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Beleaguered crypto exchange FTX is seeking to raise more than $9 billion to plug a financial shortfall, according to Reuters.

CEO Sam Bankman-Fried is looking to draw funds from numerous sources, including Tron founder Justin Sun and stablecoin issuer Tether, Reuters said, citing sources familiar with the matter. An array of investment firms, as well as crypto exchange OKX, are also said to be involved in discussions, according to Reuters, as well as investor Dan Loeb. 

Axios reported separately that crypto exchange Kraken has also been approached. 

News of a bailout effort followed Wednesday’s news that Binance would not move forward with a deal to acquire FTX. 

Earlier Thursday, Bankman-Fried indicated that a rescue package was being sought. “So, right now, we’re spending the week doing everything we can to raise liquidity,” he wrote in a Twitter thread, later adding: “There are a number of players who we are in talks with, LOIs, term sheets, etc.”

Reuters indicated that the process is slow-going. Bankman-Fried, according to the outlet, has resisted seeking bankruptcy protection amid FTX’s woes.

Reports emerged Thursday morning that FTX used customer funds to lend billions of dollars to sister company Alameda Research. In the earlier tweet thread, Bankman-Fried said that Alameda would be shuttered. 

© 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-related stocks rose, far outpacing the broader crypto market and slightly outpacing the S&P 500, following positive inflation data in the U.S and news that Ark Invest bought the Coinbase dip.

Coinbase shares gained 12%, trading at $51.90 at 11:51 a.m. ET, according to TradingView. Jack Dorsey’s Block rose 18%, while Silvergate is up 5%. Michael Saylor’s MicroStrategy rose 9%, despite the bitcoin price drop this week. The firm owns 130,000 bitcoin.

The S&P 500 rose 4% on Thursday, while the Nasdaq jumped nearly 6%. 

Shares in Coinbase had previously declined throughout the week from $60 at the open on Monday. The downward trend tracked movements in crypto, after rival exchange FTX’s woes have dragged the whole market down. 

Cathie’s Ark

Cathie Wood’s Ark Invest continued to add Coinbase shares to its portfolio this week, according to a company filing.

Ark added 207,527 Coinbase shares to its Ark Innovation ETF, 22,416 shares to Ark Next Generation Internet ETF, and 7,732 shares to the Ark Fintech Innovation ETF. The asset manager purchased 237,675 shares worth $10.9 million, based on the price at close on Wednesday of $45.90.

Ark Invest had already bought $21.3 million worth of Coinbase shares on Tuesday, bringing the total so far this week to over $32 million. Wood’s fund sold $9.9 million worth of Robinhood shares simultaneously.

© 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.

Layer 1 blockchain startup Aptos said it has partnered with Google Cloud in a move that will see the search giant power some of its validator nodes, among other services. 

Speaking at a panel at Token2049 in London, Aptos co-founder and CEO Mo Shaikh outlined the details of the tie-up alongside Simon Baksys, the go-to-market and business development lead for Google’s web3 division.

“I think the first time a web2 and a web3 company has come together in such a meaningful way,” Shaikh said.

Google Cloud will validate nodes and participate on the Aptos mainnet, Shaikh said. The Aptos blockchain will also be indexed and made available on Google Cloud’s BigQuery service. 

The partnership aims to encourage new talent, with Google and the Aptos Foundation set to launch an accelerator program as well as co-host a hackathon next year. The Aptos blockchain is already known for attracting Solana developers who had become tired of “eating glass” on Solana and were looking for a more intuitive way to program decentralized applications.

“It should really be interesting to see those two worlds collide and those projects that will be interested in using both Google tools as well as Aptos tools to produce something really cool,” Baksys said. “We’ll definitely be continuing our quote unquote world tour and engaging with the community together.”

What’s is Aptos?

Aptos, a new blockchain co-founded by Shaikh and Avery Ching, both of whom previously worked on Meta’s Diem project. 

The chain uses Move, a programming language that builds on top of Rust — the language used on the Solana blockchain. Move was developed by Meta for the Diem project.

The Aptos blockchain raised $350 million from investors this year including FTX Ventures, a16z and Multicoin Capital. It launched on mainnet a few weeks ago.

Aptos lead backer FTX Ventures is facing an uncertain future after its parent company crypto exchange FTX announced it was facing a  “liquidity crunch” earlier this week and that it would be acquired by rival exchange Binance. The deal with Binance fell through last night.

FTX Venture’s head of ventures Amy Wu appeared to be unaware of FTX’s CEO Sam Bankman-Fried’s strategy surrounding the venture arm writing “Truth. Need to update my LinkedIn” in response to a tweet thread that suggested FTX and Alameda were conducting a firesale of its venture holdings.

Google moves deeper into web3

Earlier this year, Google Cloud became Aptos’s inaugural cloud partner. The partnership enabled anyone to spin up a node on the Aptos network in less than 15 minutes, the company said at the time. The latest announcement is an extension of the partnership and comes almost a month following the blockchain company’s launch on mainnet.

Google Cloud formed a dedicated digital assets team earlier this year and has announced a number of partnerships with web3 companies so far.

From early 2023, Coinbase will enable select Google customers to pay for cloud services using crypto and Google will use Coinbase Prime for its institutional services. Google Cloud will also add support for Solana on its BigQuery platform starting next year, which will make it easier for developers to query Solana data.

The division also launched a blockchain-node hosting engine last month.

© 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 exchange FTX lent about $10 billion to sister company and trading firm Alameda Research, according to The Wall Street Journal.

The report, citing a conversation with CEO Sam Bankman-Fried and an investor, said FTX had more than $16 billion in customer assets.

Earlier Thursday, Reuters reported that FTX transferred at least $4 billion to Alameda. Bankman-Fried didn’t inform other executives about the transfer of funds to Alameda, Reuters also said.

Alameda is now shutting down, according to a tweet thread posted by Bankman-Fried. The CEO also said FTX will be “spending the week doing everything we can to raise liquidity” in order to repay customers. 

For the last few days, FTX has been the focal point of a financial storm roiling the crypto industry.

Earlier in the week, Changpeng Zhao, the CEO of Binance, said the exchange would begin selling off holdings of FTX’s token, FTT. Then, amid a flood of client withdrawals, FTX announced on Tuesday it planned to sell its non-U.S. assets to Binance.

The deal ultimately collapsed after Binance walked away, citing due diligence issues. 

© 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.

Beleaguered crypto exchange FTX appears to have begun processing withdrawals again, following a more than 48-hour shutdown.

Block explorer Etherscan shows that withdrawals began leaving the exchange again at around 11 a.m. ET. 

“Withdrawals coming in hot now — lots of folks getting out large sums,” said Andrew Thurman, head of content at crypto data provider Nansen, on Twitter.

The once mighty exchange giant collapsed this week following a run on its utility token, FTT. This came after Binance CEO Changpeng Zhao said his firm would sell its FTT holdings.

Following its collapse, Binance agreed to buy FTX.com, but changed its mind a day later and backed out of the deal.

FTX CEO Sam Bankman-Fried’s empire now appears to be on the brink, although he claims it has more assets than user deposits.

© 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.

Data warehousing platform Space and Time has joined chipmaker Nvidia’s startup program just over a month after raising a $20 million strategic funding round backed by Microsoft’s venture arm M12.

Nvidia Inception helps startups at the cutting edge of technological development in fields such as artificial intelligence, healthcare and smart cities to accelerate product adoption, as well as give them the opportunity to collaborate with industry-leading experts and AI-driven organizations.

Its member startups run the gamut from video editing software to a company that’s trying to build a 3D digital replica of the entire planet.

Space and Time aims to combine on-chain and off-chain data into a single platform to enable businesses to do enterprise-scale analytics and make fast transactions.

To do this, it uses a proprietary technology called Proof of SQL, for which it currently has a patent pending. SQL is a popular database programming language and the company’s technology allows users to run an SQL query on blockchain data.

Users and developers are able to connect analytics directly to smart contracts, opening up a new set of use cases and business logic for smart contracts.

© 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.

Japan’s financial regulators have ordered FTX’s Japan arm to suspend operations in the country. 

Citing FTX Japan’s suspension of crypto withdrawals, the Financial Services Agency (FSA) has designated it an entity lacking the infrastructure to carry out financial activities.

In particular, it has ordered FTX Japan to cease business operations and to hold assets in Japan equivalent to the liabilities on its balance sheet until Dec. 9. 

“It is necessary to take all possible measures to ensure that this does not lead to a situation where the company’s assets flow to foreign affiliates, etc. and the interests of creditors and investors are harmed,” said today’s announcement. 

The FSA also outlined a “business improvement plan” that must identify and protect FTX users and their holdings, ensuring the preservation of those assets and that users are correctly informed.

The regulator has ordered that the plan be submitted by Nov. 16, with an update on its progress and implementation on Dec. 10. 

On Tuesday, FTX’s international exchange halted withdrawals amid a liquidity crisis. The same day, FTX said it had agreed to be acquired by rival Binance. On Wednesday, after Binance reviewed FTX’s financials, the acquisition fell through. 

In events that followed, other regulators have weighed in on the crisis surrounding the company, including the U.S., with Gary Gensler today warning investors to “be careful.” 

Also today, FTX CEO Sam Bankman-Fried apologized for the collapse of the exchange and said that sister company Alameda Research will wind down trading.

© 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.

FTX has approached U.S.-based crypto exchange Kraken about a potential rescue deal, Axios reported, citing two people familiar with the matter. 

Details of the talks are unclear, and they could continue or fall apart, Axios said, adding that FTX and Kraken both declined to comment.

The news comes after Binance backed out of a deal to buy FTX.

© 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 European Parliament passed the Digital Operational Resilience Act, which creates new rules on cybersecurity for crypto asset service providers. 

The legislation passed by a margin of 556 in favor, and 18 against.

DORA is intended to harmonize risk management requirements and processes for reporting cybersecurity incidents. Financial institutions will be required to monitor and report security events, and tech service providers will be subject to oversight by European regulators.  

“Financial institutions and companies, including in the crypto space, hold extremely sensitive information about customers and it is vital that EU-wide digital security measures are put in place to defeat the threat that exists,” Frances Fitzgerald, a center-right member of the European Parliament who co-drafted the law, said in a statement. 

Regulations related to the law will take effect 24 months following its publication in the Official Journal of the EU, meaning the new law is anticipated to be fully enforced in 2025.

The Block previously reported that the month of October had the highest hacking activity for digital assets in a year. On top of that, hacks resulted in more than $3 billion losses across 125 breaches in 2021, according to analytics firm Chainalysis. 

“We need to implement stronger protections for our citizens. We do not want to see anyone’s personal financial information hacked,” Fitzgerald added. The MEP continued that DORA will “ensure that Europe will remain an important center for investment.”

DORA stems from the European Union’s 2020 package on digital finance, which includes the Markets in Crypto Assets bill, that sets out laws to regulate crypto assets and their service providers. The vote on MiCA has been postponed to February next year due to the lengthy translation process.

© 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 trading firm GSR told employees that the firm has no exposure to Alameda Research and “manageable exposure” to FTX following the crypto exchange’s collapse.

“We remain financially sound and are very much looking at this as an opportunity for the medium to long term,” CEO Jakob Palmstierna said in an email to employees, which he shared on Twitter.

FTX announced it was facing a liquidity crunch earlier this week and that it would be acquired by rival exchange Binance. The deal with Binance fell through Wednesday. Earlier today, FTX CEO Sam Bankman-Fried said that the firm would look to wind down Alameda. 

GSR’s exposure to FTX is limited to a single-digit percentage of the firm’s cash balance, he added. The firm will cover all client losses on FTX and will no longer trade on the crypto exchange Huobi, Palmstierna said.

Founded by former Goldman Sachs executives in 2013, GSR is one of the oldest market makers in crypto. GSR offers services from market making to over-the-counter trading and risk management services. The firm has also explored NFT market-making. 

GSR recently laid off less than 10% of staff following a rapid expansion last year.

© 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.