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Crypto Flipsider News – Market Review; FTX owes $3.1 billion; Celsius Poor Infrastructure; Cardano USDA Stablecoin; Grayscale No reserve

To read in the Digest:

  • (BTC) falls to two-year low at $15,800, (ETH) and DOGE drop
  • FTX owes $3.1 billion to its 50 largest creditors and asks other exchanges to help
  • Reviewer says Celsius had ‘insufficient’ accounting and operational controls
  • EMURGO will launch Cardano’s first regulated stablecoin, USDA, by 2023
  • Grayscale refuses to share proof of trust reserves, cites security concerns

Bitcoin (BTC) drops to two-year low at $15,800, Ethereum (ETH) and DOGE decline

As the full effect of the FTX implosion is slowly being felt, the crypto market has suffered another sharp drop. On Sunday, November 20, the price of Bitcoin (BTC) fell more than 5% to fall below $15,800.

Bitcoin’s drop below $15.8,000 is the first time the asset will fall below the zone in two years. However, Bitcoin has rallied slightly, now trading at $16,060 with a 3% decline in the past 24 hours.

The 24-hour price chart for Bitcoin (BTC). Source: CoinMarketCap

The drop in Ethereum (ETH) was even more pronounced, with an 8% loss sending ETH below the support levels of $1,180 and $1,170. ETH hit a low of $1,110 and is now trading at $1,120 with many expecting further declines.

The 24-hour price chart for Ethereum (ETH). Source: CoinMarketCap

(DOGE) suffered the biggest decline of 20 cryptos ranked by market capitalization. The losses follow DOGE’s resistance to the collapse of FTX. DOGE remains down 8% in the past 24 hours, trading at $0.07565 from yesterday’s high of $0.08568.

The 24-hour price chart for Dogecoin (DOGE). Source: CoinMarketCap

Downside :

  • Despite the ongoing stock market crash, Saiment reported Bitcoin address activity hit a six-month high over the weekend.

Why You Should Care

The decline of major crypto may be linked to the collapse of FTX, as it crashed after hacker FTX converted stolen crypto into BTC and ETH.

FTX owes $3.1 billion to its 50 largest creditors and asks other exchanges to help

In its paperwork filed Saturday in a Delaware bankruptcy court, beleaguered crypto exchange FTX announced it owed its 50 largest creditors nearly $3.1 billion, despite being valued at more than $32 billion earlier this year.

According to FTX, its top ten creditors each have more than $100 million in unsecured claims, totaling $1.45 billion. The largest creditor owes more than $276 million, and its fiftieth creditor is around $21 million.

In its filing, FTX notes that the debt does not involve anything owed to company insiders. FTX also called on other exchanges to step up and help track funds that were transferred “without permission” from the exchange last week.

The funds would exceed $650 million. FTX has asked the exchanges to “take all steps” necessary to secure the funds so they can be returned to the estate overseeing its bankruptcy.

Downside :

  • FTX explained that its debt may not be entirely accurate. There could be payments that have already been made to creditors that have not been reflected in their books.

Why You Should Care

The filing could only scratch the surface of how much FTX owes creditors. The company revealed last week that it may have more than a million creditors.

Reviewer says Celsius had ‘insufficient’ accounting and operational controls

The independent examiner in the bankruptcy of crypto lender Celsius Network, Shoba Pillay, has reported that the company has not implemented “sufficient” accounting and operational controls in its management of customer funds.

Celsius had operated two programs, Custody and Withhold, both of which required separate infrastructure. However, according to the report, Celsius failed to develop a separate infrastructure for the Custody program.

According to Pillay’s interim report, Celsius continued to mix deposits in Withhold accounts with the rest of its funds. This made it possible to fund shortfalls in the Custody portfolios from its other holdings.

Pillay explains that Custody wallets were underfunded on June 11.

She adds that due to the mix of funds “clients now face uncertainty as to what assets, if any, belonged to them at the time of the bankruptcy filing.”

Downside :

  • The New York Bankruptcy Court has order Celsius customers must file claims against Celsius by January 3, 2023, to be eligible for distributions from the case.

Why You Should Care

The report outlines how the court will move forward discussions on Celsius’s custody and retainer accounts at the next meeting.

EMURGO will launch Cardano’s first regulated stablecoin, USDA, by 2023

EMURGO, the official trading arm and a founding entity of (ADA) has announced the launch of USDA – the first fully secure and regulatory compliant stablecoin for the Cardano ecosystem.

USDA is developed by EMURGO as the first product in Anzens. The Anzens product suite designed by EMURGO aims to bridge the gap between “the protocols of traditional financial institutions (TradFi) and decentralized finance (DeFi)”.

According to EMURGO, the stablecoin will be backed by the US dollar and will be launched before the end of the first quarter of 2023. The USDA will combine the low-cost, fast and resource-efficient infrastructure of Cardano with the stability of the USD.

EMURGO also disclosed that it has partnered with a US-based regulated financial services firm to make cash deposits for USDA support in a regulatory-compliant manner.

Downside :

  • The Anzens suite will also include lending and borrowing services, crypto card payments, and bridges between traditional marketplaces and dApps.

Why You Should Care

The introduction of USDA could help strengthen Cardano’s DeFi ecosystem by making it more durable, robust and flexible.

Grayscale refuses to share proof of trust reserves, cites security concerns

Grayscale, the issuer of the world’s largest crypto fund, has decided not to follow the trend by releasing a proof of reserves or wallet address showing the underlying assets of its crypto products.

According to Grayscale, its decision not to release proof of reserve funds was due to security concerns. However, the fund noted in a Twitter thread that all crypto underlying its investment products is stored on the Coinbase custody service.

Grayscale further explained that Coinbase (NASDAQ:) is the only regulated and publicly traded crypto exchange in US regulation that outbids Grayscale crypto trusts and also prevents the sale, loan or transfer of the underlying assets.

The move comes amid increased pressure from the community for exchanges to release evidence of reserves following the collapse of FTX. However, Grayscale assured investors that their funds were safe.

Downside :

  • Grayscale’s decision was met with more FUD and criticism, with some saying that this decision contradicts Satoshi’s original plan for Bitcoin.

Why You Should Care

Grayscale explained to its investors and the crypto community that the regulations that apply to its entities make an FTX-like scenario nearly impossible.

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