Another one down

Gm, everyone. While we were tucking into leftover turkey sandwiches, crypto firms around the globe worked to stem the impact of this latest crash…with about as much success as your one uncle who insisted on a turducken this year.

Here’s what we’re tracking today: BlockFi went bankrupt, Binance doubles down on industry protection, and MetaMask takes a page from web2's book. Let’s dig in.

—Vincent & Angelina

BlockFi Goes Bankrupt

The dominos just keep falling. Without FTX’s line of credit to save it, crypto lender BlockFi was forced to file for bankruptcy this week—and its filing revealed a pretty dire financial situation.

BlockFi has:

• $257 million cash on hand, which will support its operations throughout the bankruptcy but won’t pay creditors.

• More than 100,000 creditors, according to estimates by executives.

• Somewhere between $1 billion and $10 billion in both assets and liabilities.

The lender’s largest creditors include Ankura Trust Company (with a $730 million unsecured claim), FTX US (with a $275 million unsecured claim), and the US Securities and Exchange Commission (with a $30 million unsecured claim). Typically, creditors like these get paid back at some point during the bankruptcy proceedings.

What took BlockFi down? Earlier this year, BlockFi CEO Zac Prince admitted that the lender had to liquidate a large client. Prince didn’t specify that it was Three Arrows Capital, but the announcement came just after the 3AC collapse.

That’s when BlockFi took out a $250 million line of credit from FTX, which later turned into a $400 million line of credit…which later turned into potentially nothing now that FTX is also bankrupt. How many days left in 2022?

What to look for next: Statements from mining companies like Bitfarms, Cipher Mining, and Core Scientific, according to Director of Content at Compass Mining Will Foxley. BlockFi was the second largest lender to Bitcoin miners and often gave them loans with 15% interest rates.

—Vincent

A Billion More Can’t Hurt

Sometimes, being a TradFi bank sounds nice—when things go south, you just ring up your friends at the central bank and ask for a bail out. The crypto industry can’t make that kind of call, leaving crypto firms scrambling for any form of financial relief when crashes like the one we can’t look away from right now materialize.

Enter: Binance.

Binance CEO Changpeng “CZ” Zhao announced on Thursday that Binance allocated $1 billion in crypto to its Industry Recovery Initiative (IRI), a rescue fund designed to help struggling crypto businesses stay afloat in the wake of the FTX contagion.

If the IRI succeeds in propping up the crypto industry, Binance’s already-outsized market share is set to grow even more, snatching up the spoils of what remains after FTX’s downfall.

Here’s what we know about the IRI so far:

• Binance already received 150 applications from crypto firms seeking financial support under the IRI. The rescue program is expected to last six months and applications are still open.

• Other big names in crypto including Aptos Labs, Polygon Ventures, and Jump Crypto have already committed to investing a total of $50 million.

• Binance is “flexible on the investment structure,” accepting contributions from investors in cash, crypto, and debt.

Flashback: CZ’s emergence as crypto’s white knight may remind apprehensive investors of when SBF assumed a similar role this past summer. But there’s a key difference this time round.

• Binance’s fund is linked to a public wallet address for anyone to see. Back when FTX sent lifelines to ailing crypto firms following the collapse of Three Arrows Capital, the nature of the investments was far more opaque.

• FTX also engaged in ambiguous investment relationships that created conflicts of interest for its own business—something Binance is attempting to avoid by refusing dubious deals.

Bottom line: Binance is going above and beyond to light a cozy campfire that will keep crypto warm this winter. We just hope CZ doesn’t run out of flint.

—Angelina

Sponsored by Caleb & Brown

What should we expect for crypto in 2023?

Join us virtually on December 7 for a fireside chat with Kevin Ting, founder and host of Coinsider, and Jake Boyle, Chief Commercial Officer of Caleb & Brown.

Kevin and Jake will share their top predictions for 2023 as well as reflect on and analyze what happened in 2022.

They’ll also share super actionable insights, like their bear market strategies, security best practices, and more!

Looking forward to seeing you on December 7.

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No Fox Given

It’s easy for web3 warriors to look down on web2, especially when it comes to the topic of privacy (we’re looking at you, Facebook). But joke’s on us—turns out data harvesting is just as much a thing in crypto as it is elsewhere.

MetaMask, the popular browser wallet with more than 21 million monthly active users, will start collecting users’ IP and Ethereum wallet addresses with every transaction, according to the parent company’s recently revised privacy policy.

Pushback: Crypto Twitter didn’t take it too well. Coming just a week after Uniswap revealed that it tracks user data meticulously, degens fear that DeFi’s core ethos of anonymity is fading.

—Angelina

In other news:

• The MakerDAO community rejected a CoinShares proposal to invest $500 million in bonds.

• The President of TIME magazine has left to join crypto payments startup MoonPay.

• The Monetary Authority of Singapore said that its banks’ exposure to crypto was insignificant.

• Coinbase made four new appointments in Europe.

• A sports and entertainment NFT startup backed by Gary Vaynerchuk cut more than a third of its staff.

And that’s what you need on your crypto radar today. What kinds of crypto projects are you still interested in despite the crash? Reply to this email and let us know. See you on Friday!