FTX Ignites and Affects the Wider Crypto Industry, Forcing Regulators to Respond: Hodler's Digest, November 6-12

Available every Saturday, Hodler's Digest will help you follow every major news story that happened this week. The best (and worst) quotes, adoption and regulatory highlights, major coins, predictions and more - a week on Cointelegraph in one link.

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An earthquake rocked the crypto space this week, its impact felt in many related stories regarding FTX, Alameda Research and Binance. Although the bad news fell this week, the suspicions regarding FTX's status seem to have started on November 2. The concerns centered on a large number of FTX tokens () held by Alameda (Sam Bankman-Fried, aka SBF, founded Alameda and co-founded FTX). On November 6, his important position in FTT. FTX withdrawal issues surfaced on November 7, symptomatic of a bank run. Binance expressed interest in buying FTX but citing concerns on November 9.

Other developments throughout the week included covering exchange pullbacks and news of the situation affecting other big players, as well as .

Nov. 11 as well as FTX, Alameda and FTX US which have filed for Chapter 11 bankruptcy in the United States. Around 130 FTX Group entities are filing for bankruptcy.

On November 10, FTX had its assets frozen and its registration suspended by the Bahamian Securities Commission, based on suspicion of mismanagement of client funds. A provisional liquidator has been elected by the Supreme Court of the Bahamas, which means that FTX must now obtain permission to touch one of its assets. FTX is primarily based in the Bahamas, within its jurisdiction. The situation regarding has been tricky, with some withdrawals apparently approved and funds leaving the exchange. Additionally, FTX negotiated an agreement with Tron to allow holders of TRX, BTT, JST, SUN and HT to exchange assets from FTX to external wallets without penalty.

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Given the situation with FTX, there has been talk of requiring crypto exchanges to show proof of reserves, which would essentially provide assurance that the exchanges have enough assets to cover their debts. Chainlink Labs has developed a product that aims to facilitate this trading process. showed up with the intention of providing some sort of proof-of-stakes system (not necessarily Chainlink's product, but some type of system in general), including Binance, which is on a proof-of-stakes system.

This week's unrest has prompted US President Joe Biden's administration to keep tabs on the crypto space, with US regulators helping with enforcement. "The administration [...] has always maintained that without proper oversight, cryptocurrencies risk harming ordinary Americans," White House press secretary Karine Jean-Pierre said during a briefing. press on November 10. “The most recent news further underscores these concerns and highlights why careful regulation of cryptocurrencies is indeed necessary.”

The U.S. midterm elections were held on November 8. The crypto space was present during the election, spanning a slew of positions and stances on industry regulation held by the politicians involved. Among the mix, J.D. Vance, a well-known Bitcoin owner, won a seat in the Ohio Senate. Crypto-friendly figures Tom Emmer and Patrick McHenry also retained their positions in Minnesota and North Carolina, respectively. Brad Sherman, who is less favorable to the crypto space, however, won re-election in California.