Blockchain analysis firm Chainalysis has compared the fall of Mt. Gox to FTX to determine how FTX’s bankruptcy will impact the ecosystem.
It concluded that FTX was a relatively smaller part of the crypto industry than Mt. Gox was at the time and that the industry should bounce back stronger than ever.
In a Nov. 23 Twitter thread, Chainalysis’ research lead Eric Jardine began his comparison by first looking at the market share of the two firms, finding that Mt. Gox averaged 46% of all exchange inflows in the year leading up to its collapse in 2014, compared to FTX’s average of 13%, which operated from 2019 to 2022.
Jardine notes in 2014 when Mt. Gox collapsed, that centralized exchanges (CEXes) were the only players in the game, while in late 2022 nearly half of all exchange inflows were captured by decentralized exchanges (DEXes) such as Uniswap and Curve.
Jardine mentions, however, that FTX was slowly gaining in market share while Mt. Gox was seeing theirs steadily decline, and that business trajectories are worth considering, adding:
“Mt. Gox was becoming one exchange among many during a period of growth for the category, taking a smaller share of a bigger pie. FTX on the other hand was taking a bigger share of a shrinking pie, beating out other exchanges even as its raw tx volume declined.”
Despite this, Jardine concluded that Mt. Gox was a “linchpin of the CEX category at a time when CEXes dominated,” making it a bigger part of the crypto ecosystem at the time of its collapse than FTX was.
Jardine then goes on to examine the recovery of the crypto industry after the fall of Mt. Gox and found that while on-chain transaction volume was stagnant for a year or so, activity soon picked back up.
In Feb. 2014, Mt. Gox suspended trading, closed its website, and filed for bankruptcy protection after losing 850,000 Bitcoin in a hack.
Customers who had holdings deposited on the exchange have still not received their funds back, but the Mt. Gox Trustee announced on Oct. 6 that creditors have until Jan. 10, 2023, to select a repayment method for the 150,000 BTC reportedly in their possession.
Jardine believes that although there are other factors such as Sam Bankman-Fried’s large public presence, the “comparison should give the industry optimism,” as when it’s boiled down to market fundamentals, “There’s no reason to think the industry can’t bounce back from this, stronger than ever.”
Former FTX CEO Sam Bankman-Fried has once again attracted the ire of the crypto community — this time over his slated appearance at an upcoming New York City conference on November 30.
Vocal members of Crypto Twitter have questioned why the former CEO of the now-bankrupt exchange continues to walk free given the events over the last month.
In a Nov. 23 Twitter post, Bankman-Fried announced he will be speaking with The New York Times journalist Andrew Sorkin at the DealBook Summit “next Wednesday.”
The news was confirmed publicly by Sorkin, who said: “There are a lot of important questions to be asked and answered. Nothing is off limits.”
In the wake of the FTX collapse, some in the community had wondered whether Bankman-Fried would honor his conference engagements, including his one at the DealBook Summit.
A spokesperson for The New York Times confirmed to Cointelegraph that Bankman-Fried was invited to its DealBook Summit several months ago — well before the FTX crash — and that he’d likely be participating in the interview virtually from the Bahamas, stating:
"We invited Mr. Bankman-Fried to be interviewed at the Summit several months ago. At this time, we expect Mr. Bankman-Fried will be participating in the interview from the Bahamas."
According to a Gawker report dated Nov. 11, Bankman-Fried was previously listed on the speaker page as "C.E.O, FTX." However, the speaker page now shows his title has since been updated to "Founder, FTX," — reflecting his resignation from the role since FTX's bankruptcy filing.
Australians have been warned to stay away from suspicious-looking fake Bitcoin paper wallets, which work by luring victims into accessing a lucrative crypto wallet but will ultimately drain them of their own crypto holdings.
According to a Nov. 22 post on the Facebook page of the NSW Police Force, the scam starts as a paper cryptocurrency wallet with a QR code, which is made to appear like a legitimate Bitcoin paper wallet.
These are strewn by scammers in public locations such as streets or parks.
An individual that locates the paper wallet and scans the QR code is directed to click on a link to access a crypto wallet with up to $16,000 Australian dollars ($10,000).
The person is then asked to pay a withdrawal fee and provide their own wallet credentials that will purportedly allow them to transfer the balance into their own crypto wallet.
"Once the withdrawal fee is paid and person's crypto wallet details provided, the person's cryptocurrency is stolen from their crypto wallets,” explained the NSW police.
The authorities have advised the public to stay vigilant, and that anybody who finds a paper crypto wallet similar to this should not attempt to scan the QR code, access the account, or supply their private information.
Instead, they should surrender the wallet to their local police station.
This is not Australia's first instance of a paper crypto wallet scam. Over three months ago, a user on Reddit created a thread reporting they had found a paper crypto wallet and flagged it as a possible scam.
Dozens of other people from all over the country responded with their own stories of finding paper crypto wallets in the street, on the beach, and at parks.
One user, Pinnymc, commented they almost fell for it because they could see the wallet address and the transactions on-chain. They said the website also appeared genuine.
However, Pinnymc says they became suspicious because of the 0.5% transaction fee.
"If this was a legit wallet I should be able to withdraw and the transaction fee comes out of the balance. It's such a shame because this looks so legit," said the user.
Australians have already proven to be particularly susceptible to investment and crypto-related scams this year, losing 242.5 million Australian dollars to scammers so far in 2022, according to data from the Australian consumer watchdog's Scamwatch website.
The country's federal law enforcement agency has also highlighted the criminal use of crypto as an "emerging threat" but says it's a challenge to keep pace with criminals who are constantly changing tactics and methods.
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