Crypto Three Things (11/15)

Tuesday, Nov 15th 2022

Commentary

“Monetary policy is not a panacea.” - Ben Bernanke


1) Binance to Launch Recovery Fund: Leading crypto exchange Binance is emerging from the chaos as a stabilizer for the industry with a new initiative. The firm's chief executive, Changpeng Zhao, took to Twitter to announce the formation of a recovery fund that will seek to help out cash-strapped crypto projects amid the liquidity crunch that sweeps over the industry in the aftermath of FTX's collapse. "Crypto is not going away. We are still here. Let's rebuild," Zhao said.

Titan's Takeaway: Out of the ashes of FTX's collapse, the crypto industry is looking for leadership, and Changpeng Zhao of Binance seems to be filling that void. However, too much power in a single individual's hands is concerning, and we have to wonder whether it's simply an attempt to bolster one's reputation.

2) Alameda Acquired Crypto Ahead of FTX Listings: Alameda Research, the trading firm under Sam Bankman-Fried's command, had been collecting dozens of tokens before its sister company FTX would list them on its trading platform, an analysis from data firm Argus showed. Over the course of a year, Alameda accumulated Ethereum-native coins worth a total of more than $60M, gearing up for a release on the FTX marketplace.

Titan's Takeaway: Token listings in 2021 were a highly-sought after investment activity as coins landed on exchanges already at multiples for those bought in private sales. The insider trading practice contradicts Bankman-Fried's comments that Alameda didn't have special access to information.

3) FTX in Touch with Regulators: The new management of now-fallen crypto exchange FTX has started working with legal and forensic advisers in the first steps to prepare the company and its swath of subsidiaries for bankruptcy processes. The executive tapped to lead FTX through Chapter 11, John J. Ray III, is a veteran insolvency lawyer who worked on energy firm Enron's bankruptcy and recovered billions of dollars from its creditors.

Titan's Takeaway: The road to recovering client funds will likely be long and complicated. Few details have emerged, but the first filings show more than 1 million creditors may have been affected by FTX's descent into bankruptcy.


Titan's Approach to Crypto

In the wake of FTX's collapse, we wanted to provide some thoughts about how we approach crypto and share some of the most common client questions we have received.

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As of this writing, ETH was a portfolio holding of Titan. This security may cease to be a portfolio holding at some point in the future.

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