FTX could be revived; Binance received funds from Bitzlato

The biggest news in the cryptoverse for Jan. 19 saw FTX CEO John Ray II suggest that the failed exchange could be revived. Meanwhile, the U.S. agency FinCEN accused Binance of acting as a counterparty to Bitzlato, which itself faced enforcement action yesterday.

Elsewhere, the attacker who exploited Raydium has moved $2.7 million of funds through Tornado Cash, the Ethereum Name Service is considering selling a portion of its ETH, and Yuga Labs is blacklisting certain NFT marketplaces that do not support royalties. Plus, research on the bottom of the Bitcoin market.

CryptoSlate Top Stories

FTX CEO John Ray creates taskforce to explore restarting exchange

FTX CEO John Ray III is investigating the possibility of relaunching the now-defunct cryptocurrency exchange, The Wall Street Journal reported Jan. 19.

The CEO told the Journal that he had created a task force to investigate relaunching FTX.com, the company’s primary international exchange. He said: “Everything is on the table. If there is a path forward on that, then we will not only explore that, we’ll do it.”

While FTX officials have been accused of criminal activity, several clients have praised the company’s technology, suggesting that it might warrant a reboot, according to Ray.

Binance named among Bitzlato top 3 receiving counterparty

Binance was named as one of Bitzlato’s top three receiving counterparties, according to an order by the US Treasury Financial Crimes Enforcement Network (FinCEN).

The US authorities brought enforcement actions against the little-known exchange on Jan. 18, accusing it of facilitating the laundering of $700 million. The exchange’s Russian founder Anatoly Legkodymov was arrested in Miami.

Around two-thirds of Bitzlato’s top receiving and sending counterparties were associated with darknet markets or scams,the FinCEN order reported. The authorities pointed out that apart from Binance, the other top receiving counterparties of Bitzlato included Russia’s darknet Hydra and Ponzi scheme “TheFiniko.”

Raydium exploiter moves $2.7M to Tornado Cash

A wallet address linked to the Raydium DEX exploiter has moved about $1.75 million worth of ETH via the sanctioned mixing protocol Tornado Cash.

On Dec. 16, the exploiter overtook Raydium’s owners’ authority and drained the protocol’s liquidity pools of assets worth $2.2 million, including $1.6 million in SOL tokens.

Following the exploit, the Raydium team proposed to compensate the affected users using funds from its DAO treasury.

ENS DAO considers proposal to auction 10,000 ETH for USDC

The Ethereum Name Service (ENS) DAO is considering a proposal to sell 10,000 ETH for USDC via a Gnosis Auction.

The governance proposal submitted on Jan. 18 seeks to diversify the ENS DAO Treasury. Currently, the DAO holds about 40,746 ETH and $2.46 million USDC.

However, due to the prolonged bear market, the DAO may be in a vulnerable position by being overexposed to a single volatile asset. For context, ETH has lost roughly 52% of its value year-over-year.

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As a result, the DAO is deliberating on converting about 25% of its ETH holdings into USDC.

Number of ETH holders grew 3.6x to 87M in 2022

The number of Ethereum (ETH) holders grew 263% between January and December 2022, according to a research report by Crypto.com.

The number of ETH investors spiked to 87 million by the end of December from 27 million in January.

Comparatively, Bitcoin (BTC) owners grew by only 20%, from 183 million in January to 219 million in December, as per the report.

Despite the drastic fall in crypto prices through 2022, crypto adoption continued to increase. The total number of crypto investors jumped from 306 million in January to 425 million in December, marking a growth of 39%.

Yuga Labs blacklists NFT marketplaces that do not support royalties

Bored Ape Yacht Club (BAYC) creator Yuga Labs blacklisted addresses related to LookRare, SudoSwap, Blur and NFTX for not supporting royalties for its Sewer Pass NFT.

Royalties are payments made to NFT creators each time their assets are sold on a marketplace. OpenSea mandates creator royalties of up to 10% — while others like LooksRare and SudoSwap have made the royalties model optional.

In light of the ongoing NFT royalties debate, Yuga Labs has moved to ban transactions from marketplaces that do not support royalties for NFTs like its Sewer Pass.

Research Highlight

Research: On-chain metrics continue signaling a Bitcoin bottom

Previous on-chain research suggested the Bitcoin market bottom was in. CryptoSlate revisited several Glassnode metrics, which continue to indicate a bottoming of price.

However, macro factors, which may not have been present in previous cycles, remain in play, potentially impacting the current cycle.

Bitcoin Supply P/L Bands show the circulating supply that is either in profit or loss, based on the price of the token being higher or lower than the current price at the time of last moving.

Market cycle bottoms coincide with the Supply in Profit (SP) and Supply in Loss (SL) lines converging, which happened most recently around Q4 2022. The subsequent act of the lines diverging has corresponded with price reversals in the past.

Currently, the SP band has moved up sharply to diverge from the SL band, suggesting a macro upturn in price could be on the cards if the pattern holds.