Evening News ｜ CFTC says FTX provided Alameda with a trading speed advantage; Zhao Changpeng states that the withdrawal amount yesterday was lower than during the FTX collapse
FTX code was modified to exempt Alameda's positions from automatic liquidation; Bahamian judge denies SBF's bail request.Organizer: flowie, ChainCatcher
"What Important Events Happened in the Last 24 Hours"
1. CFTC: FTX's System Provided Significant Speed Advantage for Alameda Trading
According to a complaint filed by the Commodity Futures Trading Commission (CFTC), Alameda Research, under SBF, had a speed advantage when executing orders on FTX.
The CFTC stated that these advantages were not publicly disclosed and resulted in a "significant speed advantage." "Alameda's trading instructions were a few milliseconds faster than those of other API users. In high-frequency trading, this is a crucial time advantage."
Additionally, FTX allowed Alameda to bypass automated steps such as verifying available funds before executing trades. If other customers placed orders simultaneously, these checks were conducted sequentially to confirm the feasibility of each trade, but this rule did not apply to Alameda. (Source link)
2. FTX Chief Engineer Secretly Modified FTX Code to Exempt Alameda Positions from Automatic Liquidation
Reuters reported that in mid-2020, FTX's chief engineer secretly modified the FTX code, which allowed Alameda Research to avoid liquidation of leveraged positions. According to Reuters' review of the historical codebase, engineer Nishad Singh left a comment in the code stating "prevent liquidation of Alameda," indicating that Alameda, as a market maker for FTX, had been bearing leveraged losses since 2020. (Source link)
3. Zhao Changpeng: Yesterday's Withdrawal Volume Was Lower than During the LUNA or FTX Collapse, Binance Situation Stable
Binance CEO Zhao Changpeng tweeted that "the situation seems to have stabilized, and yesterday's withdrawal volume was not the highest we've handled, not even in the top five. We processed more withdrawals during the LUNA or FTX collapse. Deposits are coming back now."
Subsequently, Bloomberg reported that Binance CEO Zhao Changpeng stated in a memo to employees that the digital asset industry is experiencing "a historic moment," and that Binance's financial situation is good, "we will weather the crypto winter." "While we expect the next few months to be rocky, we will get through this challenging period and emerge stronger for it." He added that the recent collapse of FTX has brought "many additional scrutiny and sharp questions" to Binance. (Source link)
4. Non-U.S. Customers of FTX Have Applied to Form an Official Bankruptcy Committee, Currently Facing Losses of Up to $1.6 Billion
Non-U.S. customers of FTX have applied to form an official bankruptcy committee and hired a law firm to protect their ownership of assets. It is reported that this group is currently facing losses of up to $1.6 billion, and the committee is led by Eversheds Sutherland attorneys Sarah Paul and Erin Broderick.
Erin Broderick stated that there is an "irreconcilable conflict" between the interests of FTX's non-U.S. customers and other creditors, and the top priority for non-U.S. customers is to determine that the $10 billion transferred to Alameda was customer funds, not property. (Source link)
5. Apple to Allow European Users to Purchase NFTs and Cryptocurrencies in Third-Party App Stores to Comply with New EU Antitrust Law
To comply with the new EU antitrust law, tech giant Apple will allow its European users to purchase NFTs and cryptocurrencies in third-party app stores. Previously, Apple had strict regulations on NFT applications, requiring users to make purchases within Apple's own App Store and pay a 30% commission to Apple, with no option to use cryptocurrency for payment.
Apple's latest move to open its ecosystem can be seen as a response to the EU's Digital Markets Act, which aims to regulate so-called "gatekeepers" and ensure platforms act fairly, allowing "third parties to interoperate with the gatekeepers' own services." (Source link)
6. Bahamian Judge Denies SBF's Bail Request
According to Reuters, after the arrest of FTX founder and former CEO SBF yesterday, his lawyer requested bail set at $250,000, but a local Bahamian judge denied the request, stating that SBF should remain in custody in the Bahamas until February 8, 2023. Judge Joyann Ferguson-Pratt ordered an extradition hearing to be held at 10:00 AM Eastern Time on February 8, 2023. (Source link)
7. Lightning Network Solution Provider Breez Completes $4.5 Million Financing, Led by Ego Death Capital and Entrée Capital
According to Bitcoin Magazine, Lightning Network solution provider Breez announced the completion of a new round of financing totaling $4.5 million, led by Ego Death Capital and Entrée Capital, with participation from Hivemind Ventures, Fulgur Ventures, Hawk Digital Innovation, and Bitcoiner Ventures.
Breez's Lightning Network client provides services such as Lightning Network point-of-sale software and a local podcast player, and develops Lightning Network-based applications and use cases through its non-custodial Lightning SDK. Breez has previously received investment from Seetee, a subsidiary of the Norwegian investment group Aker focused on Bitcoin. (Source link)
8. Polkadot Ecosystem Web3 Music Platform Public Pressure Completes $6 Million Financing, Led by Scytale
According to Music Business Worldwide, Web3 music platform Public Pressure announced the completion of a new round of financing totaling $6 million, led by digital asset management company Scytale, with participation from Metterblock, HV Capital, and Ethereum & Polkadot co-founder Gavin Wood, Energy Web founder Ed Hesse, among others.
Public Pressure was founded in 2015 and transitioned to a Web3 platform based on the Polkadot blockchain earlier this year, aiming to drive the music industry towards the Web3 space. It has also established partnerships with major fashion brands, including Diesel, and is headquartered in London, with offices in Europe, Hong Kong, and the United States. (Source link)
"What Interesting Articles Are Worth Reading in the Last 24 Hours"
Did the new CEO force FTX into bankruptcy for high fees? Could FTX have secured billions in funding? Did Zhao Changpeng "jack up the price" during the final stages of FTX's share buyback? What is the truth behind FTX's bankruptcy…
Before the FTX bankruptcy hearing held last night Beijing time, Forbes published the draft of testimony that Sam Bankman-Fried (SBF) planned to present at the hearing. In this testimony, SBF detailed the events surrounding the FTX bankruptcy.
2. “2022 On-Chain Data Report: BTC, ETH, and Stablecoins”
2022 was one of the most chaotic, turbulent, and brutal years, as central banks underwent a 180-degree turn in monetary policy. After experiencing decades of extremely loose credit conditions, the tightening environment has led to severe and rapid shrinkage across most asset classes.
This issue's on-chain analysis article will cover volatility, derivatives, and futures leverage; the severity of losses realized last year; the supply structure and concentration of Bitcoin on-chain; the cooling of the Bitcoin mining industry; supply dynamics post-Ethereum merge; the evolving trend of Ethereum gas consumption dominance; and the changing trends and dominance in the stablecoin market.
3. “Scroll Co-Founder Zhang Ye: What Are the Design Architecture and Challenges of Scroll?”
Recently, Zhang Ye, co-founder of Scroll, was invited to participate in a blockchain seminar at Stanford, where he shared the architectural design and challenges of Scroll. In the first half of the presentation, he introduced the overall architecture of Scroll and highlighted some of its unique design choices.
In the second half, he described how to build zkEVM from scratch and used specific examples to demonstrate the process. Finally, he briefly discussed the various research challenges Scroll faces in the fields of cryptography and protocol design.
