ICPSquad Weekly: FTX Aftermath and Crypto Winter

Geoffrey Miller
Geoffrey Miller

Let's address the wooly mammoth in the room: the fall of Sam Bankman-Fried's FTX exchange. What does it mean for ICP?

There's no sense in avoiding one of the biggest news stories in crypto history. It's dominating online conversations as our current crypto winter intensifies, and it will dominate this newsletter and many articles to come. So, let's address the wooly mammoth in the room: the fall of Sam Bankman-Fried's FTX exchange.

In the wake of a classic bank run, cryptocurrency prices have crashed across the board. Thankfully, ICP has not suffered as badly as some coins, but we're still hovering at about $3.85 USD. Nobody has escaped Sam Bankman-Fried's dramatic and tragic unravelling unscathed.

FTX Files for Bankruptcy

FTX has officially filed for bankruptcy. The voluntary proceedings will include Alameda Research and about 130 additional affiliated companies. No deal with Binance or any other exchange will save FTX. On Friday, it was announced that Sam Bankman-Fried will step down as CEO and be replaced by John J. Ray III, the lawyer who once oversaw the liquidation of Enron.

Many prominent online influencers have weighed regarding perceptions of scandal surrounding the former FTX CEO. Even Elon Musk has gotten involved, saying Sam Bankman-Fried set off his "bs detector" over a proposed deal to integrate Twitter with blockchain technology.

Dramas in the Bahamas

CoinDesk has ongoing, explosive coverage of irregularities in the business operations of FTX, Alameda Research, and associated entities. Allegedly, the FTX empire was run by a group of 10 housemates in on again, off again relationships that involved a host of potentially serious conflicts of interest.

In my opinion, the FTX story highlights the need for greater professionalism, transparency, and accountability in the world of cryptocurrency. In a recent op-ed that's well worth the read, Coinbase's CEO, Brian Armstrong, has called for renewed attention to implementing reasonable regulations and checks and balances to prevent future FTX sized disasters.

Just in - FTX may have been Hacked

Writing this newsletter has begun to feel a bit like a Monty Python skit as things deteriorate from bad to worse. Right as I was finishing up the previous section, news broke that in the wake of filing for bankruptcy, FTX has possibly been hacked to the tune of $473 million USD in crypto assets. I will follow this story with interest. Details are still pending, but it's definitely worth mentioning. I don't know how quickly we can get this newsletter published, but I'm betting by the time it reaches you, the FTX hack will be a big story in its own right.

Implications for ICP

So, what does all this mean for ICP? It's complicated.

In the short term, FTX's fall will hurt cryptocurrency prices across the board. However, ICP isn't really crypto in the same sense as a lot of other assets. It's more of a token that represents infrastructure governance shares. Unlike, say, Bitcoin, it's got immediate utility connected to a functional network. Unlike Solana, it has the saving grace of being associated with a non-profit foundation that isn't Alameda Research. With fewer coins to compete against, perhaps ICP can cut through the noise. At this point, all the Internet Computer community has to do is survive - and we're good at doing that. Especially if the price of Solana falls below our price, attention will shift and better days will come.

Perhaps sooner than you think.

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