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Supported By
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Good morning!
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The crypto ecosystem in its short history has had its own fair share of ups and downs. At the initial stages, it was a totally decentralised industry with no central authority. However, with the rise of centralised exchanges like Binance, Kucoim and a handful of others, there has been a growing debate between Decentralized Finance and Centralized Finance.
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CeFi refers to financial institutions or exchanges that operate within a centralised framework while decentralised finance refers to a system of financial applications and protocols that run on a decentralised blockchain network.Both have their strengths and weaknesses.
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CeFi could be said to be user-friendly and offer more liquidity while DeFi gives users control over digital assets and is more transparent. Now, one of the leading figures in the crypto industry, Binance CEO Changpeng Zhao has drawn a complementary role between both important concepts.
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Here is our weekly newsletter roundup. Now get a bucket of popcorn and follow through. First, a summary….
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Summary of the news
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- Sleeping bitcoin whale comes alive
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Spreading misinformation was a norm
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CZ talks on DeFi and CeFi
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Sleeping bitcoin whale comes alive
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An ancient Bitcoin address that was literally dormant for over a decade was brought back to life on Friday. The wallet transferred 279 Bitcoins worth $7.8 million to new wallets, according to onchain data.
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In October 2012 and May 2013, the wallet received some 1,128 Bitcoin ($31.6 million), according to on-chain analytics firm Lookonchain. As at then, Bitcoin was worth $12 and $195, respectively. No coins went in or out of that wallet until Friday when the owner transferred $279 BTC worth approximately $7.8 million to three different addresses.
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Some enthusiasts have suggested that when old coins are being spent more often, it indicates renewed optimism in the industry and a shift in confidence to hold crypto assets.
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Spreading misinformation was a norm
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According to the chief strategy officer at Binance, Patrick Hilmann, former FTX CEO Sam Bankman-Fried popularly known as SBF, used Twitter and other means to spread fake rumors about Binance CEO Changpeng Zhao.
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In a Twitter thread on Friday, Patrick Hillmann said SBF used his influence to label CZ as an “evil Chinese” through “fake rumors” to perpetuate his alleged scams at FTX.
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Recall that prior to and following FTX filing for bankruptcy in November 2022, SBF and CZ had a rocky relationship, although the two exchanges had financial ties.
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At the moment, CZ continues to lead Binance and remains arguably the most important figure in the crypto ecosystem while SBF is facing 13 federal charges, including those related to bribery and wire fraud, and has only limited internet access as part of his bail conditions.
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A word from Yellow Card
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SEC goes after Bittrex
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The United States Securities and Exchange Commission announced on Monday that it was charging crypto exchange Bittrex and former CEO William Shihara for allegedly operating an unregistered national securities exchange, broker, and clearing agency.
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In the complaints, the SEC claimed that Bittrex facilitated the buying and selling of cryptocurrencies which the agency believes to be securities—including OMG, DASH, ALGO, TKN, NGC, and IHT. Furthermore, it is said that Bittrex instructed the teams behind these cryptocurrencies to scrub “problematic statements” they'd publicly made in the past which they believed could bring the attention of a regulatory agency like the SEC.
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Bittrex Global responded to the lawsuit. It claimed that it never served any United customers and had taken pains to forbid United States residents from using the exchange. Also, Bittrex criticized the SEC for not seeking to engage with the company before suing.
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CZ talks on DeFi and CeFi
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It has been said that the market needs to find a way to strike balance between both and needs to find a way to leverage the strengths of both while mitigating their weaknesses.
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Changpeng Zhao, the CEO of Binance, gave his take regarding this matter when he spoke virtually at the Hong Kong Web3 Conference. CZ stated:
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“CeFi and DeFi have different characteristics; one is not safer than the other. For both CeFi and DeFi, there is a need to take security measures into consideration.”
He further suggested the need for transparency for a CeFi company which can be achieved by conducting a thorough proof of reserves. He added:
“Both CeFi and DeFi have different characteristics regarding risk and security. We shouldn’t take a one-sided view that one is better than the other.
CeFi is not against DeFi. Neither should DeFi be against anybody. In a purely decentralized space, everyone would be for themselves. When you form projects and initiatives, that is centralization. There will always be pockets of centralization, even within the decentralized space.”
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Other stories we are following
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