Just over six months after FTX’s dramatic collapse, the crypto industry can finally begin to analyze the effects of the debacle. The rapid ripple effect on other crypto firms has drained cash from the industry and prolonged the crypto winter, with Silvergate Bank, BlockFi and Genesis Global Capital among those affected by the collapse of the exchange.
The bankruptcy of FTX has also affected the crypto regulatory landscape, with authorities cracking down on companies – employing controversial methods in some cases – to avoid a deep blending of traditional finance with cryptocurrencies.
Companies that shut down their US operations citing regulatory pressure in recent months included Bittrex, Nexo and Unbanked, to name a few. Coinbase CEO Brian Armstrong said this week that China will benefit the most from restrictive crypto policies in the United States, but only time will tell if that’s true.
Companies are also reviewing their business operations due to increased regulatory scrutiny. In response to the unbanking of crypto firms, Binance 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, new FTX management says FTX 2.0 could launch as early as next year, hopefully in time to join the club of crypto companies struggling to stay in business after November 2022.
This week’s Crypto Biz also examines Tether 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 Bank Won’t Solve Crypto’s Unbanking Problem — Binance CEO
Binance is unlikely to buy up banking institutions, but it plans to make minority investments in financial institutions that “hope to influence them to be more crypto-friendly,” Zhao commented on growing concern that crypto companies are unbanked. The collapse of several US banks in 2023 has raised concerns about the shrinking pool of crypto-friendly banks. Former key banking partners Silvergate, Silicon Valley Bank and Signature Bank have 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 in a bank rather than the crypto platform.
Tether gets into bitcoin mining in Uruguay
Stablecoin issuer Tether has announced that it will launch Bitcoin mining operations in Uruguay in collaboration with a licensed local company. According to Tether, the company would use renewable energy sources for “sustainable” bitcoin mining and planned to hire additional team members. The mining announcement followed Tether’s plan to “regularly allocate up to 15%” of its profits to BTC purchases. Tether cited Uruguay’s ability to generate 94% of its electricity from renewable sources like wind, solar and hydro, and its reliable grid. Job postings on its website also suggested expansion into South Africa and Brazil.
Nvidia presents an AI supercomputer to create successors to ChatGPT
Nvidia continues to forge ahead in the race to develop AI tools and applications as the company has revealed plans to launch more products. Its CEO Jensen Huang recently unveiled a new AI supercomputer platform called the DGX GH200 that will help tech companies develop successors to the popular AI chatbot ChatGPT. Big technology companies such as Microsoft, Meta and Alphabet are expected to be among the pioneer users of supercomputer equipment. Microsoft is also developing its own AI chip, which says it intends to meet rising development costs for internal and OpenAI projects.
BNB NFT Tabi Market Raises $10M in Angel Funding
The Tabi Non-Fungible Token (NFT) Market, formerly known as Treasureland, has completed a $10 million angel funding round launched by venture capitalists Animoca Brands, Draper Dragon, Hashkey Capital, Infinity Crypto Ventures and Youbi Capital. Along with trading and NFT launch features, Tabi converts users’ on-chain activities into “experience points”, which can be redeemed for future rewards and airdrop earnings. The protocol also contains a gaming platform aggregating blockchain gaming transactions and entertainment. The funds will primarily be used to develop Tabi’s gaming ecosystem and build an on-chain identity protocol.
Crypto Biz is your weekly pulse of the activity behind blockchain and crypto, delivered straight to your inbox every Thursday.