More than six months after the terrible collapse of FTX, the crypto industry can finally begin to analyze the effects of the debacle. The immediate ripple effect on other crypto businesses drained liquidity from the industry and extended the crypto winter, with Silvergate Bank, BlockFi and Genesis Global Capital among those hit by the exchange collapse.
The bankruptcy of FTX has also affected the crypto regulatory landscape, with authorities cracking down on companies – using controversial methods in some cases – to prevent the deepening integration of traditional finance with cryptocurrencies.
Companies that have closed their operations in the United States citing regulatory pressure in recent months include Bittrex, Nexo and Unbanked, to name a few. Coinbase CEO Brian Armstrong said this week that China has benefited the most from strict US crypto policies, but only time will tell if this is true.
Companies are also reviewing their business operations due to increased regulatory scrutiny. In response to crypto companies being debanked, Binance even considered buying a bank in the past months, said its CEO Chanpeng Zhao. Now, crypto exchanges are gearing up for a move that will improve compliance and regulatory capabilities.
As the industry examines recent events, FTX’s new management claims that FTX 2.0 could be launched as soon as next year, hopefully in time to join the club of crypto companies trying to stay afloat. in business after November 2022.
This week’s Crypto Biz also looks at 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 crypto’s debanking issue — Binance CEO
Binance is not likely to buy any banking institutions, but it plans to make minority investments in financial institutions that “hopefully influence them to become more crypto-friendly,” Zhao commented on the growing concern of debanked crypto companies. The collapse of several US banks in 2023 has prompted concerns that the pool of crypto-friendly banks is shrinking. Former key banking partners, Silvergate, Silicon Valley Bank and Signature Bank, all resigned 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 a crypto platform.
Tether has moved to mining Bitcoin in Uruguay
Stablecoin issuer Tether has announced that it will launch Bitcoin mining operations in Uruguay in collaboration with a local licensed company. According to Tether, the business will use renewable energy sources aimed at “sustainable” Bitcoin mining and plans to hire additional team members. The mining announcement follows Tether’s plan to “regularly allocate up to 15%” of its earnings to BTC purchases. Tether cited Uruguay’s ability to generate 94% of its electricity from renewable sources such as wind, solar and hydropower, and its reliable grid. Job listings on its website also suggest expansion into South Africa and Brazil.
Nvidia introduces AI supercomputer to create successors to ChatGPT
Nvidia continues to push ahead in the race to develop AI tools and applications as the company reveals plans to release more products. Its CEO Jensen Huang recently unveiled a new AI supercomputer platform called DGX GH200 that 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 some of the pioneering users of supercomputer equipment. Also developing its own AI chip is Microsoft, which claims it intends to deal with rising development costs for in-house and OpenAI projects.
BNB NFT marketplace Tabi raises $10 million in angel funding
Nonfungible token (NFT) marketplace Tabi, formerly known as Treasureland, has completed a $10 million angel funding round seeded by venture capital firms Animoca Brands, Draper Dragon, Hashkey Capital, Infinity Crypto Ventures and Youbi Capital. With NFT trading and launchpad features, Tabi converts users’ on-chain activities into “experience points,” which can be exchanged for future airdrop rewards and income. The protocol also includes a gaming platform that integrates gaming and entertainment transactions on the blockchain. The funds will first be used to develop the Tabi game ecosystem and create an on-chain identity protocol.
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