Can FTX’s bankruptcy bring order to its chaos?
Welcome back to Chain Reaction.
Last week on the podcast, we talked about the FTX collapse, which is still ongoing. This week, we’re taking a break from our Thursday news episode for Thanksgiving, but we had plenty of stories for you on the TechCrunch website, including some from our crypto event in Miami last week.
Before we get into the nitty gritty, Anita wanted to share a personal note:
Hi everyone! It feels bittersweet to share that my time at TechCrunch has come to a close, and with it, my involvement with the Chain Reaction newsletter and podcast. I have learned so much about the wild world of crypto alongside you all each week. I’m sad to say goodbye, but I know you’ll be in great hands with Jacquelyn and the rest of the TechCrunch team. As for me, please feel free to connect on Twitter, where I’m sharing more about my professional next steps. Thanks for reading and listening every week. I appreciate you all so much!
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this week in web3
Here are some of the biggest crypto stories TechCrunch has covered this week.
Hearings that will determine the fate of FTX, once one of the largest crypto exchanges globally, began Tuesday in the U.S. Bankruptcy Court for the District of Delaware. “We are here on an unprecedented matter and I don’t say those words lightly,” James Bromley, a partner at Sullivan & Cromwell and co-head of the firm’s global restructuring practice, said during the hearing. “This is a first-day hearing well over a week after they were filed; that in itself is uncommon. But what we have here [ … ] is a different sort of animal.”
NFT marketplace Magic Eden is integrating with the Ethereum scaling layer-2 blockchain Polygon to dive deeper into the blockchain gaming and NFT ecosystems, the companies announced on Tuesday. The expansion aims to provide Magic Eden the ability to support Polygon’s ecosystem of game developers and creators. The Polygon network hosts some of the biggest web3 gaming projects and publishers like Ubisoft, Atari, Animoca Brands, Decentraland, Sandbox, among others.
On November 14, Nestcoin, one of the startups leading crypto and web3 efforts in Africa, announced that it was laying off several employees. At least 30 employees across various departments were let go, while those who were left at the company had their salaries slashed by as much as 40%, according to people familiar with the matter. The news is, in part, connected to the downfall of crypto exchange FTX, according to chief executive officer Yele Bademosi.
Genesis, a digital assets financial services firm, may be in hot water as it looks to raise fresh capital for its lending unit or potentially face bankruptcy if it can’t, according to a report by Bloomberg. “We have no plans to file bankruptcy imminently,” a Genesis spokesperson said in an emailed statement to TechCrunch on Monday. “Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.”
Binance co-founder and CEO Changpeng Zhao, also known as CZ, commented on the collapse of FTX at TechCrunch Sessions: Crypto 2022. He played down his personal role in the series of events that ultimately led to FTX filing for bankruptcy. “I still don’t think I have that much influence. I think we were the last straw that broke the camel’s back. It’s not a straw that is really strong,” he told TechCrunch’s Anita Ramaswamy. “There’s a whole bunch of stuff that built up to it. I just may have happened to be the last thing that pushed it.”
the latest pod
This week, we skipped the news episode thanks to good ol’ Thanksgiving as we mentioned above. But, in Chain Reaction’s Tuesday episode we’re playing a super timely recording from Anita’s panel on stage last week with Binance founder and CEO Changpeng “CZ” Zhao. CZ sent a number of shocks through the crypto ecosystem in recent weeks so Anita dived into:
- His tweets about rival exchange FTX that set off a firestorm and whether he anticipated their impact
- What Binance is doing to gain user trust and demonstrate transparency despite its regulatory troubles across the globe
- Binance’s revenue streams and strategy to weather a crypto downturn that just got much, much worse
follow the money
- Carv valued at $40M as investors race to back web3 identity builders
- Zulu banks $5M for its LatAm digital wallet amid shaky ground for crypto
- Gaming developer Thirdverse raises $15 million to build web3 and VR gaming studio
- Privacy and Ethereum-focused infrastructure startup Nucleo, raises $4 million seed round led by Bain Capital Crypto and 6th Man Ventures
- NFT utility platform Tropee closed a €5 million in a seed round led by Tioga Capital
This list was compiled with information from Messari as well as TechCrunch’s own reporting.