Hello and welcome to The Node. This is Daniel Kuhn and Xinyi Luo, here to take you through the latest in crypto news and why it matters. In today’s newsletter:
Bankrupt BlockFi Sues Bankman-Fried for His Robinhood Shares: On the same day BlockFi declared bankruptcy, the crypto lender also filed suit against Sam Bankman-Fried to reclaim stock shares in Robinhood that the FTX founder pledged as a backstop. SBF was accused of trying to sell these shares (held in a holding company called Emergent Fidelity Technologies) during the run on FTX this month.
Meanwhile, Silvergate Capital, the principal bank for the U.S. crypto industry, responded to rumors it had great exposure to BlockFi.
MakerDAO Voting on Hiking DAI Stablecoin Rewards: MakerDAO is voting to increase the annual reward for its DAI dollar-pegged stablecoin to those who pledge crypto collateral as yields dry up across crypto. The voting period closes Dec. 1, and could see rates raised up to 1% from 0.01% today.
“Banks are offering 4%+ in risk-free yield. We should do the same,” Maker’s Sam MacPherson said. The increased fees would be paid out from lending revenues, not a marketing budget.
Separately, DeFi protocol Aave is sunseting trading on 17 assets (including curve, 1inch, yearn finance and several stablecoins) in its largest liquidity pool. The decision was made by a community vote to mitigate risk of acquiring “bad debt” ahead of a protocol upgrade.
Kraken Settles Iran Sanctions Case With US Treasury: U.S.-based crypto exchange Kraken agreed to pay more than $360,000 to the Treasury Department over claims it violated sanctions by serving customers in Iran. Kraken also agreed to invest $100,000 in implementing additional sanctions compliance controls.
The Treasury said a series of allegedly illicit transactions totaling $1.68 million took place between Oct. 14, 2015, and June 29, 2019, and were “non-egregious and voluntarily self-disclosed.”
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BlockFi is the latest crypto lender to file bankruptcy this year, following liquidity issues at Celsius, Genesis and many others, D.K. writes. What are crypto lenders, why do they keep blowing up and what is the future of this once-promising sector of growth in crypto? Read the full article here.
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Overheard on CoinDesk TV…
Sound Bites
“The [Securities and Exchange Commission] will get paid before the retail people they are mandated to help and protect.”
– Hodder Law founder Sasha Hodder, discussing BlockFi’s bankruptcy filing, on CoinDesk TV’s “First Mover”
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What others are writing
Off-Chain Signals
Binance’s bailout fund is a welcome backstop for crypto — but questions remain (The Block)
‘No Cooperation’: How Sam Bankman-Fried Tried to Cling to FTX (NYT – paywalled)
Cryptoverse: Messi takes on Ronaldo in fan coin world cup (Reuters – paywalled)
