A mind-blowing FTX report ??; Ethereum's upgrade is finally complete ??

???Hey,?Linas here!?Welcome to a????weekly free edition????of my daily newsletter. Each day I focus on 3 stories that are making a difference in the financial technology space. Coupled with things worth watching & most important money movements, it’s the only newsletter you need for all things when Finance meets Tech.

If you’re not a subscriber, here’s what you missed this week:

1. Stripe’s slowing growth suggests a harsher reality for all payment firms????[with lots of bonus reads + a deep dive into Adyen, the real payments beast]
2. Game-changer: Visa just made P2P payments interoperable??????[this is the biggest payments development this year!]
3. Plaid is a FinTech volcano that’s starting to erupt???
4. Mercedes-Benz is a FinTech company!???
5. Affirm + Stripe is a brilliant illustration of why ecosystems are crucial in FinTech???
6. India continues to disrupt financial services globally???????
7. Coinbase considers Bitcoin Lightning Network integration???
8. WhatsApp is using Brazil to test business payments???????
9. Banks are now fighting for your deposits???
10. Bitcoin is so back????

and more! Don't miss out and join the community here????

Last week (10-14 April) was another really thrilling and sizzling week in the world of #Blockchain & #Cryptocurrency.?We will look at the mind-blowing FTX report (it’s really wild!); Ethereum’s Shanghai upgrade (aka Shapella) which is finally complete (why it matters & what’s ahead), and other interesting news and developments.

Without further ado, let us dive into what happened in the Blockchain & #Crypto sector last week. Let’s connect the dots.

A mind-blowing FTX report ??

New report ?? FTX's?new management has released a crazy new 45+ pages report that delves into the failures leading up to the exchange's bankruptcy.?

Let’s take a quick look because it’s nuts. Literally.

More on this ???Here are the 10 most shocking takeaways highlighting how badly FTX was run:

1. Hubris, incompetence, and greed?were some of the root causes that led to FTX collapsing as quickly as it had grown.
2. Sam Bankman-Fried (SBF), Gary Wang, and Nishad Singh controlled almost every aspect of FTX — despite the fact they were fresh out of college and had little experience in risk management and running a business.

1. One executive stated that?if Nishad got hit by a bus, the whole company would be done. In other words, the concentration of power was crazy.
2. Anyone who tried to challenge SBF was rebuffed. In one case, the President of FTX US was told to apologize to SBF, and his bonus was cut after he raised basic governance questions.
3. 56 FTX entities did not produce financial statements of any kind. 35 entities used QuickBooks as their accounting system and relied on a mix of Google Docs, Slack, shared drives, and Excel spreadsheets to manage assets and liabilities.
4. In internal messages, SBF described Alameda Research as "unauditable," writing:?We sometimes find $50 million of assets lying around that we lost track of; such is life.?
5. Expenses and invoices were regularly submitted on Slack — and were approved using emojis.?Yup???
6. FTX configured the codebase to grant Alameda a limitless ability to trade and withdraw from the exchange regardless of the size of its account balance, and to exempt Alameda from the auto-liquidation process that applied to other customers.
7. Neither Singh nor Wang had the training or experience to handle FTX's cybersecurity needs — and the company didn't have a chief information security officer or anyone with the skills to fulfill the responsibilities of such a role.
8. Virtually all crypto assets were kept in hot wallets connected to the internet, meaning they were?far more susceptible to hacking, theft, misappropriation, and inadvertent loss.

That’s not it. On to the crazy part!

?? THE TAKEAWAY

What’s next? ???Despite all of this, bankrupt FTX has recovered $7.3 billion in assets and is considering relaunching the digital asset exchange in Q2 this year ?? According to recent reports, the exchange that was at the epicenter of one of the biggest financial scandals ever committed, officially recovered $1 billion in both cash and digital assets. More importantly, a bankruptcy court hearing that took place today noted the increase in recovered funds. A recovery effort that saw an increase of more than $800 million since January. The crazy part? FTX is considering restarting the exchange in the second quarter of 2023. Less than 6 months ago, John Ray, the new CEO hired to oversee the bankruptcy process, called FTX a bigger fraud than Enron.?Would you trust FTX if it relaunches?

ICYMI: The mindblowing collapse of FTX-linked stocks????[+6 bonus reads]

Ethereum's upgrade is finally complete ??

The news ???Ethereum’s?Shanghai?upgrade (aka?Shapella)?is complete.?This means validators now have the freedom to withdraw their staked ETH if they so wish.?

Some have had their crypto locked away since December 2020.

More on this ???The latest figures from Nansen suggest that?93,300 ETH?has been withdrawn over the past?24?hours — that's barely?0.5%?of what has been sent to the deposit contract.?So far, this is highly unlikely to have a detrimental impact on Ether's price.

ETH surged by?6.3%?in intraday trading as the markets digested the news, with?$2,000?proving somewhat elusive. Yet, at the point of writing Ether is trading at over $2,000.

?? THE TAKEAWAY

What’s next? ???Shapella is one among other top priorities for Ethereum that are focused on making the blockchain more scalable and reducing transaction fees. As noted earlier, this is a pretty huge development and ETH has too much upside potential to ignore. Despite the strong momentum as of late, the second-biggest cryptocurrency is still down more than 50% from its ATH in November last year. However, the fact that we’re starting to see a sustained period of ETH being deflationary AND given the new upgrades are about to be implemented, it is very becoming very interesting. If these and other post-Merge promises will continue to be delivered, we might indeed start seeing the emergence of the ultimate Internet Money. More thoughts here:

The Merge: Ethereum's Netscape moment? ??

Ethereum post-Merge: what investors need to know???

Extra Reads & Quick Bites for Curious Minds??

• SME focus ?? Mastercard?has launched a tool that helps financial institutions set up international payments for their customers - including consumers and SMEs - in more than 60 currencies to over 100 markets.?Mastercard Cross-Border Services Express?promises a simple integration that helps deliver cross-border payments to places covering 90% of the world's population. 萬事達卡 is working with Fable FinTech and Payall Payment Systems on the service, offering users flexibility in how they pay by delivering funds to bank accounts, mobile wallets, cards, and cash payout locations.?It seems that Mastercard is more focused on SMEs now while Visa is on retail…?ICYMI: Game-changer: Visa just made P2P payments interoperable?????
• Another DeFi hack ???DeFi protocol?Yearn Finance?lost $11.6M?Thursday following an exploit of an older version of its contracts. Security firm PeckShield said the exploiters were able to mint over 1.2 quadrillion yUSDT, a yield-paying version of the USDT stablecoin, in early Asian hours using a $10,000 initial deposit, and then tricked the protocol to cash out millions in stablecoins. Decentralized lender Aave was previously thought to be affected, though the malicious transactions were only routed through an out-of-date version of the platform.

Money Moves??

• Seychelles-based crypto derivatives exchange?Bitget?has launched a $100M fund to support future Web3 projects.
• Indian mobile payments company?PhonePe?has raised a further $100M in an ambitious attempt to complete an ongoing $1B financing round. The new funds from returning backer General Atlantic bring the total raised by the company over the past few months to $750M.
• France's?absolute labs,?a Web3 wallet management platform, has raised an?$8M?seed round.?

Continue reading by subscribing to?Linas's Newsletter.?You will receive fresh news about FinTech, Blockchain & Crypto with hot takeaways every day.

P.S.?You might enjoy my earlier pieces as well:

?? Top 10 FinTech predictions for 2023 ??

?? Top banking trends to watch in 2023 ??

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About: I am?a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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