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Crypto exchange Kraken, Bybit and Bitget made gains following the demise of rival exchange FTX, according to a report by blockchain analytics platform Nansen.

While the majority of crypto exchanges saw a decline in spot trading volumes over the six months post-FTX, Kraken and Bybit bucked the trend. Kraken is up 14.4% in average monthly trading volume to $18.9 billion, with Bybit up 7.65% to $18.2 billion. Binance remained the largest centralized exchange during the period, down marginally by -0.2% to $444 billion.

In terms of derivatives trading, Bitget saw its average monthly volumes grow by 4.85% to $204 billion in the six months that followed FTX’s collapse. Again, Binance remains the most dominant exchange with $1.3 trillion in derivatives trading. However, its volumes have fallen 12.9% compared to pre-FTX.

Meanwhile, decentralized exchange trading volume remained relatively stable over the same period. 

Since the collapse of FTX, trading volumes across centralized exchanges experienced a general decline. This downturn can be attributed to three factors, according to Nansen: investor shock, the loss of trust in centralized exchanges prompting a shift towards decentralized alternatives and increased regulatory pressure on exchange platforms post-FTX. 

FTX’s collapse shook the cryptocurrency industry and eroded user confidence in centralized exchanges (CEXs). As a result, exchanges have pivoted their attention from product and market expansion to prioritizing financial solvency and security. This shift was driven by growing demand from users for transparency and enhanced protection measures, according to Nansen. 

To assure clients, centralized exchanges are now implementing proof of reserves, a measure that demonstrates the actual possession of claimed funds, injecting transparency into operations. However, many have criticized such measures, claiming they fail to reveal audited fiat reserves, client and company liabilities and other information to assess a firm’s financial health.

Protection funds are also meant to boost user confidence, serving as dedicated repositories to cover losses resulting from hacks or unforeseen events. Binance and Bitget are the only exchanges to disclose their protection fund wallet addresses. Notably, both platforms have increased their protection funds to $1 billion from $735 million and to $300 million from $200 million, respectively, Nansen said, leveraging its analysis of over 250 million labeled cryptocurrency wallets.

Nansen’s report also highlights the mounting challenges faced by CEXs due to increased legal requirements and regulatory scrutiny following the FTX collapse, exemplified by the U.S. Securities and Exchange Commission’s recent charges against Coinbase and Binance.

© 2023 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.

Traders will be able to analyze market data with the tool.

Once the so-called MVP license becomes operational, OKX Middle East will offer spot, derivatives, and fiat services, including U.S. dollar and UAE dirham deposits and withdrawals.

Losses on major tokens extended to over 7.4% in the past 24 hours, data shows.

The new filing is set to face legal opposition from borrowers.

In an unexpected turn of events, Tether’s USDT — the leading stablecoin with a staggering market capitalization of $83 billion — slightly de-pegged from its usual 1:1 ratio with the US dollar on the Curve decentralized exchange, presenting a unique arbitrage opportunity for savvy DeFi traders.

Liquidity pools on Curve and Uniswap have been overrun with USDT sellers, causing USDT to trade momentarily below $1 instead of its standard parity. Even more noteworthy is Curve Curve’s 3Pool, the top liquidity pool for USDT trading, becoming heavily imbalanced. In the pool, USDT’s balance increased to over 70% — suggesting that traders are selling it for the two other stablecoins: DAI and USDC.

Market participants reacted quickly to the de-peg, causing a significant increase in USDT borrowing from Aave, the top decentralized lending and borrowing protocol. Borrowers sold the devalued USDT for DAI or USDC — both of which held their standard 1:1 peg with the US dollar — on Curve’s 3pool.

One notable case was an Ethereum address known as czsamsun.eth, who, using 17,400 ETH ($28 million) and 14,690 stETH ($24 million) as collateral, borrowed $31.5 million USDT from Aave 2 and exchanged it for 31.47 million USDC at a rate of $0.997 on Curve.

The sudden de-pegging of USDT from the USD created a unique opportunity for these traders to profit from arbitrage — capitalizing on price differences between markets. In this case, the discrepancy between USDT’s lowered trading price and its typical dollar parity.

An address 0xd2, capitalized on the USDT de-peg in a big way. This address deposited 52,200 stETH ($85 million) through Aave V2 and borrowed $50 million USDC, swapping large sums of USDT at a discounted rate in batches. Here, the trader took advantage of the lower price of USDT to buy large quantities using borrowed USDC, which was still holding its 1:1 peg with the US dollar. In theory, if USDT returns to its 1:1 peg, the traders can sell their USDT at a profit, repay their borrowed USDC and pocket the difference.

In response to this sudden demand for USDT loans, Aave’s algorithmic model automatically adjusted its rates to maintain market equilibrium. The result was a significant rate hike, with the deposit rate soaring to over 15% and the borrowing rate increasing by over 25%.

© 2023 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.

Tether’s stablecoin, USDT, has de-pegged slightly as Curve’s 3Pool — one of the top pools for stablecoin trading in decentralized finance — became heavily imbalanced.

The ideal balance of the Curve 3Pool should be 33.33% for each of its three stablecoins — USDT, USDC and DAI — but USDT’s balance has increased to over 70%. That means traders are selling a lot of USDT for DAI or USDC, which has led to USDT de-pegging to $0.99.

Tether CTO: ‘Market is really tense’

“I think the market is really tense in general,” Tether CTO Paolo Ardoino told The Block.

“All recent news etc. are pushing big groups to exit from crypto markets. Tether is the gateway for liquidity, inbound and outbound. So when the interest in crypto grows, we see inflows; when the sentiment on the crypto market is negative, we see outflows. We can’t exclude a direct attack to Tether either, as we have seen in 2022,” Ardoino said.

The last time Curve 3Pool became imbalanced was in March when USDC and DAI’s balance increased to over 45% each. It also became imbalanced in November when crypto exchange FTX collapsed. A similar imbalance was also observed after the Terra ecosystem’s crash in May 2022, which saw USDT turn volatile and temporarily lose its peg.

Ardoino said Tether will monitor the situation, but it is “ready to redeem any amount.”

© 2023 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.

Apple has rejected the latest version of the Zeus app — a non-custodial Lightning Network-enabled Bitcoin wallet — a day after warning about removing another Bitcoin-related app, Damus.

“Your app facilitates the transmission of a virtual currency but was not submitted by a corresponding exchange or recognized financial institution,” Apple told Zeus, according to a tweet by Zeus founder Evan Kaloudis. “To resolve this issue, please provide documentary evidence demonstrating you have the necessary licenses and permissions to distribute an app with cryptocurrency exchange features in all the locations where your app is currently available.”

Zeus is in talks with Apple for approval, as the app does not provide crypto exchange features but facilities payments via a non-custodial wallet. “Being non-custodial should be easy to push back since the product is just a software interface,” according to Tether CTO Paolo Ardoino. The previous version of the Zeus app is still accessible in the App Store.

The news comes a day after Apple warned Damus to drop its “zaps” or Bitcoin tipping feature. Damus now has to remove the zaps functionality from all content sections and can maintain it at the profile level. Damus core developer William Casarin said he would resubmit with zaps in the future as he believes he is not violating any guidelines.

© 2023 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.

USDT holdings on Curve’s popular ‘3pool’ have risen to over 72% as of Thursday morning, suggesting a sudden disbalance.

Ignoring a subpoena warrants a fine of $10,000 per day, the estate of his hedge fund argues