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Legal professionals astonished as SBF admits failures, apologizes 12 times in interview

The former FTX CEO has offered multiple apologies and admitted failings at least a dozen times during the one-hour interview.

Former FTX CEO Sam Bankman-Fried apologized or admitted failure at least 12 times during his appearance at the New York Times’ DealBook Summit on Nov. 30. 

In a wide-ranging video interview, Bankman-Fried was asked to answer a number of questions surrounding the downfall of the now-defunct exchange, with some even suggesting that some of his statements could be used to incriminate him in legal proceedings.

In a Nov. 30 Twitter post, crypto attorney Jeremy Hogan, Partner at Hogan & Hogan said that the “light cross-examination” of Bankman-Fried at the DealBook Summit has already returned “at least 3 incriminating statements so far.”

SBF is getting a light cross-examination at the NYT/Dealbook Summit and has made at least 3 incriminating statements so far.

Why are his lawyers (or parents) letting him do this?? pic.twitter.com/Nd0poutAA0

— Jeremy Hogan (@attorneyjeremy1) November 30, 2022

Alan Rosca from the law firm Rosca Scarlato said it was “pretty astonishing that he’s in effect testifying at the DealBook summit. Hard to think of a precedent for this.”

Bankman-Fried’s first concession came while greeting interviewer Andrew Sorkin, when he said in reference to the collapse of FTX:

“Clearly, I made a lot of mistakes or things I would give anything to be able to do over again.”

An apology came moments later when Sorkin confronted him with a letter written by an FTX customer who lost $2 million in life savings after the exchange collapsed.

“I’m deeply sorry about what happened,” said Bankman-Fried in response to the customer’s story.

Former FTX CEO Sam Bankman-Fried during the hour-long live-video appearance. Source: New York Times’ DealBook Summit.

Later, when discussing the allegations that Alameda used FTX client funds to cover loans, Bankman-Fried said that while he “didn’t know exactly what was going on” at Alameda,” he concedes it was still his duty as FTX CEO to “make sure I was doing diligence.”

“A lot of these are things that I’ve learned over the last month that I learned […] I mark that as a pretty big oversight that I wasn’t more aware of,” he said.

Bankman-Fried admitted failure again when quizzed about FTXs former standing in the industry and the loss of trust in crypto now that the exchange has collapsed, stating: “I mean, like, look, I screwed up.”

“I was CEO, I was the CEO of FTX. And I mean I say this again and again, that that means I had a responsibility that means that I was responsible ultimately for doing the right things and I mean, we didn’t. Like, we messed up big.”

He continued to concede FTX’s failings, stating “there absolutely were management failures” oversight failures, and transparency failures.

Toward the end of the interview, Sorkin directly asked Bankman-Fried whether he had been truthful with the audience and whether he agreed that there had been times that he had lied. 

Bankman-Fried said he wasn’t aware of any times that he lied, but explained that there were times when asking as a representative or “marketer” for FTX, that he would paint FTX “as compelling […] as possible.”

“I wasn’t talking about what are the risks involved with FTX […] I obviously wish that I spent more time dwelling on the downsides and less time thinking about the upsides.

Related: ‘I never opened the code for FTX:’ SBF has long, candid talk with vlogger

Bankman Fried was asked what his lawyers are telling him at the moment, and whether it was a good idea for him to be speaking publicly. He answered “very much not.”

“I mean, you know, the classic advice, don’t say anything […] recede into a hole.”

Bankman-Fried said he believes he has a duty to talk to people and explain what happened and to “try and do what’s right.”

“I don’t see what good is accomplished by me just sitting locked in a room pretending the outside world doesn’t exist,” he explained.

‘Soft-balled it,’ says community

While the interview appeared to cover a number of confronting issues for Bankman-Fried, some in the community still believe that the questions were not challenging enough, nor was there an adequate follow-up to some of the hard-hitting questions.

A Twitter poll launched by a self-proclaimed crypto trader “Cantering Clark” found that more than half of the 1,119 respondents believed Sorkin “Soft-balled” the interview with Bankman-Fried.

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Crypto trading firm Auros Global misses DeFi payment due to FTX contagion

Auros is an algorithmic trading and market-making firm that provides liquidity for exchanges and token projects.

Crypto trading firm Auros Global appears to be suffering from FTX contagion after missing a principal repayment on a 2,400 Wrapped Ether (wETH) decentralized finance (DeFi) loan.

Institutional credit underwriter M11 Credit, which manages liquidity pools on Maple Finance, told its followers in a Nov. 30 Twitter thread that the Auros had missed a principal payment on the 2,400 wETH loan, which is worth in total around $3 million.

M11 Credit suggests that it is always in close communication with its borrowers, particularly after events in the last month, and said Auros is experiencing a “short-term liquidity issue as a result of the FTX insolvency.”

We remain committed to providing transparent updates whenever possible, and are working with Auros to provide a joint statement that provides further information to lenders.

If you have any questions, feel free to reach out at m11credit@maven11.com

5/5

— M11 Credit (@M11Credit) November 30, 2022

While Auros, an algorithmic trading and market-making firm, has not yet addressed the statement by M11 Credit, the thread has been retweeted by Maple Finance itself.

M11 Credit has also stressed that the missed payment does not mean the loan is in default. Instead, the missed payment has triggered a “5-day grace period as per the smart contracts.”

This implies that Auros has until Dec. 5 to make the late payment before it will be declared as being in default.

According to an official Maple Finance Youtube video, if a default occurs, it could result in the borrower’s collateral being liquidated and/or staked maple tokens and USDC on the platform being used to cover any shortfalls to lenders. Enforcement action could also be pursued through New York courts.

M11 credit claims that it is “working with Auros to provide a joint statement that provides further information to lenders.”

Cointelegraph has reached out to both M11 Credit and Auros for comment, but did not receive a reply before time of publication.

Crypto exchange FTX announced on Nov. 11 that it would file for Bankruptcy after having suffered a liquidity crisis and being unable to honor withdrawals. The resulting contagion has spread to numerous other firms. BlockFi declared bankruptcy on November 28.

Galois Capital and New Huo Technology have lost millions of dollars from FTX’s collapse, and Nestcoin has had to lay off workers because of its exposure to the failed exchange.

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Nifty News: Porsche 911 NFTs, BMW files Web3 trademarks, Baby Shark’s NFT game and more…

BMW and Porsche have both recently ramped up their own Web3 plays, while Baby Shark is dipping into the blockchain gaming sector, but just for kids.

Porsche to launch 7,500 NFTs for use in a ‘virtual world’

German luxury car manufacturer Porsche has suggested it will be significantly ramping up its Web3 efforts after unveiling an upcoming NFT project consisting of 7,500 customizable tokenized vehicles.

In a Nov. 29 announcement, Porsche stated that the NFTs will be launched in January, and users will be able to customize various aspects of the cars in relation to performance and appearance.

The NFT art itself is being designed by designer and 3D artist Patrick Vogel, with all pieces revolving around the famous Porsche 911 model.

Notably these virtual assets will be designed in Epic Games’ Unreal Engine 5, suggesting that gaming integrations are afoot.

NFT car designs: Porsche

The company gave a sneak peek into the project at the Art Basel conference in Miami on Nov. 30. While specific details have not been mentioned, the company noted that owners will be able to use the cars in the “virtual world,” most likely meaning some sort of Metaverse.

More broadly, Porsche suggested that it is looking to significantly ramp up its exposure to Web3 moving forward, with the announcement noting that:

“Digital art is just one aspect of Porsche’s Web3 strategy. The sports car manufacturer is working to integrate the potential of blockchain technology into existing and future processes and solutions.”

Porsche previously had a hand in launching soccer-themed NFT collectibles in June 2021 as part of a project called Fanzone, but now appears to be taking the tokenization of its cars more seriously.

BMW to get Web3 trademarks

Speaking of German luxury car manufacturers, BMW has reportedly applied to trademark its logo in relation to a host of Web3 products and services.

The move was highlighted by USPTO licensed trademark attorney Mike Kondoudis, who frequently shares news regarding Web3 trademark applications in the U.S. from major companies.

BMW outlined intentions for its logo to span across collectibles such as virtual clothing, footwear, headwear and vehicles, while also indicating plans for downloadable virtual goods such as online environments and games.

BMW is coming to the metaverse!

The company has applied to trademark its logo for:

▶️ NFT authenticated media + files
▶️ Virtual vehicles + clothing + footwear
▶️ Retail stores for virtual vehicles + clothing
▶️ Virtual environments
… and more!#NFT #Metaverse #Web3 #BMW pic.twitter.com/huO0RkiGWz

— Mike Kondoudis (@KondoudisLaw) November 30, 2022

Baby Shark’s Web3 arc

Content from Pinkfong’s massively popular children’s song/music video Baby Shark is set to be tokenized as part of a family-focused blockchain game.

Pinkfong reportedly penned a licensing agreement with Toekenz Collectibles to create and issue Baby Shark characters in a child safe digital environment.

Baby Shark NFT partnership: Toekenz

Toekenz Collectibles is an NFT platform targeted at children aged 12 and under, and the focus of the game is to educate kids aged five to nine “about the trading economy of digital collectibles.”

The kids will also be able to customize the NFT art to their own liking, and even participate in a Tokenz DAO where they “can exercise democratic decision-making.”

This is not Pinkfong’s first dip into NFTs, Cointelegraph previously reported that the South Korea-based company launched a series of limited editions Baby Shark NFTs in December last year.

Related: Two Bored Apes sell for $1M each: Nifty Newsletter, Nov. 23–29

Deadmau5 rolling out music metaverse

A Web3 startup co-founded by popular crypto-friendly DJ Deadmau5 (Joel Zimmerman) is gearing up for the launch of a music and gaming focused Metaverse platform.

Announced at the Art Basel event on Nov. 29, the start-up known as Pixelynx stated that the Polygon-based platform will launch this week, and kick things off with an Augmented Reality (AR) scavenger hunt set on Miami Beach.

The firm’s CEO and co-founder Inder Phull described the AR scavenger hunt as a “Rock Band meets Pokémon Go experience,” in which virtual gaming features are merged with real locations on maps via smart devices.

Users who hold Deadmau5’s Droplet NFTs will gain early access to Pixelynx’s metaverse with the platform aiming to provide a host of virtual experiences for fans of particular musicians and artists.

More Nifty News

NFTs depicting the ongoing protests in China against the country’s tough zero-tolerance COVID-19 policy have found their way to the NFT marketplace OpenSea at the tail end of November.

On Nov. 30, decentralized exchange (DEX) Uniswap announced that users can now trade NFTs on its native protocol. The function will initially feature NFT collections for sale on platforms including OpenSea, X2Y2, LooksRare, Sudoswap, Larva Labs, X2Y2, Foundation, NFT20, and NFTX.

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EmpiresX ‘head trader’ to face 4 years of prison over $100M crypto ‘Ponzi’

Two other associates that helped run the U.S.-based fraudulent crypto platform EmpiresX left the country early this year and are believed to be in Brazil.

One of the leading figures convicted of being behind the $100 million crypto “Ponzi” scheme, EmpiresX, has just been handed an over four-year jail sentence by a United States court.

The sentencing was handed to Joshua David Nicholas, the “head trader” of purported crypto platform EmpiresX, who is nowset to serve a 51-month prison sentence along with three years of supervised release for his role in the fraudulent scheme.

It follows a Sept. 8 guilty plea from Nicholas for conspiracy to commit securities fraud.

According to the Department of Justice (DOJ), over a two-year period, Nicholas made claims the platform would make daily “guaranteed” returns using a trading bot that utilized “artificial and human intelligence” to maximize returns.

In reality, the “bot” was fake, and Nicolas and his associates, Emerson Pires and Flavio Goncalves, operated a “Ponzi” scheme that paid earlier investors with money from later investors. The DOJ alleges blockchain analytics shows Pires and Goncalves, both Brazilian nationals, laundered investors’ funds through a “foreign-based” crypto exchange.

Only around $1 million of investor funds were sent to a futures trading account for EmpiresX with the majority of funds either lost or misappropriated according to the Commodity Futures Trading Commission (CFTC) which filed civil actions against the three in June.

At the same time, fraud charges were leveled against the trio by the Securities and Exchange Commission (SEC) which said investor money was used to “lease a Lamborghini, shop at Tiffany & Co., make a payment on a second home, and more.”

Related: HashFlare founders arrested in ‘astounding’ $575M crypto fraud scheme

Investors were also told EmpiresX was registered with the SEC as a hedge fund and that Nicholas was a licensed trader.

The SEC said the platform was never registered with the Commission and Nicholas’ was suspended from trading by the National Futures Association for misappropriating customer funds.

The scheme ran for two years, from around September 2020 until early 2022 when it fell apart as the platform refused to honor customer withdrawals who were likely wanting to leave the crypto market due to significant price drawdowns that began at the time.

Pires and Goncalves, who were residing in Florida, allegedly began winding down the operations of EmpiresX in early 2022 and left the U.S., they are now believed to be in Brazil.

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LBRY says it ‘will likely be dead’ following SEC loss

LBRY Inc noted that while the company is on its last legs, the underlying protocol and blockchain behind the content platform will carry on.

The firm behind the decentralized content platform LBRY said its days are likely numbered following its recent loss against the United States Securities and Exchange Commission (SEC) in court.

It is specifically LBRY Inc that must die, the LBRY protocol and blockchain will continue. pic.twitter.com/SWwbqTq9In

— LBRY (@LBRYcom) November 29, 2022

The SEC initially took LBRY Inc to court in Mar. 2021 over its LBRY Credit (LBC) tokens, alleging that the firm had been conducting unregistered securities offerings since 2016.

The SEC ultimately won that battle last month on Nov. 7, after a judge deemed the tokens to be securities in a major blow to the industry. 

Providing an update on the state of the business via Twitter on Nov. 30, LBRY Inc explained that the company “will likely be dead in the near future,” however the underlying protocol and blockchain will carry on:

“We’d like to be upfront about the fact that LBRY Inc. will likely be dead in the near future. We expect the LBRY mission to continue on, but the company itself has been killed by legal and SEC debts.”

LBRY Inc essentially provides a blockchain-based alternative to YouTube that offers less stringent censorship policies on its hosted content. The platform also facilitates direct tips in LBC to content creators as opposed to the standard advertising revenue share model.

In the SEC’s case against LBRY, it alleged that LBC was designed for pure speculation, while LBRY had argued that the tokens served key utility functions for its platform such as tipping, publishing, purchasing and boosting video content.

Despite the SEC winning the court dispute, LBRY suggested on Twitter earlier this week that the government agency has continued to be difficult to deal with in terms of settlement negotiations.

Responding to a post about its Nov. 29 status report on its ongoing SEC negotiations, the company noted that it offered the SEC “everything we have” but this proposal was still rejected.

Defense lawyer and former federal prosecutor James Filan questioned whether this was due to the SEC seeking out more drastic stipulations on future LBC sales.

“Let me guess. That’s because they want a Consent Judgment that also includes a specific agreement that every sale, even on the secondary markets, is a sale of a security,” he said.

In response, the LBRY Inc team simply supplied an emoji showing their lips are sealed.

— LBRY (@LBRYcom) November 29, 2022

It is also worth noting that Filan, who has 131,000 followers on Twitter, has remained up to date with the LBRY case due to his long running commentary on the ongoing dispute between the SEC and XRP creators Ripple Labs.

Related: LBRY alleges Apple forced it to censor certain terms amid COVID-19 pandemic

The cases are of a similar nature to each other in that the SEC has aggressively pushed to get both LBRY and XRP deemed as securities in court. Given that these are some of the first major crypto and securities related court cases, the outcomes could be seen as reference points for future rulings in the future.

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Axie Infinity is toxic for crypto gaming

Axie Infinity, like most cryptocurrency games, has provided players with an awful experience.

Blockchain gaming is only four years old — a toddler compared to the rest of the industry. It has a lot of growing up to do, particularly when it comes to play-to-earn games.

I’m a 28-year game industry veteran. I’ve produced 32 titles in that period of time on everything from Sega Genesis to Oculus Rift. Some of them were great. Many were forgettable. I didn’t hear much chatter about blockchain gaming from traditional developers and players until Axie Infinity began to take off. Cut to the peak of 2021, and the game had nearly 2 million players logging on daily.

Most people outside the crypto community at the time were (and still are) extremely skeptical about blockchain’s ability to add anything meaningful to games. They see Axie as an example of the low production values and rampant speculation they want to avoid at all costs. Moreso, they see blockchain as a continuation of overreach by publishers. However, in 2021, many believed Axie would prove blockchain gaming skeptics wrong.

It didn’t. Axie and most other crypto “games” to date have been awful experiences. They aren’t even really games. They’re more like digital sharecropping, rich NFT owners exploiting low-wage earning players. It’s shallow gameplay layered on a tokenomics model. This was highlighted most recently in October, when Axie’s SLP token plummeted in value as a result of an impending token unlock.

Related: Crypto gaming needs to be fun to be successful — Money doesn’t matter

Most players sell their tokens on the crypto market rather than in the game, meaning token numbers increase and cause a sort of crypto inflation. The game model relies on a constant inflow of new players to sustain it — something this month has shown to be very much not guaranteed.

Axie’s value is primarily driven by this speculation rather than fun. The game, if it can even be called that, is literally a grind. Despite attempts to separate it from game economy reliance with iterations like Axie Origins, the toxic model of being hyper-dependent on tokenomics prevails. This continues to detract from projects that are trying to make fun games that utilize blockchain to enhance player experience.

At the peak of its popularity, the team behind Axie arrogantly claimed that they were “freeing” players and enabling a world in which work and play merge. But the game’s decline following the massive $620 million hack on customer funds in March showed how hollow this language was. Axie creator Sky Mavis flip-flopped from the play-to-earn narrative towards a play-and-earn ethos, clearly aware that the game wasn’t going to deliver on its mission.

For blockchain gaming to succeed, developers need to focus on awesome game design instead of trying to prop up their tokens. During an increasingly difficult global economic climate, even mainstream gaming is struggling. But those games that are doing well despite market sentiment are AAA titles like God of War Ragnarök and the latest Call of Duty, which have exciting lore and awesome gameplay.

The ability for players to spend time creating things that people will love in terms of stickers, skins and weapons — while being able to monetize them — is key. People need an outlet where they can be creative and put together content that generates interest and emotion with a community that loves playing the game.

If we are to turn the tide on the perception of blockchain gaming, we need to show how it can benefit gamers. Moving beyond words and actually demonstrating that it enhances gameplay and utility. Blockchain can do incredible things as a backend infrastructure, such as enabling players to truly own in-game items, prove attribution and the history of their weapons and loot, and get rewarded for their in-game creations.

Related: The reason bots dominate crypto gaming? Cash-grubbing developers incentivize them

Part of Vitalik Buterin’s drive to innovate with blockchain was driven by his distress when he lost a spell’s abilities in World of Warcraft overnight as a result of centralized control of the game. Blockchain ultimately restores true ownership of in-game features to players, meaning that they own them, even if changes occur in a game or it goes under.

This asset ownership can extend into many areas. Right now, Microsoft and Sony let you capture video of your in-game activity and then post it to social media, but you don’t really own how it’s monetized. You’re locked into YouTube monetization. With blockchain, players could capture in-game moments, memorialize them as NFTs and then allow people to buy/sell them as they see fit. By updating gaming infrastructure and enabling new innovation, real-time integration of players into the creative process can also take place, which is rarely seen in the industry.

Players want involvement in the creation of the games. They don’t want to be manipulated into paying more. Studios need to prioritize gameplay, rich graphics, and compelling narratives to bring players on board. The blockchain games that become successful will be the ones where players don’t even know there’s a blockchain operating in the background.

Deception and speculative frenzies have been the central features of the wider crypto market this year. So bringing players on board is going to be that much harder. Studios will have to go the extra mile to demonstrate to players that blockchain gaming can achieve the security, fun, and adrenaline-pumping action that defines the games they love.

Mark Long is the CEO of Shrapnel, a blockchain-enabled moddable AAA first-person shooter game. He graduated from the University of Texas at Austin with a BS in computer science before attending an executive education program at the Wharton School. He previously served as a director with HBO’s digital products group; as a group program manager at Microsoft; and as the CEO of companies including Aristia, Meteor Entertainment, and Zombie Studios.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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The metaverse is happening without Meta’s permission

Despite Facebook’s new name, focus and billions in investment, the metaverse will emerge drastically different from its vision.

In changing the name of its parent company to Meta, Facebook put a stake in the ground: It would be the symbol of the evolution of the internet, the metaverse. Whether we liked it or not.

According to Meta, the metaverse is “a set of digital spaces to socialize, learn, play and more.” Its first true attempt came in the form of Horizon Worlds, a virtual reality universe so lifeless and devoid of content that it has people asking if the metaverse is a step forward or backward.

Thankfully, it won’t matter.

The metaverse, a term from long before Facebook existed, is happening. Its potential and draw are found in existing places — games like Fortnite, platforms like Roblox and online hubs like Discord. There will be no launch of the metaverse, no switch that turns it on. You’ve been experiencing parts of it whether you’ve realized it or not. More and more of your real-world identity has blended into your digital one. IRL to URL, and back again.

The metaverse isn’t what you’ve read

Pointedly, the metaverse isn’t what Meta says it is.

“A set of digital spaces to socialize, learn, play and more” accurately describes current apps and games, but this simplified definition has made the term “metaverse” synonymous with stilted software like Horizon Worlds, a painfully unimaginative 3D world with early 2000s-era graphics and plenty of space for ads.

Empty 3D world with large digital billboards with ads on them, digital art, Y2K aesthetic. Source: DALL-E

For those not deep into the weeds of writer Matthew Ball’s precise definition, the metaverse can be thought of as a change in how we view and experience our digital lives — not a 3D world, but a shift into a more immersive, simultaneous, representative relationship between our physical and digital selves. The metaverse causes the line between the real and digital to blur, an evolution of the change triggered by the mobile internet.

So naturally, the metaverse won’t flourish because of Meta’s isolated, soulless dystopia. Nor will it do so in Decentraland’s attempt at creating a digital world, which fails to draw more attention than a mildly popular indie game after two years and billions of dollars in funding.

Related: Facebook is on a quest to destroy the metaverse and Web3

It’s no surprise: Horizon Worlds and Decentraland are competing with digital escapes that are exponentially more fun — games, movies and social networks.

And even more directly, they’re competing with the real world. If you’re telling people they’re going to work and play in the metaverse, it better offer something magical beyond their normal lives. Right now, the meatspace still wins. It’s not even close.

The metaverse needs magic

That magical feeling has always been present in games. Visiting your feline neighbor in Animal Crossing is infinitely more compelling than seeing your legless coworker at a conference table in Horizon Worlds. Making immersive experiences compelling requires that magic, and it’s hard to create a company culture that can build fun, perhaps impossible when your revenue is from driving more clicks — or whatever call to action exists in 3D.

3D platforms like Roblox and VRChat have instead built a path for creators to bring their own magic, albeit a narrow one. Spending time on VRChat vs. Horizon Worlds showcases the difference between a user-generated world and a corporate one. The former is human and surprising, while the latter is depressing and expected.

But creators must be motivated to create in a specific medium — and given the tools to do so. The old path to motivating creators with sponsorship is toxic and dying. Creative people don’t want to restrict their visions for corporate profits or limit their options by platform restrictions.

Fortunately, there is another way.

The metaverse needs ownership

Nonfungible tokens (NFTs) have largely been viewed as giving power back to the consumer, acting as a way for real ownership to be held by the collector, not the platform. And that’s all true.

But ownership has a different effect on creators: It motivates them. Rather than creating content for other platforms or ads for brands, their work is instantly and indefinitely monetizable. And in the rare but best-case scenarios, it’s handled in a truly decentralized way away from deception.

Decentralization and ownership provide that critical motivating factor for creators — the people who should be defining what the metaverse looks like. Tokenization sets creators free from the serfdom of today’s rent-seeking social networks (think of Instagram or Snapchat), allowing them to create and sell their work without needing to be sponsored by a brand to feed themselves. Protocols built for decentralization will be where creators naturally gravitate, creating avant-garde spaces and defining what creativity in the metaverse means. Gentrification can come later.

Related: Facebook and Twitter will soon be obsolete thanks to blockchain technology

Instead of giving power and freedom to creators, Meta is structured to think of ad revenue and brand partners first, a strategy that is actively hostile to creators and users at large.

A direct relationship between creators and their communities (an increasingly fuzzy distinction) creates a new trust, and the foundation for that relationship is what will usher in an awe-inspiring metaverse. The “gray space” where creators and communities meet — an idea embraced by David Bowie — drives an entirely different dynamic and experience than one where the core relationship of a platform is built on the relationship between the platform owner and its advertisers.

A futuristic green city being painted by a brush held by an artist, digital art. Source: DALL-E

The metaverse needs context

Truthfully, creating that magic in the metaverse is challenging, even with digital ownership and the right motivation. Even the best 3D worlds and digital meeting places fail to connect meaningfully back to our real lives. NFTs have yet to impact the physical world beyond their financial impact. We haven’t brought URL back to IRL.

But the signs are there.

Related: Nodes are going to dethrone tech giants — from Apple to Google

Mixed reality games like Pokémon Go, which bring iconic digital characters into augmented reality, show a centralized approach to an immersive digital world built on the physical one. Tying our inherent connection to our digital collectibles, like Psyduck, back into our real lives is where the metaverse can reach new relevance.

Alone, the context-driven version of the metaverse is at risk of centralization and attention-economy economics, too — and must be paired with decentralization and a creator ethos. Empowering creators to define reality itself will bring about a future that enhances our lives instead of taking away from them.

The metaverse is happening

The metaverse is happening, and it won’t look like Meta’s version.

The metaverse is not a specific technology but an era where we have a changed perception of technology’s role in our lives. One where digital realities represent a larger piece of our shared reality and where purely using technology is replaced by creating, owning and experiencing it. The more tactile and connected to us that those digital realities become, the more real the metaverse is.

Protocols, not platforms. Creators, not brands. Context, not isolation. Principles and people will define this next evolution of the internet, and Meta is not the arbiter of either.

Alex Herrity is co-founder of Anima, a protocol for ownable, dynamic augmented reality. Prior to Anima, he built products and games used by billions of people with companies like Epic Games, HBO and his former startup Ultravisual, which was acquired by Flipboard.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Huobi, Poloniex announced strategic partnership despite initial denials of a merger

The exchanges will cooperate progressively in HT coin development, liquidity sharing and global compliance, plus Huobi will monitor Poloniex for new projects to list.

Huobi and Poloniex announced a strategic partnership on Nov. 30. Reports of a planned merger of the two cryptocurrency exchanges emerged and were denied last week. 

The two exchanges will “progressively cooperate” on Huobi’s HT coin ecosystem development, connectivity, liquidity sharing and global compliance. Beginning in December, the Huobi Advisory Board will make a monthly evaluation of all Poloniex projects, with top performers potentially directly listed on Huobi, the exchange stated.

Talk of a merger began with a tweet from Wu Blockchain. Poloniex is by far the larger of the two exchanges. It is not available to U.S. users.

The Poloniex exchange, which Justin Sun acquired from Circle in 2019, will merge with his recently acquired Huobi exchange, according to sources familiar with the matter. Coingecko shows that Poloniex’s daily spot trading volume is only 1/10 of Huobi’s. Exclusive

— Wu Blockchain (@WuBlockchain) November 25, 2022

The Chinese exchange has seen a number of changes this year. It launched an investment arm in June. Cofounder Leon Li reported in August to be selling his share. Hong Kong-based About Capital bought a controlling share in Huobi in October. Earlier in November, it denied reports of widespread layoffs and resignations.

Huobi is reportedly planning to relocate its headquarters to the Dominican Republic.

Poloniex and @HuobiGlobal Advisory Board will assess all Poloniex-based projects on a monthly basis. Projects that stand out will have the chance to be listed on Huobi and receive support from both platforms, reaching tens of millions of users. https://t.co/VqdGdbQq4h

— Poloniex Exchange (@Poloniex) November 30, 2022

On the same day as the merger announcement, Huobi said it was creating an upgraded affiliates program for influencers, offering Spot commission up to 50% and futures commission up to 60%.

Related: Dominica works with Huobi for digital identity program

Poloniex reached a $10-million settlement with the United States Securities and Exchange Commission for allegedly selling unregistered securities last year, in a case that was later criticized by Congressman Brad Sherman, a prominent crypto skeptic, as an example of the agency going after “small fish” in its enforcement efforts. Polonium was blocked by South Korean regulators in June. 

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Bankman-Fried claims: ‘I unknowingly commingled funds’ at DealBook Summit

Sam Bankman-Fried was speaking at the New York Times’ DealBook Summit live on Nov. 30.

Former FTX CEO Sam Bankman-Fried has claimed to have “unknowingly commingled funds” between Alameda and customer funds at FTX.

Bankman-Fried was speaking at the New York Times’ DealBook Summit via video conference on Nov. 30, in which journalist Andrew Sorkin noted “there appears to be a genuine commingling of the funds that are FTX customers that were not supposed to be commingled with your separate firm.”

Sam Bankman-Fried speaking at the New York Times’ DealBook Summit. Source: New York Times

Bankman-Fried denied knowing about the commingled funds and blamed it on poor oversight.

“I unknowingly commingled funds […] I was frankly surprised by how big Alameda’s position was which points to another failure of oversight on my part and failure to appoint someone to be chiefly in charge of that,” said Bankman-Fried, adding:

“But I wasn’t trying to comingle funds.”

Bankman-Fried also appeared to deflect blame for the actions of Alameda.

“I wasn’t running Alameda, I didn’t know exactly what [was] going on. I didn’t know the size of their position.”

The crypto exchange famously imploded in early November as a result of a liquidity crisis, leading to a halting of customer withdrawals. It filed for bankruptcy days later on Nov. 11. 

It is alleged that much of the liquidity crisis was due to Alameda using client funds to cover a loans that were being recalled due to the credit crunch caused by the collapse of LUNA. 

This is a developing story and more information will be added as it becomes available. 

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Total crypto market-cap hits $850M as Bitcoin and altcoins recover from FTX’s collapse

The total crypto market recovers some lost ground as the contagion risks associated with FTX’s collapse begin to look resolvable.

The total cryptocurrency market capitalization gained 2% in the past seven days, reaching $850 billion. Even with the positive movement and the ascending channel that was initiated on Nov. 20, the overall sentiment remains bearish and year-to-date losses amount to 63.5%.

Total crypto market cap in USD, 4-hour. Source: TradingView

Bitcoin (BTC) price also gained a mere 2% on the week, but investors have little to celebrate as the current $16,800 level represents a 64% drop year-to-date.

Bankrupt exchange FTX remained at the centerpiece of the newsflow after the exchange hacker continued to move portions of the stolen $477 million in stolen assets as an attempt to launder the money. On Nov. 29, analysts alleged that a portion of the stolen funds were transferred to OKX.

The FTX saga has made politicians shout louder in their calls for regulation. On Nov. 28, the European Central Bank (ECB) president Christine Lagarde called regulation and supervision of crypto an “absolute necessity.” The United States House Financial Services Committee Chair Maxine Waters announced that lawmakers would explore the collapse of FTX in a Dec. 13 inquiry.

On Nov. 28, Kraken, a U.S.-based cryptocurrency exchange, agreed to pay more than $362,000 as part of a deal “to settle its potential civil liability” related to violating sanctions against Iran. According to the United States Treasury Department’s Office of Foreign Assets Control, Kraken exported services to users who appeared to be in Iran when they engaged in virtual currency transactions.

The 2% weekly gain in total market capitalization was impacted mainly by Ether’s (ETH) 7% positive price move. The bullish sentiment also significantly impacted altcoins, with 6 of the top 80 coins rallying 10% or more in the period.

Weekly winners and losers among the top 80 coins. Source: Nomics

Fantom (FTM) gained 29.3% amid reports that the Fantom Foundation generates consistent profits and has 30 years of runway without selling any FTM tokens.

Dogecoin (DOGE) rallied 26.8% as investors increased expectations that Elon Musk’s vision for Twitter 2.0 will include some form of DOGE integration.

ApeCoin (APE) gained 15.6% after the community-led DAO made up of ApeCoin holders launched its own marketplace to buy and sell NFTs from the Yuga Labs ecosystem.

Chainlink (LINK) rallied 11.1% ahead of its staking services beta-version launch on Dec. 6, boosting holders’ reward-earning opportunities.

Leverage demand is balanced between bulls and bears

Perpetual contracts, also known as inverse swaps, have an embedded rate usually charged every eight hours. Exchanges use this fee to avoid exchange risk imbalances.

A positive funding rate indicates that longs (buyers) demand more leverage. However, the opposite situation occurs when shorts (sellers) require additional leverage, causing the funding rate to turn negative.

Perpetual futures accumulated 7-day funding rate on Nov. 30. Source: Coinglass

The 7-day funding rate was near zero for Bitcoin, Ether and XRP, so the data points to a balanced demand between leverage longs (buyers) and shorts (sellers).

The only exception was BNB, which presented a 1.3% weekly funding rate for those holding leverage shorts. Although it’s not burdensome to sellers, it reflects investors’ unease about buying BNB at the current price levels.

Traders should also analyze the options markets to understand whether whales and arbitrage desks have placed higher bets on bullish or bearish strategies.

The options put/call ratio shows moderate bullishness

Traders can gauge the market’s overall sentiment by measuring whether more activity is going through call (buy) options or put (sell) options. Generally speaking, call options are used for bullish strategies, whereas put options are for bearish ones.

A 0.70 put-to-call ratio indicates that put options open interest lag the more bullish calls by 30% and is therefore bullish. In contrast, a 1.20 indicator favors put options by 20%, which can be deemed bearish.

BTC options open interest put-to-call ratio. Source: Laevitas.ch

Even though Bitcoin’s price failed to break the $17,000 resistance on Nov. 30, there was no excessive demand for downside protection using options. As a result, the put-to-call ratio remained steady near 0.53. The Bitcoin options market remains more strongly populated by neutral-to-bearish strategies, as the current level favoring buy options (calls) indicates.

Despite the weekly price rally on select altcoins and even the 7.1% gain in Ether price, there have been no signs of sentiment improvement according to derivatives metrics.

There’s balanced demand for leverage using futures contracts, and the BTC options risk assessment metric did not improve even as Bitcoin’s price tested the $17,000 level.

Currently, the odds favor those betting that the $870 billion market capitalization resistance will display strength but a 5% negative move toward the $810 billion support is not enough to invalidate the ascending channel, which could give bulls the much-needed room to eradicate the contagion risks caused by FTX’s insolvency.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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