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This Week on Crypto Twitter: Genesis in the Spotlight as FTX Shockwaves Subside

Also, the Ethereum team wanted everyone to know that fees on the network may soon be reduced by as much as 100x.

4 min read
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Judging by the glass-half-full price action this week, the worst of the damage from FTX’s historic collapse may be behind us—but this being crypto, nothing is certain. 

This week, heads turned towards crypto prime broker Genesis, which recently suspended withdrawals on its lending side due to the fact that its derivatives business had $175 million exposure to FTX.

Crypto trader @CryptoCred posted a timeline of Genesis’s statements about its FTX exposure over this last month. It goes to show the validity of the saying “watch what they do, not what they say.” 

The news also affects the business of popular crypto exchange Gemini. Last week, it warned of major delays for users looking to withdraw their cash from its Earn product, which was in part serviced by funds borrowed from Genesis. 

On Tuesday, Gemini tried to reassure its Earn customers: 

On a tangentially related note, two projects on Cardano both tweeted on Thursday that they were shuttering operations for similar (and similarly worded) reasons. The first was privacy and scalability solution Orbis:

The other was “all-in-one decentralized stablecoin ecosystem” Ardana, aka the “DeFi Hub of Cardano”:

Reserves

One positive step for the industry after FTX is an increased interest in things like security, decentralization, and consumer protections. Certain businesses actually did well both during and after the catastrophe, including self-custodying solutions like cold wallet manufacturers and decentralized exchanges (DEXs).

Another thing consumers want from their centralized exchanges (CEXs) going forward is proof of reserves, and they certainly don’t want to see too much of the exchange’s funds being backed by tokens the exchange created itself, as was the case with FTX and its native token FTT. In light of this, KuCoin’s reserves are at the limits of acceptability, according to The Block Research:

Jesse Powell, the former CEO of Kraken, another popular CEX, laid down the law for transparent and secure reserves:

“Proto-danksharding”

Ethereum’s second most significant upgrade—after its recent transition to a proof-of-stake consensus mechanism—was considered for inclusion on Thursday, according to this announcement by core developer Tim Beiko, which was shared on Twitter. 

Ethereum co-founder and inventor Vitalik Buterin called the proposal “amazing progress” and said ordinary users can expect massively lower fees going forward. 

Liam Horne, CEO of Ethereum scaling solution Op Labs, unpacked the proposal in a lengthy thread. He claims the improvement could lower fees on the network by as much as 100x.

Elsewhere…

On Tuesday, several people noted a worrying and gigantic discrepancy with the U.S. dollar-pegged stablecoin Tether. 

The following day, famous Chinese crypto investor Shen, who founded Fenbushi Capital in 2015—a company that describes itself as “the first-ever institutional crypto investor in Asia”—announced that hackers had looted him of $42 million in crypto a fortnight before. 

Central banks should HODL Bitcoin, according to a new paper from Harvard. 

Disgraced former FTX CEO Sam Bankman-Fried tweeted on Wednesday that he will be breaking his silence with journalist Andrew Ross Sorkin next week.

Popular crypto influencer BitBoy flew out to the Bahamas to try and stalk—sorry—get an audience with Bankman-Fried. His journey was trending this week. 

Finally, enjoy this potentially scandalous slip from Terry Duffy, CEO of the world’s biggest financial derivatives exchange, CME Group. 

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