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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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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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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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US CFTC commissioner calls for new category to protect small investors from crypto

Speaking the FIA meeting in Singapore, Christy Goldsmith Romero compared the typical crypto investor, who may be of modest means, with the investors the CFTC is used to.

United States Commodity Futures Trading Commission (CFTC) commissioner Christy Goldsmith Romero spoke at the Futures Industry Association Asia Derivatives Conference in Singapore on Nov. 30. She talked about “how to harness the best that technology offers, while protecting against emerging threats,” with particular emphasis on cybersecurity and crypto. 

Goldsmith Romero had two proposals for protecting consumers and markets from the risks presented by cryptocurrency. The first was rather novel. “Protecting household retail investors starts with redefining who is a retail investor,” Goldsmith Romero said. Crypto investors are different, she said:

“Most are young-born after 1980, diverse, and make less than $50k a year. That is not the typical customer that the CFTC is used to seeing.”

Thus, they should not be treated the same, Goldsmith Romero reasons. “we also should not let them be crushed, which will happen without meaningful and targeted customer protections,” she said, while acknowledging the need to maintain financial inclusivity.

Goldsmith Romero suggested creating two categories of retail investor “separating household retail from professional and high net worth individuals.” After that the CFTC would provide consumer protections across that division and for each categories individually.

In traditional finance, a broker plays a role in determining the appropriateness of an investment for a consumer. In disintermediated transactions, “it is important for regulators to assess risk to customers,” she said. Moreover:

“Today, I am calling publicly for the first time for the CFTC to invoke heightened supervision of crypto exchanges. […] It is well within our existing authority for derivatives exchanges.”

The CFTC has not heeded her calls “for months” to implement that supervision, however. Goldsmith endorsed CFTC Commissioner Caroline Pham’s call for an Office of Retail Investor Advocate.

Goldsmith Romero digressed in her speech to discuss blockchain use cases unrelated to cryptocurrency. “Distributed ledger technology has the potential to prevent disease, keep food safe, limit waste, and save our agricultural industry time and money,” she said.

Related: CFTC commissioner compares crypto contagion risk to 2008 financial crisis

Goldsmith Romero was nominated for a CFTC chair by U.S. President Joe Biden in September 2021 and sworn in on March 30. She has voiced her concerns about retail investors before, and received some industry support for her proposed household retail investor category.

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

At the height of the bear market, two NFT collectors have paid almost $1 million to purchase Bored Ape NFTs.

In this week’s newsletter, read about how two Bored Ape nonfungible tokens (NFTs) sold for almost $1 million during the bear market and how the word “metaverse” made it into the top three finalists for Oxford Word of the Year. Check out how the metaverse can generate passive income through royalties and how NFT marketplace OpenSea has integrated BNB Chain into its platform. And, don’t forget this week’s Nifty News featuring COVID-19 protests in China being converted into a Polygon-based NFT collection. 

‘Metaverse’ a top 3 contender for Oxford’s Word of the Year

The word “metaverse” has made it through to the top 3 finalists for the Oxford Word of the Year (WOTY) competition. The word will go against other contenders, including “IStandWith” and “Goblin Mode.”

In a video pitch, the Oxford University Press (OUP), the publisher of the popular Oxford English Dictionary, described the metaverse as “a hypothetical virtual reality environment in which users interact with one another’s avatars and their surroundings in an immersive way.”

Continue reading…

OpenSea’s Seaport Protocol onboards creators and NFT holders on BNB Chain

OpenSea has announced its plans to integrate BNB Chain into its NFT marketplace by the end of 2022. The integration will enable the platform’s users to buy and sell NFTs based on BNB Chain. According to the announcement, the integration will allow creators within the BNB Chain to have multiple payouts, real-time payouts and collection management.

An executive at BNB Chain said that their aim is to provide better experiences to both platforms’ users, suggesting that the integration will bring creators into a wider system and empower NFT initiatives within the BNB Chain ecosystem.

Continue reading…

ApeCoin geo-blocks US stakers, two Apes sell for $1M each, marketplace launched

While the rest of the crypto community weathers the effects of the bear market, some collectors are continuously beefing up their NFT collections. BAYC #232 was bought by the anonymous NFT collector Keungz for 800 Ether (ETH), which was around $950,000 at the time of purchase.

On the other hand, BAYC #1268 was transferred in a transaction between two unknown wallets. The NFT piece was sold for 780 ETH, which is estimated to be around $940,000 at the time of the transaction.

Continue reading…

The metaverse is a new frontier for earning passive income

In an article, Cointelegraph dived deep into the metaverse as a means of generating passive income. In an interview, a metaverse app executive John Burris told Cointelegraph that the metaverse is full of opportunities to earn money.

According to Burris, blockchain and NFTs unlocked true ownership and created a new royalty model that allows funds to continue to flow back to the original creator, providing a “well-deserved passive income” as items get traded.

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Nifty News: China’s lockdown protest NFTs emerge, Candy Digital cuts staff and more

Meanwhile, images showing COVID-19 protests in China have been uploaded to OpenSea as NFTs. A collection based on Polygon called Silent Speech featured 135 NFTs that show pictures of protesters, signs, graffiti and screenshots that relate to the ongoing protests against China’s zero-tolerance policy for COVID-19. On the other hand, NFT firm Candy Digital has laid off a significant portion of its employees as NFT trading volumes went down in 2022.

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Thanks for reading this digest of the week’s most notable developments in the NFT space. Come again next Wednesday for more reports and insights into this actively evolving space.

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FTX proves MiCA should be passed fast, officials tell European Parliament committee

In its latest hearing on FTX, the committee looked to financial officials to assess the impact of FTX’s collapse in Europe and suggest a way forward.

The European Parliament Economic and Monetary Affairs Committee held a hearing on the “FTX cryptocurrency exchange collapse and implications for the EU” on Nov. 30. Three European monetary officials testified, talking about FTX, blockchain technology and crypto regulation in a “preliminary assessment of the events.”

European Securities and Markets Authority (ESMA) Risk Analysis & Economics Department Head Steffen Kern told the committee that ESMA “has neither regulated nor supervised FTX” and has no “information on the company beyond what is in the public domain.” The ESMA does not see significant risks to the broader financial sector from the collapse of FTX given the small portion of the total market represented by crypto and the limited connections between crypto and traditional finance.

Kern concluded by saying Markets in Crypto-Assets Regulation (MiCA) legislation, due to come into force in 2024, “is tackling the right issues to introduce vital protections for investors and important rules for market participants through a common EU regime.”

#FTX? What happened?

FTX collapse is likely to cause major detriment to retail investors. The drop in value, #CryptoAssets risk and huge price volatility as well as aggressive marketing are among the implications for investors.

#ESMA statement → https://t.co/KcEAWGIa0M pic.twitter.com/z1QLhcm0bw

— ESMA – EU Securities Markets Regulator (@ESMAComms) November 30, 2022

On questioning, Kern said that FTX (EU) Ltd., which is domiciled in Cyprus, had received a Markets in Financial Instruments Directive license, in spite of the fact that the license is not intended to cover crypto. That license was suspended on Nov. 9.

Related: MiCA proponent cites FTX in advocating for regulation: ‘Crypto assets are not play money’

Member of the European Parliament and MiCA Rapporteur Stefan Berger said of FTX at the hearing, “Basically, it was SBF and a system that depended on him. […] FTX is not the failure of blockchain technology, but the failure and hubris of one person.” He continued:

“I have two political demands: firstly, MiCA has to be passed as quickly as possible. […] Secondly, it would be desirable if a large number of states outside the European Union would take the example from MiCA. A global MiCA would be the best solution.”

Deputy Director eneral of the EU Financial Services, Financial Stability and Capital Markets Union Alexandra Jour-Schroeder told the committee, “Under the MiCA regime, no companies providing cryptoassets in the EU would have been allowed to be organised, perhaps it’s better to say disorganised, in the way FTX reportedly was.”

The committee heard from European Central Bank President Christine Lagrande on Nov. 28. She pointed to the FTX debacle as evidence of the need for additional “MiCA II” legislation.

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