Daily Digest - 14 December 2022

Headlines

▌CZ Responds to the Net Outflow of US$1.14 Billion in a Single Day: It Is Normal for Large Amounts of Cash Withdrawals From Crypto Exchanges

Binance CEO CZ explained on social media that there was a net outflow of 1.14 billion US dollars on the trading platform today. CZ said that this situation has appeared before, sometimes Binance has net withdrawals, and sometimes Binance has net deposits. For Binance, business is normal. In fact, it’s a good idea to “stress test withdrawals” on each CEX in rotation, CZ said. Running these "tests" costs some network fees, but keeping the industry healthy, redemption business is simple.

Policy

▌Canada Bans Margin/Leverage Trading of Cryptocurrencies

The Canadian Securities Administration (CSA) issued an update on cryptocurrency trading platforms operating in the country. According to the statement, all crypto trading companies operating in Canada—both local and foreign—must comply with the newly expanded terms that prohibit them from offering margin or leveraged trading services to any Canadian clients.

Cryptocurrency

▌U.S. Attorney’s Spokesperson: SBF Faces up to 115 Years in Prison

The U.S. government on Tuesday charged the founder and former CEO of the cryptocurrency exchange FTX, SBF, with a series of financial crimes, saying that he deliberately deceived customers and investors, reaped huge profits for himself and others, and at the same time was in the bankruptcy of the company. The charges outlined in the 13-page indictment could land SBF decades in prison, with up to 115 years in prison, according to U.S.

▌SBF's Bail Request Denied

A magistrate in the Bahamas rejected the bail application of FTX founder SBF. Bahamian officials said SBF would initially be held in the medical unit of a Bahamian prison. According to previous news, SBF's lawyers requested that he be released on a bond of $250,000.

▌The Current CEO of FTX: SBF’s Parents Are Being Investigated, and It Will Take Weeks or Months to Ensure the Safety of All the Company’s Assets

The current CEO of FTX, John Ray, stated at the hearing of the House of Representatives on Tuesday that FTX founder SBF obtained multiple loans from the company with little or no documentation. It is currently being investigated what role SBF's parents played in FTX, and his parents received payments. Ray expects it will take weeks or months to secure all of the company's assets.

▌Grayscale Bitcoin Trust (GBTC) Negative Premium Exceeds 50% for the First Time

According to TradeBlock data, the negative premium of Grayscale Bitcoin Trust (GBTC) exceeded 50% for the first time, reaching 50.06% at one point. As of press time, the negative premium has dropped slightly to around 48.66%. In previous news, the US Securities and Exchange Commission (SEC) reiterated that its rejection of GBTC's application to convert GBTC into a spot Bitcoin exchange-traded fund (ETF) was consistent and fair. In addition, Grayscale is currently being sued by the hedge fund FirTree, which seeks to obtain detailed information about GBTC to investigate Grayscale’s potential mismanagement and conflicts of interest, hoping that Grayscale will resume redemption and cut its 2% trust fee.

▌Tether: Will Reduce Secured Loans in Reserves to Zero in 2023

Tether announced that from now on, by 2023, it will reduce the secured loans in Tether reserves to zero.

Key Economic Developments

▌Biden: Inflation Is Coming Down, Everything Is Moving in the Right Direction

U.S. President Joe Biden said that inflation is falling and everything is moving in the right direction. Prices are still too high and there is still a lot of work to be done. Wages have risen more than prices have risen. The hope is that prices will be closer to normal by the end of 2023, but should not rise.