Autor Cointelegraph By Zhiyuan Sun

Breaking: FTX’s Binance rescue deal falls apart in less than 48 hours

Breaking: FTX’s Binance rescue deal falls apart in less than 48 hours

Uverejnil používateľ | nov 9, 2022 |

On Nov. 9, less than 48 hours after Changpeng “CZ” Zhao, CEO of cryptocurrency exchange Binance, announced his intentions to bail out troubled competitor FTX, the firm stated that it would not be pursuing the deal. Binance had signed a nonbinding letter of intent on Nov. 8 that allowed the firm to either fully acquire the FTX exchange, proceed with a partial acquisition of assets, or walk away from the agreement. “As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com.”Binance explained that initially, it wanted to support the ailing crypto exchange by providing its customers with liquidity; however, issues were “beyond our control or ability to help.” The firm also said, “Every time a major player in an industry fails, retail consumers will suffer,” while adding that the ecosystem will eventually become more resilient with the weeding out of bad players. This is a developing story, and further information will be added as it becomes available.

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Nexo dodges $219M bullet just days before FTX’s solvency crisis

Nexo dodges $219M bullet just days before FTX’s solvency crisis

Uverejnil používateľ | nov 9, 2022 |

According to a Nov. 8 tweet, crypto lender Nexo currently has net zero exposure to the ongoing crisis embroiling cryptocurrency exchange FTX and crypto trading firm Alameda Research. Nexo also explained that it withdrew its entire balance of funds from FTX within “the past few days.” Alex Svanevik, CEO of blockchain analytics platform Nansen, confirmed the story, providing data showing that Nexo withdrew over $219 million from FTX between Nov. 1 and Nov. 8. This also ranks Nexo as the top entity for funds outflow in the past week.The firm appears to have dodged a major bullet, as on Nov. 8, FTX announced that it would halt all non-fiat consumer withdrawals. Continuing with its assessment of the situation, Nexo said that it had a small loan to Alameda Research representing less than 0.5% of its assets. The loan was fully collateralized by digital assets, which Nexo said were sold on Nov. 6. According to the firm, the trade resulted in “100% principal recovery and $0 losses for the company.”.@Nexo has $0 net exposure to FTX/Alameda. As a conservative institution with stringent risk controls @Nexo has safeguarded *all* funds by withdrawing its entire balances from the exchange over the past few days, as evidenced by on-chain data:https://t.co/py8fzBDKbP 1/— Nexo (@Nexo) November 8, 2022Nexo has thus far sidestepped major industrywide risk events this year, including the collapse of Terra, hedge fund Three Arrows Capital and crypto lender Celsius. According to a real-time audit of the firm’s custodied assets, Nexo currently has more than $3.4 billion in consumer liabilities, with a collateralization ratio of more than 100%, making them fully backed by Nexo’s assets. The numbers are attested by United States accounting firm Armanino LLP, which is an auditor certified by the Public Company Accounting Oversight Board.

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Galaxy Digital discloses $77M exposure to FTX, $48M likely locked in withdrawals

Galaxy Digital discloses $77M exposure to FTX, $48M likely locked in withdrawals

Uverejnil používateľ | nov 9, 2022 |

In its latest quarterly earnings call on Nov. 9, blockchain financial services firm Galaxy Digital disclosed that it had an exposure of $76.8 million consisting of cash and digital assets to troubled cryptocurrency exchange FTX. Of this amount, Galaxy Digital said that $47.5 million is currently in the withdrawal process.The day prior, FTX announced it had halted all withdrawals after the combination of a consumer bank run and a devastating price decline in its native FTX Token (FTT), which the exchange uses for collateral, led to a liquidity crisis. Despite the current situation, Galaxy Digital said it has $1.5 billion in liquidity, including $1.0 billion in cash and another $235.8 million in stablecoins, to cushion losses. During the quarter that ended Sept. 30, the company’s partner capital declined by 12% year over year to $1.8 billion, citing the backdrop of a declining cryptocurrency market capitalization.Galaxy Digital primarily derives its revenue from advisory fees, management fees, lending income, mining income and changes in the fair value of investments and derivatives. Year over year, the company’s revenue declined by 84.9% to $32.7 million in the third quarter. This was due to far lower levels of profit from capital investments compared with the same period last year.Going forward, the company plans to complete its reorganization and migrate from the Canadian Toronto Stock Exchange to the United States-based Nasdaq exchange next year. Effective mid-January 2023, co-president Damian Vanderwilt intends to step down and transition to an adviser and board member. From May 16 to Oct. 24, the firm used some of its cash to repurchase approximately $52 million worth of its shares outstanding.

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Bitcoin miner Iris Energy faces $103M default claim from creditors

Bitcoin miner Iris Energy faces $103M default claim from creditors

Uverejnil používateľ | nov 7, 2022 |

According to a new filing with the U.S. Securities and Exchange Commission on Monday, Bitcoin (BTC) miner Iris Energy says it has received a default notice from mining rig manufacturer Bitmain Technologies.The notice alleged that Iris Energy failed to “engage in good faith restructuring discussions” for certain principal payments due on Nov. 8. Additionally, Iris Energy received a separate notice last week from creditors alleging that it “failed to maintain sufficient insurance” and would constitute a default if not remedied within 10 days. Headquartered in Australia, Iris Energy is known for operating mainly Canadian Bitcoin mining centers that fully utilize renewable energy. In October, the company had an average mining hash rate of 3.9 EH/s, representing approximately 1.5% of the Bitcoin network’s mining capacity. As told by Iris Energy, the three debt facilities in dispute are $1 million, $32 million and $71 million worth of equipment financing loans secured by 0.2 exahash per second (EH/s), 1.6 EH/s, and 2.0 EH/s of Bitcoin miners. The firm says that 2.4 EH/s of miners and all of its data center capacity and development pipeline are unaffected by the notice.”The lender to each Non-Recourse SPV has no recourse to, and no cross-collateralization with respect to, assets of the Company or any of its other subsidiaries pursuant to the terms of the Facilities.”It appears that a combination of high electricity costs, lower Bitcoin prices, and increasing network difficulty has caused the firm to fall on hard times. Despite having $53 million in cash and generating over $8.7 million each month in revenue, the firm disclosed that its gross profit only amounts to $2 million monthly at current conditions, well below the monthly principal and interest payments of $7 million. 

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Report: GALA token exploit resulted from public leak of private key on GitHub

Report: GALA token exploit resulted from public leak of private key on GitHub

Uverejnil používateľ | nov 7, 2022 |

According to a new post by blockchain security firm SlowMist on Nov. 7, it appears that the last week’s token exploit affecting GameFi project Gala Games resulted from a public leak of applicable security keys on GitHub. As told by SlowMist, pNetwork, the cross-chain interoperability bridge used by Gala Games on the BNB Smart Chain, had three privileged roles in its smart contract pGALA.“The Admin role is used to manage upgrades and changes to the Admin address of the proxy contract. The DEFAULT_ADMIN_ROLE role is used to manage various privileged roles in the logic (eg: MINTER_ROLE ), and the MINTER_ROLE role manages the pGALA token minting authority.”SlowMist went on to explain that both the DEFAULT_ADMIN_ROLE and MINTER_ROLE roles were controlled by pNetwork during initialization. Meanwhile, the proxy admin contract was an externally owned address responsible for upgrading the pGALA contract. However, the firm posted a screenshot alleging that the plaintext private key for the proxy admin owner address was exposed and publicly viewable on GitHub. Thus, any user with access to the private key could have manipulated the pGALA contract at any time. On Aug. 28, the proxy admin contract owner was replaced, making the protocol vulnerable to an attack.The Gala Games token bridge was exploited on Nov. 3 after a single wallet address appeared to have minted over $2 billion in GALA (GALA) tokens out of thin air and dumped the tokens on decentralized exchange PancakeSwap. Around 12,977 BNB (BNB), worth $4.5 million, was drained from the liquidity pool.Cryptocurrency exchange Huobi alleged the aforementioned activities were a scheme for profit orchestrated by pNetwork. The latter has denied such allegations, while also stating in its post-mortem analysis that “No funds loss happened on the GALA cross-chain bridge. All GALA tokens on Ethereum are safe.”1/2 We strongly condemn as untruthful Huobi’s accusations against pNetwork and we will seek legal action accordingly.We have documented proof showing that pNetwork has acted in good faith, that all actions were agreed upon in advance with GalaGames and that…— pNetwork (@pNetworkDeFi) November 6, 2022

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