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FTX Digital Markets, the Bahamas-based subsidiary of collapsed crypto exchange FTX, filed for Chapter 15 bankruptcy protection on Tuesday in the Southern District Court of New York.

The filing comes a day after the Supreme Court of the Bahamas approved provisional liquidators to oversee FTX Digital’s assets. Brian Simms of Lennox Paton was appointed as court-supervised provisional liquidator and Kevin Cambridge and Peter Greaves of PricewaterhouseCoopers were appointed as joint provisional liquidators.

“In compliance with section 1515(c) of the Bankruptcy Code, I hereby declare that, to my knowledge, the only foreign proceeding (as such term is defined in section 101(23) of the Bankruptcy Code) pending with respect to FTX Digital is the Bahamian Liquidation,” the filing, submitted by Warren Gluck of Holland & Knight LLP, counsel for the joint provisional liquidators of FTX Digital Markets, reads.

The Chapter 15 filing comes four days after FTX Trading and 134 other affiliates and subsidiaries (FTX Group) filed for Chapter 11 bankruptcy protection in the District Court of Delaware. Chapter 15 filing allows a foreign debtor to file for bankruptcy protection in the U.S. court system.

FTX Group collapsed last week amid a sudden liquidity crisis. The crypto exchange reportedly tapped customer assets to fund risky bets by its affiliated trading firm, Alameda Research, setting up its implosion. Last week, the Securities Commission of the Bahamas froze the assets of FTX Digital Markets and also suspended the firm’s registration.

The commission is also working closely with financial investigators to see if any criminal misconduct occurred at the company.

Despite bankruptcy protection filings and investigations, Sam Bankman-Fried, former CEO of FTX, still wants to raise funds. “So what can I try to do? Raise liquidity, make customers whole, and restart,” Bankman-Fried tweeted today. He said he may fail, but added, “part of me thinks I might get somewhere.”

© 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 crypto wallet connected to the suspected drain of FTX accounts swapped a total of 34,000 BNB for 4,500 ether (ETH) and three million Binance USD (BUSD) this morning. It is now the 34th largest holder of ether.

Yesterday, the same wallet swapped large amounts of the decentralized stablecoin dai for ether in a series of multimillion-dollar trades. The wallet currently holds at least $322 million in cryptocurrencies — 87.5% of which is ether.

The perpetrator has also been moving funds between their wallets. They consolidated $5.1 million of ETH and $3.3 million of ETH from two other wallets into their main wallet where the majority of the ether lies.

The source of these funds originated from the failed crypto exchange FTX. The transfers, which some speculate were a hack or an inside job, have been specifically noted in the latest court filings for its Chapter 11 bankruptcy protection.

© 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 has secured permission from regulators in Abu Dhabi to operate as a crypto custodian for institutional clients.

The crypto exchange received the regulatory nod from Abu Dhabi’s Financial Services Regulatory Authority. This body is a unit of the Abu Dhabi Global Market, which functions as the financial center of the United Arab Emirate’s capital city.

Binance previously received in-principle approval from Abu Dhabi authorities to operate as a crypto broker-dealer. Wednesday’s regulatory nod expands the company’s presence in the UAE and the Persian Gulf at large. The exchange giant also has license approval from regulators in Dubai, UAE’s commercial capital.

Binance’s operations in the UAE and the Persian Gulf are under a subsidiary called Binance AD. Dominic Longman, senior executive officer at Binance AD, called the license approval a “pivotal step” for the company’s growth in Abu Dhabi. Longman also praised what he called “the city’s progressive stance” on crypto and digital 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.

Episode 113 of Season 4 of The Scoop was recorded live with The Block’s Frank Chaparro and Roubini Macro Associates Chairman and CEO, Nouriel Roubini.

Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher or wherever you listen to podcasts. Email feedback and revision requests can be sent to podcast@theblockcrypto.com.

Nouriel Roubini, the economist and professor who forecasted the housing collapse of 2008, is back with a new prediction for the global economy.

In his new book, Megathreats: Ten Dangerous Trends That Imperil Our Future, And How to Survive Them, Roubini examines a series of interconnected phenomena that he believes could lead to disaster if left unchecked.

In the first part of this two-part macro special of The Scoop, Roubini lays out the thesis for his new book and explains why he believes the world is on course for the most adverse macroeconomic conditions of the last century.

Key to Roubini’s new theory is the idea that since the threats our society is facing are all interconnected, their combined effects will be far-reaching:  

“Unfortunately, there are severe ‘megathreats’ that imperil not only our jobs, our income, our savings, our wealth, but they imperil the planet, and even peace and prosperity.”

As an example of how these threats are related, Nouriel explains how if the economy were to enter stagflation, it would be combined with an unprecedented amount of debt:

“We’re going to face not only inflation, not only recession, not only stagflation, but a stagflationary debt crisis — what I call in the book, ‘the mother of all debt crises,’ — because the level of private and public debt as a share of GDP is at an all-time high.”

During this episode Chaparro and Roubini also discuss:

• Why geopolitical tension is likely to increase
• How AI will impact the labor market
• When central banks will ‘wimp out’ on raising rates

This episode is brought to you by our sponsors Tron, Ledn

About Tron
TRON is dedicated to accelerating the decentralization of the internet via blockchain technology and decentralized applications (dApps). Founded in September 2017 by H.E. Justin Sun, the TRON network has continued to deliver impressive achievements since MainNet launch in May 2018. July 2018 also marked the ecosystem integration of BitTorrent, a pioneer in decentralized web3 services boasting over 100 million monthly active users. The TRON network completed full decentralization in December 2021 and is now a community-governed DAO. | TRONDAO | Twitter | Discord |

About Ledn
Ledn was founded on the unshakeable conviction that digital assets have the power to democratize access to the global economy. We help you to experience the real life benefits of your Bitcoin without having to sell it. Start a savings account, take out a loan, or double your Bitcoin. For more information visit Ledn.io

© 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.

Sam Bankman-Fried, former CEO of beleaguered crypto exchange FTX, is still tweeting.

In the latest installments of a puzzling series of posts on Twitter, Bankman-Fried said that “too much leverage” and a run on the bank scenario were to blame for FTX’s collapse.

“So what can I try to do? Raise liquidity, make customers whole, and restart,” Bankman-Fried wrote. He said he may fail, but added, “part of me thinks I might get somewhere.”

The tweets will raise many an eyebrow given that FTX filed for Chapter 11 bankruptcy protection last week and may have more than a million creditors — not to mention the fact that Bankman-Fried is no longer CEO after resigning on Nov. 11, and reports that sister company Alameda Research used FTX customer funds for risky bets. Many Twitter users responded to Bankman-Fried’s latest statements derisively. 

Bankman-Fried did not immediately respond to questions about how he planned to raise liquidity.

The Wall Street Journal reported earlier today that Bankman-Fried is trying to raise capital despite the bankruptcy filing, citing people familiar with the matter.

Bankman-Fried’s latest tweets extend a bizarre Twitter thread that began on Nov. 14.

© 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.

Former President Donald Trump is running to reclaim his old job, the Republican announced after months of openly flirting with another run. 

“In order to make America great and glorious again, I am tonight announcing my candidacy for president of the United States,” Trump said during an event at Mar-a-Lago, his club in Florida. 

Trump will challenge President Joe Biden for a second time, after losing to the Democrat in 2020. For nearly two years, Trump and his supporters have baselessly claimed the election was rigged. There is no evidence of widespread fraud in the 2020 election.

Trump and associates of his are under state and federal investigation over efforts to overturn the presidential election result. Trump himself has refused to comply with a congressional subpoena to testify about his role regarding the Jan. 6 Capitol riot. The former president also faces an investigation into the alleged mishandling of highly sensitive classified documents, which federal law enforcement found at the same club where he announced his latest presidential bid. 

The former president will likely begin a Republican primary as the de facto frontrunner, though an increasing number of elected Republicans have called for the party to move on after an underwhelming midterm outcome for the party. Candidates who tied themselves particularly closely to Trump and his stolen election falsehood especially underperformed.

“I think he had a significant impact on the underperformance of the Republican Party,” Sen. Cynthia Lummis, R-Wyo., told reporters on Monday. “I would say this: in my opinion the current leader of the Republican Party is Ron DeSantis.”

It is not clear what a second Trump term could mean for the crypto industry. Trump said he was “not a fan” of bitcoin or other cryptocurrencies in 2019, and has more recently called the tech a “scam.” But since leaving government at the end of the administration, former senior financial regulators appointed by Trump have gone on to work for digital asset companies, including former Acting Comptroller of the Currency Brian Brooks and former Consumer Financial Protection Bureau Director Kathy Kraninger. 

Mainstream conservative groups have also become more active in the crypto world since Trump left office. The conservative Club for Growth recently launched two crypto-branded super PACs, which can raise and spend unlimited funds. The group endorsed Trump in 2016 and 2020.

TrumpCoin, a memecoin that uses the ex-president’s name, was up 10% over the last week, as news reports suggested he was close to entering the 2024 presidential race. The Trump family threatened legal action against the coin earlier this year.

With additional reporting from Kollen Post.

© 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.

Coinbase CEO Brian Armstrong sold more than 30,000 Class A Coinbase shares for $1.6 million on Nov. 11, according to a filing with the U.S. Securities and Exchange Commission reported by Coinbase. 

He also converted Class B shares into Class A shares. 

Coinbase shares were trading over $340 when the company first went public in April 2021. They closed today at $55.53 as crypto prices have shed their value over the past year, alongside many traditional 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.

Prior to the fall of FTX, Ethereum’s shift to proof-of-stake was all the rage in crypto circles. Two months removed from The Merge, Ethereum is still playing catch-up with more mature staking networks like Cosmos and Polkadot, but Kraken’s Tim Ogilvie thinks that’s about to change.

“It’s going to just be an absolute rocket ship as you get closer and closer to when withdrawals are enabled,” Ogilvie, Kraken’s Head of Staked, told The Block in an interview, adding that a big transition will be seen as “a huge number of assets are likely to get staked over the course of the next six to nine months.”

When Ogilvie started Staked at Kraken five years ago, a number of questions about staking remained unanswered in terms of security and whether the mechanism would work. Today the platform hosts up to $63 billion in staked assets generating $5 billion in annuitized rewards, according to a company report.

Staking revenue percentages on Ethereum have climbed since the network’s change in consensus models, data from The Block Research show.

Staking market cultivation

The growth in the staking market took years to cultivate. Initial participants grappled over unknowns regarding returns and exact parameters on when staked assets would become available again, if ever. These factors, conflated with risks associated with a potentially exploited smart contract that might be either locked or drained by a hacker, made it difficult for anyone to stake 100% of their assets outside of die-hard crypto natives, Ogilvie said.

Driven by confidence in PoS following the success of The Merge, Ogilvie’s conversations in retail and institutional circles now reveal excitement. “You know, Kraken has a big retail base that uses the customer offering. Staked and Kraken both have a lot of big institutional clients,” he said, noting that on both sides of the coin, “everybody’s fired up about ETH.”

For an ecosystem closely watching the fall of Sam Bankman-Fried’s FTX empire, staking may be even more attractive, said Ogilvie. He thinks that the industry rises in waves that occasionally wash out players.

“A lot of what I’ve seen happen in these cycles is you get four or five people come in and two or three of them leave in the ensuing crash,” said Ogilvie, pointing out that situations are made worse when centralized funds like FTX, as well as Celsius, Voyager and Blockfi, “are playing with customer funds in a way that people shouldn’t have trusted them to do.”

Kraken had no material exposure to FTX or FTT from a core business standpoint, according to Ogilvie, who added that the resonating impact of FTX’s collapse is likely to be felt industry-wide.

In terms of the staking industry at large however, “most funds and institutions in crypto have gotten comfortable that staking is a pretty manageable risk,” Ogilvie 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.

New York’s head financial services regulator wants Congress to look at her state’s rules around crypto when thinking about a national model and warned against federal laws overriding state regimes. 

“When we go to the Hill, we say we want there to be a state path,” said Adrienne Harris, the New York Department of Financial Service’s superintendent. “We would like for there to be a framework nationally that looks like what New York has, because I think it is proving itself to be a very robust and sustainable regime.”

Harris particularly noted concerns that federal legislation could preempt, or override state regulatory regimes during her appearance today at the Brookings Institution in Washington, D.C.

The recent collapse of FTX hung over the entire event, which also included public remarks by Peter Marton, the NYDFS’ virtual currency chief. FTX.US, notably, never got a BitLicense and consequently couldn’t legally operate in New York.

“They had an application pending, which they noted publicly. And it was pending,” Harris said, when asked about FTX.US’ status by Aaron Klein, a Brookings senior fellow. 

“I want to acknowledge first and foremost that FTX.US was not operating in New York,” said Marton, the NYDFS’ virtual currency chief, in a separate panel. 

The NYDFS BitLicense regime is one of the most stringent in the country, making it a frequent subject of criticism from industry.

Recent proposals for federal regulatory changes around digital assets include developing a federal payments license, instead of the current state-by-state money transmitter licensing that firms, including crypto firms, have to follow. Senators have also proposed greater federal power over exchanges facilitating trades of bitcoin and other virtual assets that could be labelled as digital commodities. Those proposals may allow at least some crypto companies to go to a federal license instead of state licensing like the BitLicense. 

Dennis Kelleher, president and CEO of Better Markets, criticized crypto lobbying in Washington, D.C., saying “the crypto industry has been banging on the door using their political allies as battering rams, to smash the regulators.” He added that FTX and others pushing for a greater role in crypto regulation for the Commodity Futures Trading Commission were  trying to “buy the weakest regulator they could capture.”

© 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.

DeFi prime brokerage Oxygen said FTX acted as the custodian for the majority of the tokens on its ecosystems, adding that it has sought legal help.

“Whilst FTX Group did not hold any equity in the MAPS or Oxygen businesses, it did hold a significant proportion of MAPS/OXY tokens,” Oxygen said in a Twitter thread. “It also acted as custodian for over 95% of the overall supply of our ecosystem tokens — both locked and unlocked.”

Oxygen is built on Solana and uses on-chain infrastructure called Serum. OXY refers to the governance token for the Oxygen prime brokerage protocol, while MAPS is the token used for the second version of offline mobile mapping app Maps.me, which announced an integration with Oxygen in 2021. 

FTX’s sister trading firm Alameda Research led a $40m investment in Oxygen in February 2021, with participation from Multicoin Capital, Genesis Capital and CMS.

Retained legal advisors

Oxygen, which said it was “shocked” by the events surrounding FTX’s bankruptcy proceedings.

“We are considering all options on how to protect the MAPS & OXY ecosystems and have retained legal advisors to assist with this ongoing process,” Oxygen said. 

Former FTX CEO Sam Bankman-Fried told The Block in February 2021 that Oxygen was “a lot less white glove than traditional prime brokerage, that’s sort of how crypto is.”

Maps.me made its last Twitter post on Oct. 3.

© 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.