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Binance Backflips on FTX Bailout Within a Day

In one of the most dramatic weeks in crypto, Binance has backed out of a non-binding letter of intent to acquire FTX within a day of seemingly agreeing to bail them out (subject to due diligence). The effect of this news has been felt across the crypto market, with several cryptocurrencies dropping to two-year lows and the global crypto market cap dropping below $800 billion USD.  

In other bleak news, one of Australia’s first crypto ETFs, which launched in May of this year, have been delisted by Cosmos Asset Management. The chief reasons cited have been underperformance, high expenses and the present cooling of the crypto markets. 

Further, Facebook parent company Meta has announced that Instagram will soon have an integrated NFT marketplace. This announcement was made shortly after Twitter developers stated their intent to increase NFT features on Twitter. 

Finally, Coinbase has sought permission to weigh in on the legal case between the SEC and Ripple , declaring their support for the XRP creator by seeking to provide the court with their expertise and additional information in the form of an amicus brief. 

Binance backflips on FTX bailout within a day 

In a stunning turn of events, Binance has backflipped on its non-binding letter of intent to bailout rival exchange FTX in the wake of insolvency rumours.  

On November 9, Binance CEO Changpeng Zhao (CZ) tweeted that Binance intended to acquire rival exchange, FTX, only to back out of the deal a day later due to “corporate due diligence issues” and “alleged US agency investigations” associated with FTX.

The events sparked mass volatility across the wider cryptocurrency markets, with Bitcoin and other cryptocurrencies plunging to two-year lows.  

What was the catalyst for all of this?  

Earlier this week, a report conducted by CoinDesk revealed that Alameda Research, a crypto hedge fund and trading firm founded by FTX CEO Sam Bankman-Fried (SBF) had its finances deeply intertwined with FTX. According to the documents, Alameda’s balance sheet was replete with FTX’s native token FTT – a manufactured asset that was illiquid.  

Shortly following the news, CZ took to Twitter to announce that Binance would be liquidating its huge position in the FTT token, causing panic amongst investors and resulting in an almost 90% collapse of the asset.  

CZ then followed up with an update stating that FTX has reached out to request help from Binance following a “liquidity crunch” caused by customers withdrawing their assets from FTX. Both CZ and SBF came to an agreement for Binance to fully acquire FTX pending due diligence.

After conducting due diligence, Binance confirmed it would not pursue the acquisition.  

Australian asset manager to delist crypto ETF’s after six months 

In the same year that one of Australia’s first crypto exchange-traded funds (ETF) launched — they’ve being delisted after falling more than 19% since their launch in May. 

On November 2, Cosmos Asset Management, a Sydney-based investment firm, announced its intention to revoke its Bitcoin and Ethereum ETFs which are listed on the Cboe Australia stock exchange.  

Despite initial buzz surrounding the launch of the ETFs in May, trading has been well below expectations given the broader crypto market conditions and a bear market that is likely to have contributed to their demise.   

Hollie Wright, Company Secretary for Cosmos Asset Management, announced that the funds would be delisted from the close of trade yesterday, 8 November.   

This marks a disappointing final chapter for one of Australia’s first crypto ETFs. Cosmos has said the company would return funds to investors and cover the closure cost of the funds. 

Twitter and Instagram looks to integrate further with NFTs 

Meta has announced plans to launch its own NFT marketplace on Instagram, and Twitter has introduced an upcoming feature called NFT Tweet Tiles. 

According to Meta, Instagram will soon have an integrated NFT marketplace. It will be designed to function as an NFT toolkit, allowing users to buy, sell, mint and showcase their NFTs on the Instagram app and on other platforms.

A select group of hand-picked US-based creators will conduct the initial testing of the new marketplace, with current plans being to ultimately broaden access to creators across the globe. 

Stephanie Kasriel, the Head of Commerce and Fintech at Meta, indicated the new marketplace will exist to support creators, making it easier for them to profit from their work, citing how blockchain and Web3 technologies solve a host of issues commonly faced by creators.  

The new NFT marketplace is set to run on the Polygon blockchain—an Ethereum layer-2 scaling solution—and, at least initially, will incur no gas fees. Meta has promised to charge no fees for use of the marketplace, and has also said it will cover any Ethereum gas fees, up until 2024.

Twitter developers have also announced a new feature called NFT Tweet Tiles, allowing users to visually showcase NFTs and link to NFT marketplaces. Developers announced that tweeting links to NFTs from selected marketplaces will show a larger image with some useful details.  

NFT discussions on Twitter had grown tremendously according to a trend report released in March, but have since been in significant decline. The new feature could prompt an increase in interest in the asset class and boost NFT visibility.  

The move represents another lateral move from the tech giant, who continues to hunt for new earning opportunities in the face of falling revenues and a depleted share price.  

Coinbase seeks to support XRP against SEC 

Coinbase has joined a growing list of allies in support of Ripple’s legal battle against the SEC, seeking permission to submit an amicus brief on the basis of ‘fair notice’. 

Coinbase, the largest crypto exchange in the United States, has filed legal documents seeking to support Ripple in their court battle brought by the US Securities and Exchange Commission (SEC). 

Coinbase has sought to argue, in a proposed amicus curiae brief, that delisting XRP following the lawsuit resulted in significant losses to Coinbase’s customers and caused XRP’s market value to decline by $15 billion USD.  

For reference, an amicus curia (friend of the court) is an individual or organisation who, while not party to a legal case, may assist the court by offering insight or information. 

The brief offered by Coinbase indicates it previously wanted the SEC to provide some assurance and certainty for the digital asset industry and defended Ripple’s position—chief among their concerns is the manner in which the SEC went about enforcement; essentially by surprise. 

Ripple has been engaged in this lawsuit since 2020, adding to the tensions between digital currency networks and exchanges and conventional regulatory authorities. While the SEC have sought to argue that Ripple’s conduct is illegal, alleging that Ripple’s issuing of XRP amounted to an unregistered security offering, Ripple argues that government agencies can’t simply allege a violation of law based upon their own internal findings without providing fair notice of their assessment.  

While both sides have accused the other of impropriety through this drawn out legal battle, a dozen independent entities have pledged their support for Ripple. It is still uncertain as to when the court will come to a conclusion. 

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