The Weekly Pen: Death, doom, & the call for DeFi

# money
# defi
# blockchain
# bitcoin

The weekend of week 48 is here, and so is The Pen team with another wrap-up from the week in all things Web3, DeFi, Crypto, money, banking, finance & investing. A week offering some unexpected news, a turn of events, and a few “headscratchers”. Bit breaded blurbs of the top headliners from the global economy, lured with questionable implications which we’ll leave up to you to analyze. A series of headlines noncontiguous of the FTX collapse (for once). Without further ado, enjoy the read.


Well alright, maybe the 1st headline is a little FTXed so let’s just get it out of the way. Cryptocurrency lender BlockFi has filed for Chapter11 bankruptcy protection, which legally means that they’re reconstructing the company, i.e. not having to deal with employees' severance packages, creditors, etc. but theoretically, it means they’re done and did with and most like won’t get a second chance in life. Try the metaverse perhaps. The reason for their demise is simple; too much exposure to FTX, and liquidity crisis leading them to exploit legal loopholes.


Okay, we’ll take a slow transition away from the toxic effects of “you know who”. Man Group PLC  is an active investment management company, listed on the London Stock Exchange. In a recent turn of events, the company is setting up to launch a crypto hedge fund to offer their institutional clients better risk measures. Interesting. Unaffected by the collapse of “that one exchange”, Man Group PLC seems to see opportunities on the other side of the crypto winter.


LINE, the social media giant from Japan, went head-to-head with telegram during the spur of the crypto industry by offering their users a platform to discuss and share trades in all things crypto, but also having their own cryptocurrency exchange based in the U.S. called Bitfront. In a recent statement, LINE said that they are closing the exchange to focus more on developing LINE’s blockchain eco-system and a token called LINK. Moreover, the platform's shutdown had nothing to do with certain exchanges misconduct...K


From a man whose bread, and butter is to stay in the darkest alleys of the world, seeing no light in sight, must make one wonder whether his work is merely a mental condition. Nouriel Roubini, often referred to as Dr.Doom of Wall Street, who has never been a fan of cryptocurrency exchanges to begin with (nor was he a fan of the financial markets in general and especially not derivatives), is calling the entire industry “corrupt gambling” and denounces ‘proof of reserve, something which Penning isn’t a fan about either because it only proves a marginal level up on transparency and trust. Back in 2018, he had called bitcoin the mother of all scams and also called blockchain technology the most hyped tech ever. He said that a decade after calling the 08’ crisis, which was largely due to the housing lending crisis, which he called what?


The European Central Bank (ECB) has declared the mother of cryptocurrencies, Bitcoin as dead, and according to bitcoin death data provider (right?) bitcoin obituaries, Bitcoin has now died a collective amount of 467 times. This statement comes from a central bank that never “killed” anybody with their rate hikes, spikes, and lowering to fight almost self-inflicted inflation.


Crypto broker Genesis and its parent company Digital Currency Group (DCG), owe customers of the Winklevoss twins' crypto exchange Gemini $900 million, leading the exchange to try and recover the funds from Genesis. While one might argue, whether it's the brothers' or Genesis's fault, we can't help but wonder if it's a dead-end pursuit of capital. The implications of this one mishap from the twins can make one speculate if they're next in line?


It's not only in the world of crypto that withdrawals are being halted from investors. The world's largest private equity firm is limiting funds withdrawals at a $125bn property fund, as investors are taking a run for their money and looking for the exit. Investors are looking for liquidity in an asset class (property/real estate), which is highly illiquid and now headed for a downturn.


As investors are making a run for their buck, from one of the oldest asset classes (real estate/property), BlackRock's CEO Larry Fink said, this past Wednesday, that despite the market's "misbehaviour", referring to "what's the name again?" exchange from which he himself lost $24million, the technology which drives the crypto industry (editor; blockchain), is still relevant and for that he's still in. Could it be a take on tokenizing their real estate funds and thus create more liquidity from the world of DeFi? Leave the implication of to you to analyze.


Meanwhile, in the world of TradFi, Swiss banking giant Credit Suisse has lost 65pct of its stock value this year alone. This comes after the financial conglomerate warns of substantial losses (Uhm, thanks for the warning), which was followed by the bank getting scrutinized for engaging in worrisome scandals and not being able to face a potential liquidity crisis. ECB, Mr. Roubini, any comments?


Coinbase, the exchange that is slowly transitioning from a consumer-oriented position to focusing on institutional clients, after forging forces with Blackrock to offer their clients direct access to crypto, and eventually marking themselves “too big to fail”, no longer believes in a series of tokens and their usability. Coinbase has consequently ended its support for; Bitcoin Cash, Ethereum Classic, Ripple’s XRP, and Stellar XLM. Due to their nature of low usage, the aforementioned tokens are being delisted. Hedging risk much?


While Mr. Roubini was unsuccessfully, but nevertheless relentlessly, trying to de-escalate the so-called hype of blockchain technology, the shipping giant Maersk initiated a now 8-year-long blockchain project called Tradelens. In cooperation with IBM, it was their take on making the industry more efficient, transparent, and CSR-compliant, however, the project has now come to an end due to a lack of support from the industry. An industry, filled with necessary inefficiencies, corruption, and the need for cutting corners all of which blockchain technology would have put an end to, just like if blockchain technology was induced throughout the entire financial world. Oddly enough, the blockchain-powered platform was set to launch in Russia.


Apple wants a bite for itself. In a recent event, Apple blocked Coinbase Wallet's latest release of its iOS app, after imposing transaction fees and claims that it needs to go through their In-App purchase. Don’t try and decentralize the Apple. This comes days after Coinbase ended its support of low-user tokens. Another bites the Apple.


While LINE failed to win the game of DeFi, Telegram was way ahead of the curve and is now in the midst, of building a decentralized marketplace, complete with decentralized tools, noncustodial wallets, and a decentralized exchange (DEX). The project is, according to the founder Pavel Durov, a response to the collapse of “that one exchange”, claiming that there was too much power in the hands of the few. True, and it is also now evident that blockchain-based projects should go back to their core mission of being decentralized, which is why a centralized world such as shipping might have failed, including the “condemning conspiracy theories” of the Pen Team.