M3TA Recap

M3TA Recap: November 28 – December 04, 2022
The latest DeFi exploitation called Ankr protocol's name last week with trillions of minted assets at stake while bankruptcy and job lash keep rolling out. Read on for this week's M3TA crypto juice!

Author

Clara Lee

Published

05 Dec 2022

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SUMMARY

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MARKET WRAP

1. Crypto Markets Fly High As The Federal Open Market Committee (FOMC) Proposed The New Interest Rate

CoinDesk - December 6, 2022 at 12:48 a.m. UTC

Cryptos

As BTC and ETH were consistently trading above their Thanksgiving pitstop 2 weeks ago, exceeding $16,500 and $1,200 respectively, it seems as if a new day has yet again dawned on the resilient cryptospace. Although a (narrowly) rising tide lifted all the boats, some boats did make it further than others, which was the case of ETH versus BTC last week when the former consolidated a 10-day 15.4% surge, trouncing the latter’s 7.7% uptick. A widespread consensus of green zones accordingly saw SOL up >4% and ATOM - the Cosmos blockchain tokens - up >3% at the same time. Lost in the limelight of crypto conversation last week was DeFi TVL's correlating increase with the asset price, which shows promising signs of investment trust and considerable assets circulating in the system despite the latest massive code-exploiting hack done to Ankr - a semi-popular DeFi protocol that specializes in providing PoS node infrastructure.

Source: DeFi Llama

 

Insight

The fallout between investors with the defunct FTX has not yet shown signs of relief or optimism, at least not until the imminent hearings concerning their Chapter 11 Bankruptcy scheduled for Dec 16th & 20th take place. Nevertheless, optimism can be seen elsewhere. The Federal Open Market Committee (FOMC)’s confidence in inflation deceleration transpires into their likely intentions to favor a moderate interest rate increase of 50 basis points (instead of continuing the harsh 75), which is expected to cool down the current price pressure a notch further after some improvements in supply chain cost were recorded. This also led the BTC price to pierce through the fine line of $17,000, bringing a beacon of hope for investors to keep a close watch on the testing $20,000 benchmark in the upcoming days.

Equities

As the FOMC decided to abandon their constant pursuit of lofty interest rates, the green field also carried over to the US stock market, albeit until Thursday only. That said, the S&P 500 closed its price above its 200-day moving average throughout weekdays with a solid 1.5% improvement, but inched down by 0.1% last Friday while the tech-heavy Nasdaq moderately declined 0.2% on the same day.

Takeaways

As per M3TA Recap the week before, our take was that FTX calamity no longer had the power to extend its destructive arm directly to the market and the notion continued to remain true for this week, albeit with more subtle suggestions of a recovery on the rise. That said, testing the pricing water takes time and we will continue to follow up closely as new stories unfold, especially ones that are tied to the contagious FTX or events alike. In next week’s Recap, we will feature 2 indicators that will most likely have impacts on both traditional and crypto-related markets: U.S. Commerce Department's durable goods orders for November and the good old consumer sentiment index. Stay tuned!

 

Note: To facilitate your reading flow, we now introduce 3 new sections that cater to your reading preference:

CARDIAC ARREST - shocking news alike

WEAK PULSE - mildly negative news & pre-fall indicators

STRONG PULSE - tech/project development update pieces.

Hope this helps!

 

CARDIAC ARREST

2. $5M Worth of Ankr $aBNBc 'Infinite Mint' Exploited by Hacker

The Defiant - December 02, 2022

Early Dec 2 birds woke up with an alert from Nansen Intern which shows a whopping 6 Quadrillion (15 zeros) worth of aBNBc - Ankr’s reward-bearing tokens for BNB stakers.

Twitter Nansen - Ankr Hack

 

It was later confirmed by Ankr development team that the maximum damage done was estimated at around US$5M.

Twitter Ankr - Ankr Hack

 

Before this, the exploiter had already been able to sprint through Tornado Crash - a virtual currency mixer that provides anonymous transaction history - so that he could move his illicit assets onto the Ethereum platform. After that, he then moved the acquired tokens to different exchanges such as PancakeSwap and ApeSwap, completely drained these pools in a matter of an hour, pushing the previous $300 price off the cliff to a tiny fraction of a cent. Besides the main storyline, an opportunist trader was also reported to profit from the price dump although the profit is smaller than expected from on-chain data:

Twitter Lookonchain - Ankr Hack

 

Suspicions are revolving around whether this was an inside job since the wallet address was traced back to one of Ankr’s development holders, or was it a merely calculated move orchestrated by hackers who managed to compromise the private key and exploit a shoddy code?

M3TA has compiled a Twitter thread dedicated to this event and its future revelations as short update bits. Do follow if you need a real-time updates:

Twitter M3TA - Ankr Hack

 

WEAK PULSE

3. Bitfront Crypto Exchange Shutting Down

Bitfront - November 28, 2022

Bitfront, a crypto exchange backed by Japanese social media firm Line Corp regrettably reported that they are shutting down the exchange platform to continue developing LINE blockchain ecosystem and LINK token economy. Following that, the exchange would be suspending all deposits by December 12, 2022 and withdrawals by March 31, 2023. Investors are requested to remove their assets from the platform by March 31, 2023 at 05:00 (UTC).

 

4. BlockFi - Crypto Lender Platform Ceased Activities Preparing for Bankruptcy and Sued a SBF’s Related Company over His Robinhood Shares

Binance - November 29, 2022
Yahoo Finance - November 30, 2022

Let us expedite the timeline of BlockFi statements before the decision of bankruptcy filing was made:

Nov 9th: In a long thread displaying BlockFi’s next actions post-FTX collapse, Founder and COO of the exchange Flori Marquez claimed that BlockFi is fully functional, citing it has a $400 million line of credit from FTX.US until it was later revealed as we all have known that FTX.US is also filing for bankruptcy, which means the line of credit could be gone.Twitter Flori Marquez - BlockFi

 

Nov 15th: In the “November 14, 2022 BlockFi Update” blog post, the platform admitted that they restricted many activities of investors due to the recent collapse of FTX and its affiliates. They were shocked to hear about the incident and the lack of clarity posed by FTX and Alameda.

Nov 30th: BlockFi tweeted that they had filed for Chapter 11 bankruptcy with FTX US listed among unsecured creditors (a cumulative $275 million loan). Nevertheless, the platform promised that it would explore every possible way to determine the best path for customers.

Twitter BlockFi - BlockFi

 

Just hours after the public bankruptcy announcement, BlockFi carried on filing a complaint against Emergent Fidelity Technologies - the holding company for Robinhood Markets (HOOD) shares, citing that the exchange is owed the shares after SBF, through Emergent, entered a pledged agreement with BlockFi to recover payment obligations of Alameda Research.

 

5. BNX Tokens Plunged Over Rumors Of Internal Selling Treasury Tokens

Crypto News - December 04, 2022

BinaryX - a cryptocurrency ecosystem is facing rumors that its developers were selling treasury tokens which consequently caused the price to drop more than 50% in one day. The platform later tweeted that the rumors were untrue and that they would buy back $BNX soon.

Twitter BinaryX - BNX Tokens Plunged

 

Lookonchain had a thread explaining the phenomenon with regard to data insight, which we are more inclined to comprehend than air-thinned speculations.

Twitter Lookonchain - BNX Plunged

 

6. KuCoin APR Skyrocketed

Decrypt - December 02 2022

Last week, crypto exchange Kucoin advertised crazy Dual Investment APRs of 233.15% on Ethereum, 253.28% on Bitcoin, and 100% on Tether deposits on the same day which drew massive attention to many users. This made its 24H volumes to be the 5th biggest CEX by normalized value, reported by CoinGecko. These absurd APRs raised many questions since Kucoin previously had posted Proof of Reserve that was not audited by third parties. It is said that the official Kucoin Twitter account and Lyu - the CEO of Kucoin were hiding rumors as of the insolvency of the exchange.

 

7. Crypto Miner Genesis Digital Received an Investment of $1.5B from Alameda Research

CoinTelegraph - December 03 2022

The largest venture investment made by Alameda Research was into the cryptocurrency mining startup Genesis Digital Assets. The investment was made before FTX bankruptcy took place with the participation shared by Sam Bankman-Fried. According to the paperwork, Alameda allocated the funds at four distinct times: $100 million in August 2021, $550 million in January 2022, $250 million in February 2022, and $250 million in April 2022.

 

8. Latest job slash in the crypto industry: Bybit and Swyftx

CoinTelegraph - December 04 2022

CoinTelegraph - December 05 2022

According to Ben Zhou - co-founder and CEO of Bybit, it is essential for the organization to downsize a number of employees since the company was suffering losses.

Twitter Ben Zhou - Bybit Staff Cutdown

 

Collin Wu - an independent reporter said that the layoff ratio was 30% in June this year and 3 months worth of salary would be sent to affected employees. The first stealth layoffs were witnessed in June due to a claim of unsustainable expansion. This is possible since Bybit's staff had increased from a few hundred to over 2,000 in just two years.

Twitter Collin Wu - Bybit Staff Cutdown

 

Towards the Oceania coast, another major job cut is looming at Swyft. Although the firm claimed that they had no exposure to FTX, it seems that the Australian-based crypto exchange had envisioned a dire picture in FTX’s shoes or other potential black swan events which could cause a sharp fall in global trade volumes in the first seasons of 2023 if they do not take any precautions now. Unfortunately, it is at the cost of 90 employees. Alex Harper - Co-Founder of Swyftx illustrated that the company would be at less risk in decision-making and the operation costs would ease up if a percentage workforce was laid off. In addition, a Swyftx spokesperson disclosed that the team being most affected by the staff cut was the research and development team.

 

STRONG PULSE

9. Solana-centric Crypto Wallet Phantom is Expanding its Support to Ethereum and Polygon

Techcrunch - November 29 2022

Phantom - the most popular wallet on Solana is a non-custodial web3 wallet that is used to manage cryptocurrencies and provides access to decentralized services. Brandon Millman, CEO and co-founder of Phantom said that the innovation was “to bring communities together from across web3 with a safe and easy-to-use self-custody product that is suitable for mainstream adoption.”

Phantom is expanded to support 2 proof-of-stake blockchains; namely Ethereum and Polygon. As of now, the new wallet is live in beta mode on Phantom’s browser, iOS, and Android app with the aim of a public launch in the first quarter of 2023. The Wallet will be integrated with the Ethereum ecosystem which was seen as “the only place for users and developers to interact with the world of web3”, said Millman, and especially, will be integrated with Polygon to build a wallet compatible with the layer2 blockchain ecosystem.

The wallet is also announcing its new tool that will help add some cohesion to NFTs, games, and apps powered by Polygon. Thus, Millman noted that Phantom would later think about integrating its cryptocurrency wallet with additional blockchains and non-custodial and self-custodial systems would be a hot topic. Through its automated alerts of potentially dangerous transactions or websites that could compromise people's wallets, assets, or permissions, the non-custodial wallet also intends to concentrate on security and safeguard users against spam NFTs and phishing attempts. Long-term, according to Millman, Phantom will resemble how Google Chrome has grown to be associated with the internet and Web 2.0, serving as the "onboarding point and discovery point for people entering web3."