Daily Digest - 11 November 2022

Headlines

▌DOJ and Regulators Contact Binance over FTX Negotiations

U.S. authorities, including the Justice Department, have contacted cryptocurrency exchange Binance for information about its recent interactions with FTX in talks between the two companies over a potential rescue, according to a person familiar with the matter. Binance has received letters from U.S. financial regulators, as well as European regulators, asking for information on the inner workings of FTX that Binance executives learned about this week, the person said. Binance’s due diligence team soon discovered a vague conflict in FTX’s relationship with trading firm Alameda Research. Alameda Research was also founded by FTX CEO Sam Bankman-Fried. FTX client funds appear to be used for commercial purposes, the person said.

Policy

▌European Regulators: Crypto Companies Need “Urgent Regulatory Attention”

The European financial stability watchdog on Thursday called for urgent action to regulate cryptocurrency groups. The market is currently in turmoil over the apparent collapse of major exchange FTX. The information from the European chapter of the Financial Stability Board (FSB) is the latest signal that market turmoil will mean sweeping new rules for the industry given its growing influence on traditional financial markets. The group said it would be modeled on a recent FSB regulatory plan that could force the breakup of conglomerates and centralized governance of stablecoins.

Blockchain application

▌Aptos and Google Cloud Cooperation Plan to Launch Accelerator Program

Aptos, a public chain project, announced a partnership with Google Cloud, which will provide support for some of its verification nodes and other services. The Aptos blockchain will also be indexed and joined Google Cloud's BigQuery service. Additionally, Google and the Aptos Foundation will launch an accelerator program and co-host a hackathon next year.

Cryptocurrency

▌FTX US Leaves Washington DC Cryptocurrency Advocacy Group

FTX US has left the Cryptocurrency Advocacy Group, a Washington, D.C.-based trade association that lobbies on behalf of the crypto industry. Before Thursday, FTX US was also a member organization of the group, and other major players in the cryptocurrency industry include cryptocurrency exchanges Coinbase and Gemeni and venture capital firm Andreesen Horowitz. Before news of FTX's bankruptcy earlier this week, the company's chief executive, Sam Bankman-Fried, was actively lobbying lawmakers in Washington.

▌S&P Global Cryptocurrency Report: Pegged Currencies Are More Stable Than Stablecoins

A report released by S&P Global concluded that stablecoins are more volatile than the fiat currencies to which they are pegged. S&P Global compared three U.S. dollar-pegged stablecoins, Tether, USDC and DAI, and the Hong Kong dollar (HKD), which is also a U.S. dollar-pegged fiat currency. The volatility of the Hong Kong dollar was significantly reduced. Cryptocurrencies, on the other hand, are much more volatile than stocks. The volatility of Bitcoin, Ethereum, Binance Coin, and Ripple has all remained above 60% over the past 30 months.

▌Tether Starts Freezing FTX’s USDT at the Request of Law Enforcement

Tether began to freeze FTX’s USDT at the request of law enforcement during the investigation. According to on-chain data, an unknown address with a balance of 46,360,701 USDT was frozen, and the address was later confirmed to belong to FTX.