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The last few weeks have been full of emotion in the crypto space as the collapse of one of the largest crypto exchanges marks a second black swan event this year. The first being the fallout of Terra, the company behind LUNA and UST. Further, the ASX has been forced to scrap its blockchain replacement for the CHESS system after a report found it would be unable to do so effectively.
Of course, occasional losses of confidence are nothing new to the crypto industry, which some consider is still in its infancy.
In the wake of the crisis, El Salvador has begun to purchase one Bitcoin per day, being matched in this endeavour by Tron CEO Justin Sun, and Nike has launched its .SWOOSH Web3 platform.
Sam Bankman-Fried, founder and former CEO of FTX, has been replaced, with both he and his companies under investigation in the wake of the collapse of FTX.
FTX, one of the largest cryptocurrency exchanges in the world, has filed for bankruptcy in the United States, as well as its US-based trading firm and sister company, Alameda Research and 130+ other FTX Group businesses. Sam Bankman-Fried resigned as chief executive as reports of the vast structural weaknesses of his companies led to the outright collapse. He is reportedly ‘under supervision’ by Bahamian authorities.
Reports have suggested that there could be upwards of 1 million creditors owed money, with approximately $3.1 billion owed to the top 50 creditors.
Bankman-Fried has been replaced by John J. Ray III, a prominent American lawyer known for overseeing the liquidation of Enron in 2004. Ray has been shocked at the degree of mismanagement, having remarked in court filings on the company:
“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated, and potentially compromised individuals, this situation is unprecedented.”
Local FTX Australia entities have entered administration, which hands over control to licensed insolvency practitioners. The administration identified that almost 30,000 Australians will likely be creditors and unsure whether those funds can be recovered.
The aftershocks of FTX’s eruption have been felt throughout the world of crypto. Bitcoin has dropped to its lowest level in roughly two years, with a multitude of trading firms already on the back foot, given the market collapse earlier this year.
Nike has announced it will launch a Web3 platform on the Polygon blockchain, hosting virtual experiences and housing NFT apparel that may be purchased, traded, and used in other immersive applications.
SWOOSH aims to champion athletes and promote the future of sport, fostering a new digital community experience wherein Nike can showcase its virtual creations. At the SWOOSH domain, Nike Members will be able to collect interactive digital objects, like jerseys and shoes, to be worn in digital games and immersive experiences. There will also be opportunities for members to access physical products or events.
At present, SWOOSH is in beta, with registration required to join. The opening will occur later this month. Nike plans to release its first digital collection next year, emphasising community input significantly.
Nike has been steadily adopting Web3 technology in recent years, acquiring NFT start-up RTFKT Studios in 2020. The launch of SWOOSH indicates a dedicated approach to embracing Web3 and the commitment of Nike to realise its ambitions by creating new communities, as well as using what tools they can to encourage engagement.
Nayib Bukele, the president of El Salvador, has announced that the country is purchasing one Bitcoin per day from November 18.
El Salvador was the first country to recognise Bitcoin as legal tender in September of 2021. While the investment has yet to pay off—so far having netted losses of roughly US$60 million—the nation insists that these are early days and that the adoption of Bitcoin is a long-term project.
Previously, the International Monetary Fund (IMF) warned El Salvador that its use of Bitcoin posed significant risks with regard to their financial institutions and integrity, as the country bears considerable national debts.
That said, El Salvador seem to be doubling down on their integration of Bitcoin into the nation. Whether this approach will pay off for El Salvador is anyone’s guess. The plan to make daily BTC purchases is likely linked to the fall in price resulting from the collapse of FTX.
Lending confidence to the decision made by El Salvador, Justin Sun, founder and CEO of the Tron blockchain, announced on Twitter that Tron DAO would match the country’s Bitcoin purchases, storing BTC in its reserve.
The ASX has decided to scrap their blockchain-based project, which has been in development for seven years and cost roughly A$250 million.
The Australian Securities Exchange (ASX) made the announcement in the wake of a report by Accenture.
The report found that the blockchain-based system would not be capable of replacing the existing Clearing House Electronic Subregister System (CHESS). The blockchain-based system—in development for seven years and costing around a quarter of a billion dollars—had been scheduled for launch in 2021 but was consistently delayed due to ongoing development issues.
It has been reported that, despite this news, the end of the blockchain-based project will not interrupt the three other businesses’ building applications on the ASX’s blockchain platform, Synfini.
Long seen as a sign of confidence in blockchain technology, its failure marks a blow to said confidence, particularly in the wake of the collapse of FTX. The report by Accenture found that the system was only 63% complete, despite its years in development, and ASX now finds itself back to square one—searching for a replacement solution for the 25-year-old CHESS system.