capital co-founder Kyle Davies said that “FTX, Alameda colluded to trade against clients” and “hunted” his company.

“As their biggest client, we, 3AC, were hunted and our positions liquidated,” Davies said on CNBC earlier today. “Recent employees of FTX are bragging about hunting and liquidating our position.” 

CNBC said it had a statement from FTX founder Sam Bankman-Fried, who responded, “I’m shocked. 100% disagree … there’s no truth to their allegations here.”  

The claims come after months of silence from 3AC, which filed for bankruptcy protection in July after its cryptocurrency bets went south. FTX filed for bankruptcy protection on Nov. 11 after a run on its FTT token and the revelation that it had lent billions to its sister company Alameda Trading.

Stop hunting is a trading strategy that attempts to force market participants out of a position by driving the price of an asset to a level where a trader would have to exercise a stop-loss order. While the strategy is commonly used by proprietary trading firms like Alameda, access to insider information — such as the specifics of a position held on an exchange — would provide a competitive edge.  

Davies suggested that while FTX and Alameda are different firms, it’s becoming clear that they “shared information” and that they were “sitting in the same room.” 

“In non-crypto companies, this is just not the way it’s done,” he said. “There’s a clear segregation between an exchange and any kind of proprietary trading firms.” 

Davies’ argument suggests that FTX employees shared the details of 3AC’s positions with traders at Alameda and then used this information to trade against them and force a stop-loss order. 

Davies says that with time the truth will emerge. “We’ll find out the truth,” Davies said. “And we’re looking forward to justice.”

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Gemini’s crypto exchange is offline. The outage is affecting a number of services, including its trading engine and fiat deposits and withdrawals, among other areas.

“Gemini is investigating reports of potential service disruptions. All customer accounts and funds remain completely secure. Further updates to follow,” Gemini wrote in a status update at 11:33 a.m. ET.

At 11:40 a.m. ET, Genesis said: “We are continuing to investigate this issue.”

Several hours earlier, Gemini announced that its Earn unit will be unable to meet customer redemptions in the service-level agreement’s time frame of five days following the disclosure by Genesis Global Capital that it halted withdrawals and new loan originations Wednesday. 

“We will continue to work with them on behalf of all Earn customers. This is our highest priority. We greatly appreciate your patience,” Gemini said.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.