The news also affects the business of popular crypto exchange Gemini. Last week, it warned of major delays for users looking to withdraw their cash from its Earn product, which was in part serviced by funds borrowed from Genesis.
On Tuesday, Gemini tried to reassure its Earn customers:
1/5 Update for Earn customers: we continue to work with Genesis Global Capital, LLC (Genesis) — the lending partner of Earn — and its parent company Digital Currency Group, Inc. (DCG) to find a solution for Earn users to redeem their funds.
On a tangentially related note, two projects on Cardano both tweeted on Thursday that they were shuttering operations for similar (and similarly worded) reasons. The first was privacy and scalability solution Orbis:
Hey all of
Unfortunately due to constrained funding and uncertain conditions, Orbis Labs is unable to continue building and the project as come to a halt. This is unfortunate given the amazoing research and work that has been produced.
The other was “all-in-one decentralized stablecoin ecosystem” Ardana, aka the “DeFi Hub of Cardano”:
Hello Ardana community,
Unfortunately due to recent developments with regards to funding and project timeline uncertainty, the Ardana project has had to come to a halt. Our code will remain open source for builders to continue our work going forward as they wish.
One positive step for the industry after FTX is an increased interest in things like security, decentralization, and consumer protections. Certain businesses actually did well both during and after the catastrophe, including self-custodying solutions like cold wallet manufacturers and decentralized exchanges (DEXs).
Another thing consumers want from their centralized exchanges (CEXs) going forward is proof of reserves, and they certainly don’t want to see too much of the exchange’s funds being backed by tokens the exchange created itself, as was the case with FTX and its native token FTT. In light of this, KuCoin’s reserves are at the limits of acceptability, according to The Block Research:
KuCoin holds nearly one-fifth of its reserves in KCS, its own exchange token. Should this percentage start growing rapidly, it may become a cause for concern, just like how the illiquid FTT formed the bulk of FTX’s balance sheet. pic.twitter.com/DTvlqHihO7
Jesse Powell, the former CEO of Kraken, another popular CEX, laid down the law for transparent and secure reserves:
2/2 #ProofOfReserves audit must have: 1. sum of client liabilities (auditor must exclude negative balances) 2. user-verifiable cryptographic proof that each account was included in the sum 3. signatures proving that the custodian has control of the walletshttps://t.co/QEZo0DzJfw
Ethereum’s second most significant upgrade—after its recent transition to a proof-of-stake consensus mechanism—was considered for inclusion on Thursday, according to this announcement by core developer Tim Beiko, which was shared on Twitter.
Ethereum co-founder and inventor Vitalik Buterin called the proposal “amazing progress” and said ordinary users can expect massively lower fees going forward.
Thread summarizing amazing progress on EIP-4844 (proto-danksharding).
This is a crucial first step to massively lower fees on L2, helping to make it affordable for much larger numbers of users to directly use on-chain applications instead of relying on cefi intermediaries. https://t.co/cMeIAV5aN5
On Tuesday, several people noted a worrying and gigantic discrepancy with the U.S. dollar-pegged stablecoin Tether.
The following day, famous Chinese crypto investor Shen, who founded Fenbushi Capital in 2015—a company that describes itself as “the first-ever institutional crypto investor in Asia”—announced that hackers had looted him of $42 million in crypto a fortnight before.
A total of 42M worth of crypto assets, including 38M in USDC were stolen from my personal wallet ending in 894 in the early morning of November 10 EST.
The stolen assets are personal funds and do not affect on Fenbushi related entities.