1. Instagram Partnered with Polygon for NFTs

Instagram (Meta) will soon be rolling out new NFT features in their apps, users will be able to mint, view and purchase NFTs directly within Instagram. Polygon, a layer 1 blockchain, will power these NFT features.

Earlier this year, Facebook and Instagram tested NFTs for select creates in the United States but have since rolled out this little experiment to over 100 countries. Currently, users can only connect their crypto wallets to the apps but will soon be able to mint and purchase NFTs with the help of Polygon.

2. US Government is claiming $1 Billion in Stolen Silk Road Bitcoins

Back in 2012, James Zhong stole around 50,000 bitcoins from the dark-web marketplace “the Silk Road”, the whereabouts of the wallets/private keys that held these coins had been unknown for nearly 10 years until the Police executed a search warrant for James’ property last year, where they found the computer controlling the bitcoins worth around USD 3 Billion at the time. The coins are now worth $1 Billion but it is a nice addition to the US government’s collection. Other high-profile seizures of bitcoin include one for 70,000 coins in 2020 and one of nearly 120,000 in February of this year. This makes the US government one of the largest holders of Bitcoin. The current largest bitcoin wallet is one of Binance’s cold storage wallets, holding over 250,000 bitcoins

3. Binance and FTX went head to head

This week, the CEOs of two of the largest centralized crypto exchanges went head to head. It all started when a Coindesk article leaked the balance sheet information of Alameda Research, last week.

For some background, Alameda is a very successful quantitative trading firm founded by Sam Bankman Fried (SBF). Alameda makes markets and provided liquidity on exchanges all over the crypto ecosystem, doing anywhere from $1-2 Billion a day in volume. Back in 2019, Alameda and some of its employees began a crypto exchange, FTX. FTX has seen a huge amount of success in the past years and is now the third-largest exchange by volume. That being said, many are wary of the Alameda <> FTX relationship as Alameda trades on FTX.

The leaked information showed Alameda held large amounts of locked FTT (the token native to the FTX exchange). Specifically, Alameda had $14.6B in assets, including holdings of $3.6B in “unlocked FTT,” and $2.6B in “FTT collateral,” against $8B in liabilities. This ratio of assets to liabilities, where the assets are so concentrated in one asset (and with much of it locked), could be seen as quite alarming. While the CEO of Alameda claimed the leaked documents did not paint the full picture, this did not stop Binance’s CEO from announcing that Binance would be selling its entire remaining allocation of FTT tokens (worth $500 Million).

This announcement led the price of FTT to plummet dramatically, As of writing, the price of FTT sits at $16, a -30% decrease since CZ announced he would be selling his FTT. The declining price of FTT has led to much speculation, including many assuming FTX and Alameda have borrowed money with FTT as collateral. As we know from recent months, when the value of your collateral declines, you may need to default and liquidate the collateral to pay back the loans. People have been rightfully panicking and withdrawing their funds from FTX. All of this has been unfolding live on Twitter.

4. JP Morgan Executed their First On-Chain Trade

The Monetary Authority of Singapore (MAS) is leading a pilot programme made up of large investment banks to test the capabilities of blockchain technology in the context of finance and banking. This week they conducted their first on-chain trade of tokenized FX currencies.

A live cross-currency transaction involving tokenised JPY and SGD deposits was successfully conducted. In addition, a simulated exercise was performed involving the buying and selling of tokenised government bonds. 

The trade was done using liquidity pools, a DeFi concept well known to anybody in crypto who has used applications like Uniswap. Two pools of assets are used, and the balance of assets in the two pools determines the price of the assets using a basic formula.

5. Hong Kong has vowed to become a crypto hub

Forever rivals, Hong Kong and Singapore held overlapping Fintech weeks just last week. Hong Kong’s status as a finance hub has come into question in recent years due to stringent Covid-19 anti-pandemic measures, restricting travel into the city. That being said, the Hong Kong fintech week kicked off with clear messaging towards crypto and crypto-related businesses.

Hong Kong officials have announced a new crypto licensing regime that will open the doors for retail investor activity in crypto. The fintech week began with the announcement that the government would hold open consultations for allowing increased retail activity on licensed platforms and is open to considering virtual asset futures exchange-traded funds (ETF). This is a direct contrast to Singapore, which has taken a more strict approach toward retail involvement in the last year or two.