Morning Post - November 14

headlines

▌Two audit companies related to FTX may face scrutiny

According to the Financial Times, two FTX-related audit firms, Armanino and PragerMetis, may face scrutiny. Both audit firms have audited FTX's books. SBF announced on social media last year that its financial statements had been audited, but the relevant accounts were not made public, and the name of the auditing company was only made public before it went bankrupt. At present, neither of the two accounting firms has commented on the scope of their work in FTX or the last publication Time for audit opinion comments. The British Financial Times disclosed that the Public Company Accounting Oversight Board (PCAOB), the U.S. auditing industry regulator, issued a report in August this year saying that it found flaws in its audits of four listed companies by examining PragerMetis’ audit reports.

policy

▌St. Kitts and Nevis will adopt Bitcoin Cash as legal tender in 2023

Kitts and Nevis Prime Minister Terrance Drew announced at the St. Kitts and Nevis BCH Conference that BCH will become the country's legal tender in March 2023. The country will also look into mining BCH, he added, and welcomes dialogue and exploration of "future opportunities" with cryptocurrencies. The announcement sparked debate over the country’s choice to adopt bitcoin cash over bitcoin, with supporters of the decision pointing opponents to the WhyBitcoinCash website for information.

▌The Financial Crimes Investigation Bureau of the Bahamas: It has officially intervened in the investigation of the FTX incident

The local police in the Bahamas have officially stepped in to investigate FTX. On Sunday morning local time, the Royal Bahamas Police Force (RBPF) issued a statement saying: "In view of the global collapse of FTX and the temporary liquidation of FTX Digital Markets Ltd., a group of financial investigators from the Financial Crime Investigation Bureau of the Royal Bahamas Police Force are We are working closely with the Bahamas Securities Commission to investigate whether any criminal misconduct has occurred." It was previously reported that former FTX CEO Sam Bankman-Fried had been questioned by local police on Saturday night.

cryptocurrency

▌The encryption market has suffered the biggest selling pressure from miners since January 2021

The bankruptcy of FTX triggered a continuous downturn in the market, and the market encountered the largest one-day selling pressure of miners since January 2021. According to data analyzed by CryptoSlate, in November 2022, the average hash price reached $0.05. Bitcoin’s current price of $17,500 makes mining unprofitable not only for small miners, but also for large ones. Each Bitcoin mining machine is about $9,000, and the latest Bitmain S19 Pro ASIC mining machine has a payback period of 1,500 days and an average hash price of $0.06.

▌Trading platform AAX suspends all business and says "It takes 7-10 days to proofread and restore user assets"

The trading platform AAX suddenly announced the cessation of all operations, including transactions, withdrawals, etc., stating that "the current system upgrade requires our third-party partners to proofread and restore all user asset data. Due to the current market conditions, the time required for integration is shorter than It usually takes a long time, and I am currently queuing up to complete within 7-10 days." In this regard, Ben Caselin, director of research and strategy at AAX, said in the community that maintenance will take longer, and AAX is discussing enabling withdrawals during the ongoing maintenance period. According to Coingecko data, AAX is the top 20 derivatives exchange. AAX is a cryptocurrency exchange established in Hong Kong in 2019.

▌FIFA announced the authorization to launch four World Cup-themed Web3 games

According to the official website of FIFA (FIFA), FIFA has authorized the launch of a series of new Web3.0 games to entertain and attract a wider range of fans ahead of the 2022 World Cup in Qatar. It is reported that there are a total of four Web3 games launched this time, namely: metaverse game Uplandme, game prediction game Matchday, fan center Phygtl and 4v4 casual football game AlteredStateMachine. FIFA stated that all these games are designed for the future of Web3.0 and digital participation. Games and e-sports are one of the fastest growing opportunities for FIFA. FIFA is expanding into new digital spaces, platforms and games.

▌The FTX mine explosion incident affected South Korean users the most, followed by Singapore

Many retail investors in Singapore were affected by the FTX incident. According to data from earthweb.com, Singapore users accounted for more than 5% of the total number of FTX users, becoming the second most affected country by FTX, second only to South Korea and Germany Ranked third. It is reported that many retail investors in Singapore did not deposit assets into FTX’s Singapore entity Quoine Pte Ltd, although the entity has been exempted by the Monetary Authority of Singapore (MAS). Quoine has obtained a six-month exemption from July 28, which means that the entity can already provide digital payment token services to retail investors in Singapore. Once the license is obtained, the company will change its name to FTXSingapore, but the inspection found that, A large number of Singaporean users did not migrate from FTX.com to Quoine in time. In contrast, US users must open an account with FTXUS and cannot open an account with FTX.com.

▌Research: FTX may have minted 100 million SRM out of thin air to support its balance sheet

Lucas Nuzzi, director of research at CoinMetrics, tweeted that FTX may have minted Serum (SRM) out of thin air to support its balance sheet. The total supply of SRM this year has increased by 60% through two large coin mintings. Based on currently available information, none of this has been previously disclosed. The first minting was 50 million SRM on February 19th, and the second minting was 50 million SRM on May 25th. FTX previously reported valuing its SRM position at $2.2 billion, the largest position on its balance sheet. Serum has a market cap of less than $88M, so they are likely using a higher SRM price for their valuation, which may be illegal.