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Binance CEO Changpeng “CZ” Zhao said he wants to set up an association of the largest crypto players to help work with policymakers and regulators worldwide. 

“The association will try to maintain communication with regulators and also maintain best practices in the industry, including proof of reserves, transparency,” Zhao said on a Twitter Spaces event that hosted over 40,000 listeners.

The association would not be run by Binance, Zhao said, adding that it would be a third-party that “has done this many times for different industries.” The Binance chief said that multiple regulators had requested that he set up such an association. 

“We will also try to act as a point of communication on policy, thought leadership, commenting on the pros and cons of certain policies,” he said. 

Earlier on Monday, Binance announced it would put together a recovery fund that could help to alleviate some of the pain inflicted on the industry after FTX filed for bankruptcy protection last week. Four or five funders already expressed interest, Zhao said. 

While Zhao said he was optimistic despite the trying times, he acknowledged the role he had played in the market downturn.

“As much as people blame me for whistleblowing or poking the bubble or whatever […] I apologize for any turmoil that I caused, ” he said. “But if there is a problem, the earlier we reveal it, the better.”

FTX’s troubles took a turn for the worse on Nov. 6, when Zhao first said that Binance would sell its holdings of FTX’s native token.

“We will try to achieve a good balance between whistleblowing, causing panic, causing prices to drop, and building a healthy industry and cleaning out the bad players,” Zhao 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.

Crypto lending firm BlockFi said it would continue to pause many of its platform activities “for now” after FTX filed for bankruptcy protection last week.

“The rumors that a majority of BlockFi assets are custodied at FTX are false,” the company said in a blog post, adding that it did have “significant exposure to FTX and associated corporate entities.”

BlockFi announced late last week that it had paused withdrawals. Just days before, as Binance weighed buying FTX, BlockFi said its products were “fully functional.” 

The company asked clients not to submit any deposits to BlockFi Wallet or Interest accounts. 

“There are a number of scenarios that may be available to us, and we are doing the work now to determine the best path forward,” the company said. “BlockFi has the necessary liquidity to explore all options and we have engaged expert outside advisors that are helping us navigate BlockFi’s next steps.”

BlockFi customers expressed dismay and confusion in the wake of last week’s announcement, The Block previously reported.

© 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.

Sports brand Nike already is one of the most successful brands in web3. Now, it’s going to promote virtual shoes and other items on its own platform.

Currently in beta but expected to launch its first digital collection next year, .Swoosh (pronounced “dot swoosh”) will let Nike fans to collect and even co-create virtual items with the company.

Community members will “soon” be able to wear the items in digital games and immersive experiences, according to a company statement. 

“We are shaping a marketplace of the future with an accessible platform for the web3-curious. In this new space, the .Swoosh community and Nike can create, share and benefit together,” said Ron Faris, GM of Nike Virtual Studios.

So far, Nike’s bet on web3 has paid off.

It launched an experience in November 2021 on the ever more brand-crowded gaming platform Roblox, attracting more than 26 million visits to date. The following month it acquired NFT studio RTFKT and has been pumping out collections ever since.

Among them, the Cryptokicks collection of 20,000 virtual sneakers included one NFT that sold for $134,000.

Nike has earned a total of $185 million in NFT revenue, according to data published on Dune Analytics. Of that, $93 million came from primary sales revenue and $92 million from royalties. 

The numbers alone make other metaverse-keen brands pale in comparison. Dolce & Gabbana has raked in NFT revenues of $24 million, while Tiffany has earned $13 million. 

But the same data set also suggests Nike has been impacted by both the bear market and the rise of optional royalties. Revenue has plummeted from the highs it enjoyed prior to its peak in April 2022. 

Source: Kingjames23 via Dune.

Nike’s top offering, the popular CloneX NFT collection, accounts for a large proportion of RTKFT’s NFT revenues, making up 64% of royalty income as of Nov. 1. 

Source: Kingjames23 via Dune.

© 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.

Quick Take

• Liquid staking and superfluid staking are some of the typical methods to improve the capital efficiency of staking.
• Cross-staking enables the same capital to be staked simultaneously over a theoretically infinite number of venues. 
• The Avalanche network is a prime example of cross-staking, although such feature is not widely utilized currently.
• EigenLayer could bring cross-staking to Ethereum without modifying the base layer, where staked ether can also be used to secure other protocols simultaneously.

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Ikigai Asset Management, a Puerto Rico-based crypto asset management startup, held a “large majority” of its assets on FTX and was not able to withdraw much of those assets after the exchange filed for bankruptcy protection on Friday. 

“We’re now stuck alongside everyone else,” Chief Investment Officer Travis Kling wrote in a thread on Twitter. “It was entirely my fault and not anyone else’s. I lost my investors’ money after they put faith in me to manage risk and I am truly sorry for that.”

Kling said that the firm will continue trading its remaining assets and that it will make a decision about what to do with its venture fund, which was not affected by the FTX collapse. He said the timeline for potential recovery for FTX customers will become clearer over the coming weeks and months.

Ikigai said in May it had raised $30 million for a web3-focused venture fund. 

“If crypto is to recover and continue on its journey to make the world a better place, I believe the entire concept of trust has to be completely rearchitected,” Kling said, referencing “sociopaths” in the industry he said had been able to do so much damage that it was hard for him to image the space bouncing back quickly.

“I have publicly endorsed FTX many times and I am truly sorry for that. I was wrong,” he 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.

Payments company Visa has terminated its partnership with FTX amid the cryptocurrency exchange’s ongoing collapse. 

“The situation with FTX is unfortunate and we are monitoring developments closely,” a Visa spokesperson told The Block. “We have terminated our global agreements with FTX and their U.S. debit card program is being wound down by their issuer.”

In October, the cryptocurrency exchange announced that it was launching a Visa debit card in more than 40 countries, rolling out in Latin America to start.

“We’re excited to partner with leading crypto exchanges like FTX to bring more flexibility and ease-of-use to the way people use their crypto — unlocking the ability to use a crypto balance to fund purchases anywhere Visa is accepted,” said Visa head of crypto Cuy Sheffield in a statement at the time. 

Other companies have also sought to distance themselves from the embattled cryptocurrency exchange after last week’s events, which culminated in FTX filing for 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 CEO Changpeng “CZ” Zhao assured over 40,000 Twitter Spaces listeners that the platform’s finances are safe following a week of turmoil at rival exchange FTX. Nonetheless, he noted that “nothing is risk free” and that “crypto exchanges are inherently risky businesses.”

While there was a noticeable increase in withdrawals on the platform in the leadup to and aftermath of FTX’s filing for bankruptcy protection, Zhao said it was within a normal range that usually follow price drops. He said that even if everyone withdraws funds from exchanges, “we have many other profitable businesses. It’s fine.”

“If people want to withdraw their funds, they should,” Zhao said. “We don’t block the funds. It doesn’t cause us any problems.” 

Binance has joined a wave of major exchanges sharing wallet addresses holding reserve funds to encourage transparency after FTX’s chaotic week that resulted in filing for bankruptcy on Friday. Former FTX CEO Sam Bankman-Fried had insisted the U.S. arm of his company was “FINE!” just one day before it filed for bankruptcy protection.

Zhao said that external auditor reports would be published in the coming weeks with further details in addition to the reserve data already posted. 

“We run a very simple business,” he said, adding that Binance was operating without any loans, venture capital investments or debt. Zhao also said that the exchange doesn’t lend out client assets externally. While the exchange’s margin program does lend out funds from user savings products to margin traders, the risk management system in place assures that funds never leave the platform.

© 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.

U.S. law enforcement officials directed Paxos on Saturday to freeze assets previously held on FTX.

Paxos, a regulated blockchain infrastructure platform, froze 11,184.38 PAXG tokens valued at roughly $19 million. The tokens had moved from FTX.com to unknown wallet addresses over the prior 24 hours.  

“Earlier today, Paxos received direction from U.S. Federal Law enforcement to freeze Paxos-issued assets associated with four ethereum addresses,” Paxos said in a blog post. 

Paxos Gold is a gold-backed digital asset issued by Paxos. The asset has a market capitalization of about $525 million, according to CoinGecko data. 

The blockchain wallet activity is viewable at the following addresses:

• 0x59ABf3837Fa962d6853b4Cc0a19513AA031fd32b 
• 0xc40aBF7E6499694ea6F965Df96e39E51305E019a 
• 0x5Ea8132c16d6FA409c65D48c5e093a0dfFa0d253 
• 0x9c43CBfC046889159d4D53E0069737a7A142a369 

Paxos said it will continue to work closely with law enforcement and regulators. FTX filed for bankruptcy protection on Friday.

© 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 wallet known to be associated with Ethereum founder Vitalik Buterin sold 3,000 ether early Saturday, less than 24 hours after crypto exchange FTX filed for bankruptcy protection, according to Etherscan.

The ether was sold in three separate transactions on Uniswap at a price of $1,254.95, which would value the total outflow at about $3.8 million. The price of ether has declined 21% over the past week amid a broad selloff triggered by the FTX unraveling and is currently trading at $1,249.43, according to CoinGecko.

Buterin, who made his first direct comments on FTX’s collapse late Friday, accused former CEO Sam Bankman-Fried of “virtue signaling.”

“SBF the public figure deserves what it’s getting and it’s even healthy to have a good dunking session to reaffirm important community values,” he wrote on Twitter late Saturday. “Sam the human being deserves love, and I hope he has friends and family that can give it to him.”

© 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 FTX last week will trigger significant market structure changes, namely moving away from a model of all-in-one platform centralization, crypto trading firm Cumberland said.

The various functions of crypto spot trading have been trending toward a model of all-in-one platform centralization, Cumberland’s Head of Trading Jonah Van Bourg said on Twitter today. Van Bourg was referring specifically to liquidity, clearing, settlement, custody and lending. These functions were “coalescing under a very limited number of roofs.” 

Centralized exchanges had many incentives for pushing this all-in-one model. Van Bourg said that, in hindsight, some of these were “perverse.” 

Last week’s developments — the collapse of FTX and its eventual chapter 11 filing — triggered a “handbrake turn,” Van Bourg said. He added that the crypto market structure seems likely to mirror foreign exchange markets. Assets and capital aren’t left on centralized exchanges in foreign exchange markets. 

© 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.