A little over six months after FTX’s dramatic collapse, the crypto industry can finally begin to analyze the impact of the debacle. The rapid domino effect on other crypto companies drained liquidity from the industry and lengthened the crypto winter, with Silvergate Bank, BlockFi, and Genesis Global Capital among others affected by the stock market collapse.
FTX’s bankruptcy has also impacted the crypto regulatory landscape, as authorities crack down on companies — in some cases using controversial methods — to prevent ever-greater blending of traditional finance with cryptocurrencies.
Bittrex, Nexo and Unbanked are among the companies that have shut down their US businesses in recent months citing regulatory pressure. Coinbase CEO Brian Armstrong said this week that China stands to benefit the most from restrictive crypto policies in the US, but only time will tell if that’s true.
Due to increasing regulatory scrutiny, companies are also reviewing their operations. In response to the relief from crypto firms, Binance has even considered buying a bank in recent months, its CEO Chanpeng Zhao said. Now the crypto exchange is gearing up for a layoff that will bolster its compliance and regulatory capabilities.
As the industry digests recent events, FTX’s new management claims that FTX 2.0 could launch as early as next year, hopefully in time to join the club of crypto companies aspiring to be in business after November 2022 remain.
This week’s Crypto Biz also covers Tether’s Bitcoin (BTC) mining operations in Latin America, Tabi’s funding round, and Nvidia’s efforts to power the next generation of artificial intelligence (AI) machines.
Buying a bank won’t solve the cryptocurrency debanking problem – CEO of Binance
Binance is unlikely to buy any banking institutions, but it plans to make minority investments in financial institutions that “hopefully will result in them becoming more crypto-friendly,” Zhao commented on growing concerns that crypto companies could lose their bank accounts. The collapse of several US banks in 2023 has raised concerns that the pool of crypto-friendly banks is shrinking. Former key banking partners, Silvergate, Silicon Valley Bank and Signature Bank all capitulated this year. The exchange is also reportedly exploring a solution to reduce counterparty risk by allowing institutional clients to keep their trading collateral with a bank instead of on the crypto platform.
Tether enters Bitcoin mining in Uruguay
Stablecoin issuer Tether has announced plans to launch bitcoin mining operations in Uruguay in partnership with a local licensed company. According to Tether, the company would use renewable energy sources to conduct “sustainable” bitcoin mining and plans to hire additional team members. The mining announcement followed Tether’s plan to “regularly invest up to 15%” of its profits in BTC purchases. Tether cited Uruguay’s ability to generate 94% of its electricity from renewable sources such as wind, solar, and hydropower, as well as its reliable grid. Vacancies on the site also indicated expansion into South Africa and Brazil.
Nvidia introduces AI supercomputer to create ChatGPT successor
Nvidia continues to fuel the race to develop AI tools and applications as the company has announced plans to release more products. Its CEO, Jensen Huang, recently unveiled a new AI supercomputer platform called the DGX GH200, which will help tech companies develop successors to the popular AI chatbot ChatGPT. Big tech companies like Microsoft, Meta and Alphabet are expected to be among the pioneers of supercomputing gear. Microsoft is also developing its own AI chip and says it wants to use it to cope with the increasing development costs for internal and OpenAI projects.
BNB NFT marketplace Tabi raises $10 million in angel funding
Non-fungible token (NFT) market Tabi, formerly known as Treasureland, has closed a $10 million angel funding round from venture capital firms Animoca Brands, Draper Dragon, Hashkey Capital, Infinity Crypto Ventures and Youbi Capital was launched. Alongside NFT trading and Launchpad functionality, Tabi converts users’ on-chain activity into “experience points” that can be exchanged for future airdrop rewards and earnings. The protocol also includes a gaming platform that bundles blockchain gaming transactions and entertainment. The funds will primarily be used to develop Tabi’s gaming ecosystem and build an on-chain identity protocol.
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