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The large Ethereum dumps from the FTX drainer address (1), which were responsible for the theft of billions of dollars worth of assets from the FTX exchange (2), could exacerbate the current crypto winter by increasing selling pressure.
The current crypto crisis may get worse if Ethereum (ETH) (3) is continuously liquidated due to growing selling pressure. The second-largest digital asset by market capitalization appears to be caught up in the recent FTX-Alameda controversy (4) due to FTX's failure and its security system attack, which compromised over $600 million in cryptocurrency funds. This has caused a shortage of assets in circulation.
The FTX hacker has also illegally transferred millions of dollars worth of Ethereum from FTX to a drainer account, where he is gradually selling off all of the holdings to cause a huge drop in the price of Ethereum. The FTX Hacker (5), the 35th largest Ethereum whale holder who has liquidated almost 80k Ethereum, has now accepted responsibility for precipitating a significant price drop in Ethereum by gradually selling off his ETH holdings.
Additionally, it has been claimed that the hacker owns nearly $300 million worth of Ethereum and that deciding to liquidate all of the funds could cause a significant decline in the value of all cryptocurrencies. A Twitter threat from on-chain data provider LookonChain revealed that FTX hackers had begun converting ETH.
According to the company, the FTX account drainer sent 50k Ethereum ($60 million) to an address that starts with "0x866e" (6), from which the hacker can proceed to withdraw the money. The hacker also exchanged 30,990 Ethereum for 2197.5 renBTC, and 1070 BTC was sent to the Bitcoin network.
Regardless of market depth and the premium, which has reached 4%, hackers cross-chain from renBTC to the BTC chain (7). The issuance of ren has increased quickly due to many arbitrage funds moving from the BTC to renBTC cross-chain.
There have been several rumors and viewpoints that if the hacker decides to cash out all of the Ethereum, it may force others to leave the market to avoid any upcoming FUD situations and result in the worst crypto winter by the end of 2022. Currently, the hacker's address holds over 100k Ethereum, and more liquidation of Ethereum may start a bloodbath for the digital asset with a prolonged bearish trend.
The hacker previously carried out massive transactions, exchanging 7,420 BNB on the BSC chain for 1,500 Ethereum, converting $48 million worth of DAI into 37,000 ETH, and withdrawing 25,000 ETH for roughly $31.6 million from the Aave Protocol V2.
Following the recent incident, the price of ETH has dropped sharply from $1,200 to $1,171. If this trend continues, the price of ETH could continue to face a massive dump, intensify selling pressure, and fall below its critical support level of $1,150, forcing it to trade around $900.
The FTX saga has lessons for the crypto ecosystem,
~Vitalik Buterin, co-founder of Ethereum
In addition to acknowledging the significant effects of the collapse of the SBF crypto empire, Vitalik underlined the resilience of the blockchain, the purportedly underlying technology of cryptocurrency (8).
The fallout from FTX's bankruptcy filing has recently affected organizations as diverse as BlockFi, Genesis, and Gemini. Still, despite the disruption, the blockchain base layers and decentralized finance protocols have operated flawlessly.
Later, she added that while what happened with FTX was undoubtedly tragic, the Ethereum community also sees the situation as confirmation of what they have believed to be true all along: centralized anything is, by default, suspect, and the Ethereum network is decentralized.
Buterin stated that crashes like these are, on the one hand, necessary for the ecosystem, and on the other, he added he wishes that they happened when Terra and Luna were smaller, as they were like ten times smaller. The collapse of SBF has caused an industry-wide reckoning over transparency and risk, as has the earlier collapse of DO Kwon's TerraUSD algorithmic stablecoin and its associated Luna token.
FTX owes the top 50 creditors around $3.1 billion
According to FTX's filing for US bankruptcy court protection, Reuters confirmed on November 20 the company owes its 50 largest creditors close to $3.1 billion. In a court filing, the bankrupt cryptocurrency exchange had earlier on November 19 stated that it owed its top ten creditors a total of around $1.45 billion, although it did not name them.
One of the most high-profile cryptocurrency meltdowns occurred when FTX and its affiliates filed for bankruptcy on November 11 in Delaware, the US, leaving an estimated 1 million users and other investors facing a potential loss of billions of dollars. FTX announced on Saturday that it has started a strategic evaluation of its global assets and is getting ready to sell or reorganize some companies.
Platforms like Binance and Crypto.com are finding it difficult to reassure the market about their stability in the wake of the FTX case gone bad. In the meantime, FTX Europe tried in vain to get a trading permit in Switzerland. Based in Pfäffikon, close to Zurich, it recently applied for a so-called organization trading system license to Swiss banking regulator Finma, but it was denied.
Since FTX Europe is currently shutting down, it cannot reach Finma for comment, and the reasons why the application was unsuccessful are yet unknown.
The company owned by billionaire Warren Buffet on Friday issued a statement informing investors that Berkshire Hathaway is not associated with a fictitious website purporting to be a cryptocurrency brokerage (9).
A website that describes its operator as a Texas-based broker founded in 2020 to allow investors to achieve a completely passive income from investment in cryptocurrency mining is how Buffet, which has long been skeptical of cryptocurrencies, came to learn about it in 2018, according to the company. Bitcoin Rat Poison Squared is a cryptocurrency that Buffest has long been skeptical of.
According to a statement provided to Reuters on Friday by Buffett's company, the website's name is berkshirehathawaytx.com, and this website's owner is not associated with Berkshire Hathaway Inc. or Warren E. Buffet, the company's chairman and CEO.