FTX Crisis Enters Third Week With Swirl Of Developments

Week three of the FTX crisis began on a down note for crypto investors as new questions arose following the collapse of the digital-asset exchange. The value of all cryptocurrencies dropped to about $788 billion from $820 billion in the 24 hours leading up to 4 p.m. in New York, according to CoinMarketCap.com, a 3.9% decline.

Bankruptcy filings over the weekend indicated that FTX had wracked up $3.7 billion of losses prior to this year, a period that was widely considered to be profitable for the business.

Separately, the hacker that stole as much as $477 million of FTX assets as the exchange was slipping into bankruptcy apparently moved about $200 million to 12 or more digital wallets on Monday after converting ether tokens to renBTC through the RenBridge service. Ren, acquired by FTX affiliate Alameda Research last year, has been used as a money-laundering service, according to blockchain analytics firm Elliptic.

The Grayscale Bitcoin Trust remained at a steep discount to net-asset value after its manager said on Friday that it would not provide cryptographic proof of the bitcoin reserves backing the investment vehicle. The fund closed at 57% of NAV, slightly better than the 55% last week, but its net-asset value fell to $14.42 from $15.20, based on generally accepted accounting principals, as the market price slipped to $8.28 from $8.33.

Bitcoin itself was down 2.7%, falling to $15,826—its first trip below $16,000 since Nov. 9, according to Nomics—while ether skidded 3.1% to $1,105.

Solana’s sol token fell 8.2%. FTX is known to have been a significant investor in the currency.

Bitcoin miners were punished in the stock market. Many operate on slim margins, made thinner as bitcoin depreciates.

Marathon Digital fell 17% to $6.19. Bitfarms, CleanSpark, Riot Blockchain
and Hive
Blockchain Technologies lost 10-15%.

Coinbase, a publicly traded cryptocurrency exchange that is the custodian of the Grayscale trust’s assets, was off 8.9% at $41.23.

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