Just over six months after FTX’s dramatic collapse, the cryptocurrency industry can finally begin to analyze the effects of the debacle. The rapid ripple effect on other cryptocurrency businesses drained liquidity from the industry and prolonged the crypto winter, with Silvergate Bank, BlockFi and Genesis Global Capital among those affected by the exchange’s collapse.
The FTX bankruptcy has also affected the crypto regulatory landscape, with authorities cracking down on companies – employing controversial methods in some cases – to prevent an ever-deeper mix of traditional finance with cryptocurrency.
Companies that have closed their operations in the United States citing regulatory pressures in recent months include Bittrex, Nexo and Unbanked, to name a few. Coinbase CEO Brian Armstrong claimed this week that China is the country that benefits the most from restrictive cryptocurrency policies in the United States, but only time will tell if this is true.
Companies are also reviewing their business operations due to increased regulatory scrutiny. In response to the banking delisting of crypto companies, Binance has even considered buying a bank in recent months, CEO Chanpeng Zhao has stated. Now, the crypto exchange is bracing for a wave of layoffs that will boost its compliance and regulatory capabilities.
As the industry digests recent events, FTX’s new management claims that FTX 2.0 could launch as early as next year, hopefully in time to join the club of crypto companies striving to stay around after November 2022.
This week’s Crypto Biz also takes a look at Bitcoin mining operations (BTC) of Tether in Latin America, the Tabi funding round, and Nvidia’s efforts to power the next generation of artificial intelligence (AI) chips.
Binance CEO Believes Bank Buyout Will Not Solve Cryptocurrency Bank Foreclosure Problem
Binance is unlikely to buy any banking institutions, but plans to make minority investments in financial institutions that will “hopefully influence them to be more pro-crypto,” Zhao commented on growing concerns that crypto companies will be locked out of the banking system. The collapse of several US banks in 2023 has raised concerns that the pool of crypto-friendly banks is shrinking. Former key banking partners Silvergate, Silicon Valley Bank and Signature Bank have capitulated this year. The exchange is also reportedly exploring a solution to reduce counterparty risk by allowing institutional clients to hold their collateral at a bank rather than on the platform.
Tether will start mining Bitcoin in Uruguay
Stablecoin issuer Tether has announced that it will launch Bitcoin mining operations in Uruguay in collaboration with a licensed local company. According to Tether, the company will use renewable energy sources for “sustainable” Bitcoin mining and plans to hire more team members. The mining announcement followed Tether’s plan to “regularly allocate up to 15%” of its profits to BTC purchases. Tether cited Uruguay’s ability to generate 94% of its electricity from renewable sources such as wind, solar, and hydroelectric, and its reliable electrical grid. Job postings on its website also suggest expansion into South Africa and Brazil.
Nvidia Introduces AI Supercomputer To Create Successors To ChatGPT
Nvidia continues to advance the race to develop AI tools and applications, and has revealed its plans to launch more products. Its CEO, Jensen Huang, has just 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 some of the early adopters of this supercomputer kit. Microsoft is also developing its own AI chip, with which it intends to meet the rising development costs of OpenAI and internal projects.
Tabi, NFT Market on BNB Chain, Secures $10M Angel Funding
The non-fungible token (NFT) marketplace, Tabi, formerly known as Treasureland, has completed a round of financing $10 million angel funded by venture capital firms Animoca Brands, Draper Dragon, Hashkey Capital, Infinity Crypto Ventures and Youbi Capital. In addition to NFT launchpad and trading features, Tabi converts users’ on-chain activities into “experience points”, which can be redeemed for future rewards and earnings. The protocol also contains a gaming platform that aggregates gaming and entertainment transactions on the blockchain. The funds will be used primarily to develop the Tabi gaming ecosystem and build an on-chain identity protocol.
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