👀 SHOW ME THE PROOF: Crypto Exchanges scramble

Vanakkam, this is the doodhwala. The crypto newsletter that’s like that close friend who picks you up when you are down, gives you a shoulder to cry on, and will listen to sad songs with you.

Hey Alexa, play "Call Out My Name" by The Weeknd on repeat. 💔

And today is one of those days when you might need such a friend.

Not just for the whole FTX saga but also for India crashing out of the T20 World Cup. 😭

Maybe some ice cream and a weekend web3 meetups might cheer you up

Here’s what we have in the crypto thaali for today:

• SHOW ME THE Proof of Reserves!

• FTX is the Lehman Brothers of crypto.

• Chaack and Charts: NFTs panic sellin

• Milky Meme Of The Day

SHOW ME THE Proof of Reserves!

This phrase from the movie, Jerry Maguire is something you don’t hear often in crypto. 🤷‍♂️

Because huge exchanges don't reveal their main wallets that have all their funds, so you can’t see it. 🤦‍♂️

And that is a huge problem!

Users expect their funds to be absolutely safe and that they can take them out whenever they want.

The reality, however, might be different. 😭

Here’s just a few exchanges that blew up because they were gambling away user funds:

• FTX (ofc)

• Celsius

• Vauld

• BlockFi

• Voyager

So one simple and easy way to solve this is to…just show the funds. 💰

This is also called proof-of-reserve.

Or in doodhwala’s terms…show me the proof that you got my doodh dough. 😎

After the FTX debacle, exchanges are lining up to show that they won’t blow up like FTX.

The first one to come out and prove its reserves is Binance. (CZ leading the way)

They've got $61 billion, mainly in - BUSD, BTC, ETH, and BNB.

They showed all the wallets holding the reserves and you can now track any activity on these addresses through a blockchain explorer.

Here are a few other exchanges that will be showing their reserves soon:

• Crypto.com

• OKX

• KuCoin

• Kraken

• Gate.io

So if you have crypto on these exchanges make sure you keep an eye on these reserves to check if your funds are actually safe. 🔒

Doodhwala’s Take:

Proof of Reserves should have been public and transparent since Day 1.

Doing this now, after so much of user funds have been blown away, is kinda like studying 2 hours before taking an exam.

Brotha you should have started this LONG AGO! I guess, it’s better late than never. 🤷‍♂️

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FTX is the Lehman Brothers of crypto.

Lehman Brothers.

That’s what FTX is right now! Not according to the doodhwala, we only know a Lakshman Brothers, that’s the dukaan down the road.

But according to Arthur Hayes, a Bitcoin billionaire, and former CEO of Bitmex.

He just dropped a 2,249-word essay (I CHECKED!) where he compared FTX to Lehman Brothers.

Now, I don’t know much about Lehman Brothers, I was back in school when that rap album or whatever dropped. So, here’s what google says:

• was the 4th largest investment bank in the US

• Market cap of (at the top) $60 billion

• AUM of $680 billion

This was at it's high. In less than 14 months, Lehman’s stock crashed 99.6% to less than $0.01, I can’t even buy a Centre Fresh with that.

Is FTX the modern-day Lehman Brothers and what could it mean for the crypto markets?

Here's Hayes' hot takes:

1️⃣ FTX cooked the books with FTT tokens

Just like Lehman was selling and re-selling falthu mortgages, Sam went full-on Walter White with the FTT books.

Hayes believes Alameda blew up along with 3ArrowsCapital, Celsius, and errybody else in June.

But FTX lent Alameda survival money in exchange for FTT tokens.

Sam (and FTX) tried to artificially push FTT’s price up so that Alameda could dump and make their money back.

Oooohhh shady af.

2️⃣ No love after divorce

CZ and Sam were friends since 2019. Binance even invested in FTX.

But they had a messy divorce, and CZ doesn't “Make Love After Divorce,” sounds like the next James Bond movie.

The Binance boy knew Alameda was in trouble because it held a ~$6 billion in FTT and could smell something fishy about customer deposits.

So, he decided to pull out.

But the rest was unexpected.

3️⃣ More pain to come.

Lehman Brothers collapsed six months before the market bottomed.

The crypto markets’ Lehman Brothers (FTX) collapsed on November 8, 2022.

Every company, blockchain, DApp, or token that is associated with FTX will now crack.

And the markets will take a long time to recover. But this down candle will get rid of the dead weights and those who survive will have opportunities.

Doodhwala’s take: When Hayes talks, we listen and write newsletters. FTX’s collapse will be messy and any survival plan will not work. The market will eat up the pain, and come back stronger next year. 🤞

Chaach and Charts: Panic sellin’ NFTs

It seems like it's just one crisis after another in crypto rn.

And these crises seem to be extremely contagious!

It has spread to the NFT holders as well.

Today marked the highest percentage of WETH volume on OpenSea vs ETH volume ever. 🤯

This super high volume indicates just one thing: Sellers are accepting whatever bid they are getting.

Including some of the older bids they might have ignored.

They just want to liquidate and get out. 💔Oh, what have you done to us Sam! 😭

Milky Meme Of The Day

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That’s all for today bhaiyo aur bheno! Naale Sigona!

Aakash "Dahi Cheeni" Athawasya & Arvind "Doodh Peda" Krishna

Yo! Our legal and financial advisors (aka our good ol’ conscience) have asked us to add this boring disclaimer.

None of what you read here is financial advice. We aren’t here to get you to buy or sell a crypto. We’re only here to tell you what’s up in crypto today and make you laugh. So, if you screwed up on a trade, that’s on you G. Stay safe in the markets.