2 years ago
BlockFi became the latest level to succumb to crypto contagion, filing for Chapter 11 bankruptcy connected Nov. 28.
Weeks before, aft FTX had besides filed for bankruptcy, BlockFi issued a connection saying it could not “operate concern arsenic usual.” At the aforesaid time, the steadfast implemented a intermission connected withdrawals to “protect our clients and their interests.”
With the spate of caller insolvencies, the crypto assemblage is connected precocious alert implicit which level is adjacent to telephone it a day. Recently, societal media chatter has focused connected Binance, KuCoin, and Nexo.
AFTER FTX , CELSIUS AND VOYAGER NOW BLOCKFI HAS JUST FILED FOR BANKRUPTCY
WHO DO YOU THINK IS NEXT TO GO BANKRUPT?
— GURGAVIN (@gurgavin) November 28, 2022
Crypto exchanges successful the firing line
On Binance, Bitcoin Magazine expert Dylan LeClair said helium was “getting weird vibes from CZ” based connected his caller actions.
In addition, LeClair further speculated that the crypto bail-out fund, led by Binance, is simply a nationalist amusement of strength, which, erstwhile applied to a punctuation from Sun Tzu’s The Art of War, suggests weakness.
“Appear anemic erstwhile you are strong, and beardown erstwhile you are weak.”
However, the Analyst tempered these comments by saying helium has nary “quantitative impervious of immoderate wrongdoing,” nor is helium asserting immoderate claims by making these comments. Yet helium remains skeptical.
Is anyone other getting weird vibes from CZ close now? It’s similar he’s moving the SBF summertime playbook:
Public projection of spot and talks of “industry bail outs” portion attempting to rise funds.
I’m not claiming anything, but the similarities are… odd.
— Dylan LeClair 
(@DylanLeClair_) November 28, 2022
Commenting connected the crypto bail-out money successful a caller interrogation with George Gammon of Rebel Capitalist, Swan Bitcoin CEO Cory Klippsten, who sounded the alarm connected Celsius earlier its demise, said:
“He whitethorn beryllium wholly insolvent and it whitethorn each clang down, it’s precise possible. But determination is different crushed to bash it, which is conscionable that if makes you 5 cardinal to walk two, past you bash that. It could beryllium a elemental economical calculation.”
When pressed connected his thoughts astir Binance’s position, Klippsten mentioned that it appears that the steadfast has not gone dense with high-risk directional bets. Like Coinbase, it seems Binance has been contented with earning via “the house’s rake,” helium said.
“It seems similar they person not taken large directional bets and they’ve operated with much transparency, successful the crypto world, assigning anyone a standing supra zero arsenic acold arsenic transparency is precise difficult.”
KuCoin dismisses speech of insolvency
Similarly, the laminitis of Crypto Capital Venture Dan Gambardello pointed retired that KuCoin is offering “some ridiculous APRs,” with locked Bitcoin paying retired astir 300% interest.
Can idiosyncratic archer maine wherefore Kucoin has immoderate ridiculous APRs close now? Over 200%!
With each the liquidity problems successful crypto lately, is this truly the champion clip for this?$BTC 299.49%$ETH 231.89%$USDT 200.25% pic.twitter.com/ldJylt9KTx
— Dan Gambardello (@cryptorecruitr) November 29, 2022
In general, high-interest output products are a reddish emblem arsenic determination are doubts implicit sustainability, and specified strategies person been utilized successful the past to pull a last question of liquidity lone for devs to rug.
KuCoin responded by saying the precocious APRs subordinate to their “Dual Investment” products, and not their main gain product. Dual Investment refers to a “non-principal protected fiscal merchandise with a floating return.” As such, the magnitude earned depends connected the staked plus show astatine maturity.
Hello! Have you already checked this article? It's each astir KuCoin Dual Investment merchandise which tackles around:
1. Why is Dual Investment a Non-Principal-Protected Financial Product
2. Why is the APR Span of Dual Investment Products truthful Varioushttps://t.co/hJDP71uf3B
— KuCoin Updates (@KuCoinUpdates) November 29, 2022
In a caller interrogation with CryptoSlate, KuCoin CEO Johnny Lyu dismissed rumors of insolvency, saying the steadfast is “fully liquid” and moving connected impervious of reserves.
“I tin corroborate that we’re afloat liquid and we are besides publishing our plus presumption close now. As I mentioned, we are besides collaborating with third-party auditors close now.”
Nexo said it has zero contagion exposure
On Nov. 16, an API mistake stopped the regular auditor attestation of Nexo’s assets exceeding its liabilities. The contented was resolved successful a substance of hours.
However, the incidental was met with a flood of messages connected societal media, informing that Nexo was insolvent.
With the crypto assemblage inactive connected precocious alert, Nexo issued a tweet thread connected Nov. 28 to code lingering rumors. The thread went in-depth connected its sustainable concern model, nonsubjective liquidation policy, and prudent absorption of its Nexo Token.
Further, Nexo stated it has zero contagion vulnerability to bankruptcy oregon “struggling” entities.
Our hazard absorption ensured that we had $0 vulnerability to:
– FTX/Alameda;
– Genesis, Gemini, Luno, BlockFi;
– UST/Luna, Three Arrows Capital;
– Celsius, Babel, Hodlnaut;
– Struggling crypto miners. 27/33https://t.co/MJtwTsouhe
— Nexo (@Nexo) November 28, 2022
The station Who’s next?: Crypto assemblage points the digit astatine Binance, KuCoin, Nexo appeared archetypal connected CryptoSlate.
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