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Sam Bankman-Fried and FTX execs donated a total of $70 million to political campaigns toward the mid-term election cycle. This sum made FTX the third-largest donor across the entire political landscape for this mid-term election cycle. The individuals who donated included Bankman-Fried himself, co-CEO Ryan Salame and Director of Engineering Nishad Singh. They donated a rough 55%/45% split between both Democrats and Republicans.
FTX US also donated an additional $1M as well a super-PAC vying for Senate control on October 27th, filing for bankruptcy only weeks later. This is where at least some of customer funds went. Meanwhile, FTX was running at a huge losses.
As a result, eight House members wrote a letter and made statements that seriously questioned the legitimacy in many ways of the SEC's inquiry into crypto companies going as far as to say it may violate law. It was revealed at least five of the eight members received campaign donations from FTX employees, ranging from $2,900 to $11,600. Rep. Ted Budd (R-NC), one of the signatories, received half a million dollars in support from a Super PAC created by FTX co-CEO Ryan Salame. And Congressman Emmer's organization, is particular received $2.75 million from FTX in the 2022 cycle; $2 million from FTX's Salame in late September, and $750,000 from the company’s political action committee.
Some politicians are now attempting to return the funds from FTX by donating to charities. However, this has only thus far been to politicians who return a paltry sum amounting to less than $10,000.
Now, SBF donated to the GMI PAC as well as $23M to the Protect Our Future PAC. All 19 of the congressional candidates backed by GMI PAC won their races last week, sending 16 new members to the House and Senate. We will see where this takes us.
Sources:
On-chain analysis identified the movement of one of MATIC's biggest whales, correlating some of its transfers with sharp price drops in Polygon's token, indicating a possible exit. And there are still about 39M left at the address 0xaac22*.
This was originally published at my substack — You can access the OP for links and images.
https://vinibarbosa.substack.com/p/matic-whale-has-been-dumping-on-the
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MATIC “dumps” send the price down
On November 15, 2022, the whale whose address begins with [0xaac22\*], redeemed an old staking of 79.38M from MATIC staking smart contract and started making partial transfers of this amount to the Binance hot wallet.
Each new transfer occurred just before aggressive price declines, signaling possible dumps from the whale.
I checked MATIC's whale information and transfers involving possible dumps and price drops were as follows, with their approximate values at the time of transfer:
- 11/15 – 79,386,224 MATIC (~$74.63M USD); 7.0% drop in price; withdrawal from the staking contract.
- 11/18 – 5,000,000 MATIC (~$4.40M USD); 4.4% drop in price; Tx to Binance.
- 11/21 – 10,000,000 MATIC (~$7.96M USD); 3.1% drop in price; Tx to Binance.
- 11/22 – 9,000,000 MATIC (~$7.65M USD); 2.9% drop in price; Tx to Binance.
- 11/24 – 9,000,000 MATIC (~$7.65M USD); 6.0% drop in price; Tx to Binance.
- 11/27 – 10,000,000 MATIC (~$8.45M USD); 6.9% drop in price; Tx to Binance.
The current balance of MATIC's Whale is 36,460,765.58(…) which equals around $29,878,103.79, with today's price.
It is possible that more dumps will continue to occur in the coming days, according to the pattern that has already been presented.
MATIC Whale (0xaac22…)
When studying the history of this MATIC Whale whose address is [0xaac22b3c17d3b31c6d0d7a9b6dd7a0a797c40339], we see that its first purchase took place on July 6th, 2021, in the amount of 100 MATIC. Appearing to be some kind of test.
The second purchase was much more relevant, totaling 60,000,000 MATIC, made at CryptoCom three days later (July 9, 2021). The corresponding amount would be $63.08 million, on the day of transfer to the 0xaac22 wallet.
That amount was almost immediately moved into the Polygon staking smart contract.
The MATIC Whale continued to accumulate until it reached approximately 79 million of the tokens that were staked. There are other smaller movements indicating possible trades over the period.
This address has been on Polygon's richest list for months, but now appears to indicate that it is interested in exiting its MATIC position. What would have motivated this decision?
When? Look, no one has a crystal ball, but I'm starting to think it will be by or during the next bullrun (and hopefully that means within the next 4 months or so)
Why? Well, I've thought this was likely for a long time. I mean, obviously, Bitcoin is a solid project. The original is still on top for now for good reasons: it's secure, reliable, and it has the biggest name recognition. But Ethereum is just doing so much more.
Personally, my reaction to this is to put a heavy portion of my portfolio in MATIC. The layer 2 options just seem like they have more upside when transactions on the Ethereum network get expensive. It's just so much cheaper to use MATIC, and I'm expecting that it will get a massive boost from Ethereum spillover.
Sorry to anyone still HOLDing BTC, but I think it's time we start setting the expectation that Bitcoin's price is headed toward it's long term state. I'm expecting that it is within a power of 10 of where it's going to be for the long haul, which is a wildly large range, until you consider how many powers of ten it has blown through in the past decade.
Maybe I'm reading the tea leaves wrong, but it feels like the next run is going to be most profitable for the alt coins, and Bitcoin won't go all that much higher than the previous ATH.
If all that FTX-drama did one good thing that is making people fear to keep their crypto in exchanges as they now have seen that its truly not in their custody at all and exchanges basically just “gamble“ it away.
All of this has now caused even more people to take the expression: “not your keys, not your coins“ seriously. As nearly 180k Bitcoin has been taken off exchanges on a net basis over the last 30 days, thats a new record. But also very unusual to happen right now…
Net position changes on BTC by Glassnode. (basically, red = withdrawn and green = deposit)
If you look closer you can see that high amounts of deposits usually coincide with a downturn in price, which makes sense as people usually panic and try to sell their crypto. Meanwhile, high amounts pf withdrawals happen just during a price upturn as people either buy crypto then or are confident enough to put theirs in cold-storage.
Now it has been different, we had a big downturn due to the FTX collapse and panic AND meanwhile people were withdrawing in record-speed from exchanges, thats highly unusual and basically supports the thesis that people got so scared away from FTX-collapse that they are finally starting to not trust exchanges.
Thats an amazing foundation for the next bull run, people are finally taking self-custody of their crypto.
A very topical analysis and commentary:
Bitcoin Monthly Chart (BTCUSD): Showing RSI Trend
Markets remain neutral to bearish bias on higher timeframes. In previous bear markets it took Bitcoin around 11 months (330 days) to find a floor, once RSI bottomed.
We are around 270 days currently. 330 days will land in January '23, but given the macro I would expect a longer bear market than in the past.
That said, we are starting to see early signs of investors trying to front-run a soft pivot by the US Fed, with equities and other markets rallying in recent weeks. If this continues, once crypto shakes the FTX fallout, we should follow as well.
Regarding the bearish to neutral bias I stated up front- note that this refers to the monthly chart and higher timeframes. On lower timeframes, say weekly.. we probably have a shot at one more swing low (maybe) then a -potential- midrange rally into the year end and Q1.
This largely depends on the upcoming FOMC and ECB actions into the years end, along with the usual external factors like inflation, oil and Russia.
This is just another crazy story now getting exposed behind FTX and SBFs so-called bailout of Voyager. After LUNA collapsed, Voyager was also collapsing, then first there was a big bid-war for who is going to bail-out Voyager. Binance was at top and seemed to have it but then “unnamed sources“ released articles (at Reuters for example) sharing concerns about their bid.
One of those sources, possibly the ex-CEO of Binance US who is also on the Voyager board and has apparently received some “gifts“ from FTX. Voyager even afterwards claimed that FTX was manipulating the bidding process but obviously back then we did not have enough intel.
Its clear now that all those so-called bail outs FTX and SBF were going for were nothing else but a deliberate attempt to not be paying back the extensive loans they took as this would have clearly exposed their lacking balance sheet.
All of this information comes from FatManTerra on Twitter who has been very vocal and right about exposing more behind-the-scenes of scandals like LUNA and now FTX.
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From FatManTerra‘s extensive and informative thread on this topic.
DCG published a letter to investors. It clarifies several misconceptions. It also raises new questions around the Promissory Note. Let's dive a bit further into the investor letter, and what we can understand from it, from the outside perspective.
I hope that you will go through the entire post, and try to get an idea of what crypto firms gamble with your money.,
What did we learn? DCG was levered long GBTC. 3AC blows up. This writedown reduces equity capital at Genesis Lending. Net this increases the DCG's already levered exposure to GBTC. And the more GBTC slides in price, the more DCG's leverage increases. How exactly?
DCG owes ~$2 Bn to two creditors: subsidiary Genesis Lending and Eldridge
- Genesis Lending. There are two loans 1. $575mn loan and 2. $1.1bn loan 'Promissory Note'
- A group led by Eldridge issued a credit facility of $350mn
We'll focus here on Loan #1 - ('GBTC Loan') - DCG pledged its GBTC holdings to borrow $575mn from subsidiary Genesis Lending. We don't know the timing. DCG purchased $778mn of GBTC from March 2021 thru Jun 2022. DCG stopped purchases after 3AC blow-up.
DCG was betting the discount to NAV would close - the same trade 3AC was making. Genesis Lending was financing both DCG and 3AC on the same trade. They shared the same view. 3AC buying GBTC helps close the gap. GBTC was at a Discount to NAV of 7-30% during the period.
But DCG faced a double whammy. The value of GBTC dropped due to:
- A decline in the value of bitcoin and
- A widening of the NAV discount to 45%.
3AC was once the largest holder of GBTC (38mn shares). DCG assumed some or all of this GBTC when they margin called.
The discount kept widening leading to the 3AC blow-up. 3AC had a collateral shortfall of $462mn. This exposed Genesis Lending to insolvency and DCG came to the rescue. DCG holdings of GBTC shares at the end of June have now nearly doubled to 67 MM shares held.
As an aside, it's unusual for a closed-end fund to trade more than 25% discount to NAV for this long. I respect the long thesis. However, the parties bet way too much. And they did not hedge BTC price declines. The gap widening was the first domino.
The flowchart in the image explains that.
After the 3AC blow-up, DCG stops buying GBTC thru end of September. DCG is already levered long GBTC and the discount & price of GBTC is going against them. Ever since 3AC, DCG is is focused on deleveraging their balance sheet.
We won't know if DCG sold GBTC after Sept (until Feb filing). We expect they are - that would explain the discount widening to record levels - nearly 50%. The market knows DCG is attempting to de-lever and also holds the most GBTC. (Folks may be front running the 'JPM whale'.)
DCG is delevering thru earnings and potentially GBTC asset sales. DCG's weighted average purchase price of GBTC was ~$24 (vs. $9 where it trades today). If DCG does sell GBTC, they would incur significant realized losses. DCG's *unrealized* losses in Q3 alone total $268 MM
The un-realized loss is about the same as Grayscale's current annual run-rate revenue generation of $273 MM.
Grayscale has sufficient earnings power to pay off Loan #1. But there is the business of Loan #2 - the $1.1 Bn Promissory Note due in 10 years. That loan is the bigger headache for DCG and giving prospective investors some pause.
DCG has enough revenue generating power to absorb these liabilities and losses. But we can only see the Grayscale P&L. DCG is a source of strength. They can absorb $2n in losses. I don't see a DCG solvency risk on the table. That's good news for the ecosystem.
Grayscale’s revenues are directly linked to the value of Bitcoin. Grayscale generates 50% less revenue YOY. If BTC drops a bunch, then we need to re-assess. The smart move for DCG is raise capital so they can immunize fully against BTC price risk.
The core issue is an impairment to equity (and likely operational and asset quality issues). 3AC ripped a hole thru the the Genesis balance sheet. DCG’s promissory note is a bandaid. The remedy for a loss of equity capital is fresh equity capital. It’s that simple folks.
TL;DR DCG maybe in trouble due to 3AC. 3AC and DCG both were betting that GBTC discount would reduce, but it increased which was the reason for 3AC collapse. DCG has to assume all GBTC od them when 3AC got margin called. so, they stopped their long trade and started deleveraging; they may have started selling, which increased NAV to 50%.
They both gambled on GBTC NAV discount which didn't went their side. It's frustrating to see firms like 3AC, Celcius and others just gamble on a share and expect prices to go up.
just a note, Cathie woods of ARK investments is also betting on the long trade on GBTC. She recently purchased a large amount of shares of GBTC. Let's see how that goes.
https://nitter.net/ramahluwalia
Thank you.
Last post link here
As per my last post on this project, I am doing to do a post regarding the statistics of 16 crypto projects, and also the result of grid trading BTC and ETH using a grid trading Bot (I used Pionex). The total amount used was $100 per project so far, and this was over 20 weeks. So $5 per week.
PHA (+27%) is still the best performing asset. NEAR protocol, however, is down by over 50%. Overall, I am still heavily in the red. Still better than last week, I suppose? Altcoins have been very bearish due to the turbulence in the markets recently
I am down at this point by -13.46%, or about $242.35. Good opportunities to continue DCA, and I am hoping for good gains during the bull market, Gotta stay positive
The crypto projects I dollar cost averaged into were a small assortment. I must disclose that I used Binance for this, as it was the most cost effective. Namely BTC, ETH, BNB, MATIC, DOT,ADA, LINK, ALGO, ATOM, GALA, WOO, NEAR, ATA, PHA, XVS, FTM. The reason for the weird assortment is because I wanted to see the way altcoins would move in the market as well.
I may add one or two more tokens to this, and any suggestions are welcome :) - I got a few suggestions to add VET, DUSK, or THETA since they are available on the binance auto-invest feature. I may add one of these next time
Thank you for the read! have a lovely rest of your day. Stay safe, and stay hydrated!
https://wbtc.network/dashboard/audit
Since inception WBTC has been fully back with onchain proof of reserves. Stop spreading fake news from shorts trying to cause more market chaos.
Go to the burns section(redemptions) and you can see burns are being processed. Alameda were minting or burning WBTC like any customer would, they do not control the reserves or creation, they have nothing to do with it.
The arb is not instant because verified merchants have to do the burning. Don’t sell your WBTC for a loss, it is fully backed and you can see for yourself in the link above. If you are afraid just redeem your wbtc for BTC at a 1:1 basis from the merchants listed in the above link.
The Cointest is a contest created to encourage people to write about cryptocurrencies in a more serious way. The round which ended this month was the round for some coin inquiries and Moons were part of the list of coins.
I decided to make an effort of style: Try to write mirroring arguments for both Pro and Con arguments. I believe more or less equally in both arguments and I thought I'd share them with you all since CoinTest is not heavily read:
Moons: The best idea ever !
Moons are the community points of the cryptocurrency subreddit and are also governance tokens. In this short demonstration, we will discuss why Moons may be the best idea reddit ever had. After a short explanation of what moons are we will discuss how they work on different levels: Governance, Distribution and Use-case.
Moons are tokens existing on Arbitrum Nova. They are distributed to people contributing to r/cc.
Instead of being rewarded through a process limiting competition: for example everyone who has more than 1000 monthly Karma and submit to a cointest has an allocation equal to any other members, moons are rewarded depending on the popularity of your contributions.
Moons can be exchanged and sold. They can also be used to weight in on decisions made to change their distribution or to change the rules of the sub.
Governance: The biggest success of Moons
If one thing should be remembered about Moons, it is their function as governance Tokens. This succeeds on multiple accounts:
-Moderators have a lot of power and can skew the votes, which puts the power in dependable hands
-If people sell their moons then Governance moons are lost (Governance moons are different from Moons since your account has only Governance power for the Moons which were acquired through distribution) which helps people to hodl !
-Self-Governing through tokens is a good idea since people have a lot on the line for the success of the Sub !
These points are great but they are supported by an even better system of distribution !
Distribution: Moons for everyone
Clearly the way moons are distributed is brillant. Giving moons for the best content creates an incentive to strive for the best content possible. The moderator allocation creates an incentive for moderators and allow the to have a real voice in governance. Also a lot of governance has made it very difficult to game the system creating distribution of wealth !
Use-case: The best way to use Moons
Moons are not just governance tokens but they also have usecases ! This is cool as more and more initiative will take place people will have opportunities to use their moons. The way moons are currently designed they can be moved really fast thanks to Arbitrum Nova and for very cheap. This will allow staking, gaming and many other opportunities !
Conclusion: Moons are currently Succeeding (it was saying failing I must have mixed both texts :x)
Moons are clearly succeeding on multiple account, without even discussing how governance being skewed towards moderators can help a sub to thrive we can see that there is brillance in their design. A way to continue on this road would be to continue to develop cool uses for moons on reddit. Right now we are heading to a good place where usecase and governance will strive.
And now the FUD:
Moons: The worst idea ever !
Moons are the community points of the cryptocurrency subreddit and are also governance tokens. In this short demonstration, we will discuss why Moons may be the best idea reddit ever had. After a short explanation of what moons are we will discuss how they fail on different levels: Governance, Distribution and Use-case.
Moons are tokens existing on Arbitrum Nova. They are distributed to people contributing to r/cc.
Instead of being rewarded through a process limiting competition: for example everyone who has more than 1000 monthly Karma and submit to a cointest has an allocation equal to any other members, moons are rewarded depending on the popularity of your contributions.
Moons can be exchanged and sold. They can also be used to weight in on decisions made to change their distribution or to change the rules of the sub.
Governance: The biggest failure of Moons
If one thing should be remembered about Moons, it is their function as governance Tokens. This fails on multiple accounts:
-Moderators have a lot of power and can skew the votes, which puts the power in a few hands
-If people sell their moons then Governance moons are lost (Governance moons are different from Moons since your account has only Governance power for the Moons which were acquired through distribution) which punish people who sell.
-Self-Governing through tokens is a bad idea since people have a lot on the line to stop others from the sub and from earning moons.
These points are great but they are supported by an even worse system of distribution !
Distribution: Moons for a few
Clearly the way moons are distributed is awful. Giving moons for the most popular content creates an incentive to strive for echo chambers. The moderator allocation creates an incentive for moderators and skews governance towards them. Also a lot of governance has made it very difficult to earn moons for a lot of people creating concentration of wealth !
Use-cases: The worst way to use moons
Moons are not just governance tokens but they also have usecases ! This is bad as more and more initiative will take place people will have opportunities to use their moons and lose their governance weight. The way moons are currently designed they can be moved really fast thanks to Arbitrum Nova and for very cheap. This will allow staking, gaming and many other ways for moons to fail as governance tokens !
Conclusion: Moons are currently failing
Moons are clearly failing on multiple account, without even discussing how the most voting weight on governance polls is now held by moderators we can see that there are contradiction in their design. A way to repair this contradiction would be to split governance moons and token moons. Right now we are heading to a bad place where usecase and governance will collide.
What do you think about both of these texts =) I hope you enjoyed reading this and that you will partake in the next Cointests !
To clear up any misconceptions early, the founder of Huobi was set to sell 100% of his stake in Huobi. Justin Sun bought what is likely some significant part of the stake if not 100% of it. Officially, he describes himself as an 'global advisor' yet there are many reports of him making very powerful and sweeping changing at the firm, such as taking control of and overhauling entire departments that are of significance. SBF was also rumoured to be involved in the deal as taking part in discussions and meetings. There were also reports that he set on firing significant amounts of staff that were later 'denied' by Huobi but they still said to be possible. Many of the execs left also when Justin came into his management powers. This is also why HT was included in the list of Sun-owned tokens involved in the FTX credit facility allowing FTX users using Sun-owned tokens to withdraw after FTX fell apart, another hint of deeper ties between SBF and SBF.
Now, Huobi published their asset transparency report which is basically a preliminary publishing to their proof of reserves. As is the case with an alarming number of exchanges, their proof of reserves is only a snapshot, after which funds can be liquidated, shifted or manipulated any way they like if they so choose. Regardless, the reports paints a strange picture.
50% of the funds in Huobi reserves are made up of TRX(~15%) and HT(~35%) tokens. This may pose several issues.
- How much of user funds are actually backed fully and how much is made up of printed TRX and HT tokens?
- This high percentage is made up of exchange controlled funds can be indicative of another 'FTT infinite money scheme'. Sun himself admitted he owns 'tens of millions of HT', likely in addition to what is held on Huobi. With an market cap of only around 700 million, he controls a very significant portion of HT such that a scheme like this is very profitable, and feasible, for him. Him mimicking SBF's FTX-Alameda-similar situation is not all that unlikely as I already pointed out the links between SBF and Sun.
- Such a high percentage of exchange controlled funds can lead of ease of market manipulation. Especially between the HT controlled by Sun and Huobi itself, Sun effectively can control prices however he likes. We also saw Sun's willingness to do just this as in the FTX credit facility when they blocked deposits of Sun-owned tokens leading to prices rising as high as 4000% above the market price as users desperate to withdraw bought these tokens at any price. Sun(and SBF) also deliberately caused the price spike by limiting token liquidity injection to $13M(supply) when there were about $9B(demand) stuck on FTX. Sun made a killing off of this, as of course HE could withdraw his profits but other users couldn't.
- If user funds do happened to be fully backed, why do exchange-controlled tokens represent half of its reserves? At worst, this bodes of manipulation/fraud and even at best it represents a HUGE single point of failure for Huobi. A fall in price in either token could have disastrous consequences.
Additional to point 1, I can see Sun using customer funds to buy his own tokens to pump his own bags of the many HT and TRX tokens he owns, such that they may have the capital value of the backing but not actually hold the 'physical' coin reserves. But of course, this is just speculation right.
Huobi also abandoned their own stablecoin HUSD(issued by Stable Universal) early this year. More recently, they delisted the token and it depegged all the way to $0.15. This is planned to be replaced by Sun's USDD. Sun's DAO Tron in February named SBF's Alameda Research a whitelisted institution permitting Alameda the rights to mint and the right to burn USDD as well as act as advisor and recommender to the network. Just another of the Sun-SBF ties.
Tldr: Clearly, (as pointed out in point 4), this is a terrible sign. Justin Sun does not have a great track record so in the worst case this cause mean some deep manipulation/fraud. Even in the best case giving the greatest benefit of the doubt it is still terrible to have such a heavy reliance and dependence on the two tokens alone. This situation doesn't look good at all.
https://wublock.substack.com/p/exclusive-the-real-buyer-of-huobi
https://blockworks.co/huobi-stablecoin-plunges-70-as-justin-sun-readies-tron-replacement/
https://blockworks.co/news/crypto-moguls-compete-for-huobi-majority-stake-report
https://cointelegraph.com/news/huobi-global-denies-large-scale-layoffs-and-key-exec-resignations
