Digital Assets Download

The past week’s digital assets news was dominated by the sudden collapse of FTX and the waves it sent across digital assets markets. While our crystal ball can’t predict where the pieces will finally land—because it’s a snow globe and that would be crazy—some of the latest updates in this story (as of our publication time) are in our News Node below.

Beyond that, this Digital Assets Download contains lots of other developments from the digital assets world—because the breadth and potential of blockchain extends far beyond a single company or use case. Among other things, check out our Lead Block below for our animated compendium of digital assets terminology, potholes to avoid in metaverse real estate and virtual assets developments in Asia. We wrap things up with a very timely Learn the Lingo term.

For the Uninitiated: Digital Assets Download is a curated mix of insights and headlines that provide a Layer 3 Legal Perspective™ on the digital assets multiverse—created by Mayer Brown’s global Digital Assets, Blockchain & Cryptocurrency group. (Check out all of our previous editions of the Digital Assets Download)

The Lead Block

Perspectives and insights from Mayer Brown lawyers and other thought leaders that touch on digital assets, decentralized finance, cryptocurrencies and related fields.

News Node

Ongoing FTX Developments – A Brief History

Nov 2: Leaked FTX Balance Sheet Triggering Event
Divisions in Sam Bankman-Fried’s Crypto Empire Blur on His Trading Titan Alameda’s Balance Sheet.

Nov 6: Binance Liquidates Its Holdings of FTX’s Native FTT Token
Binance CEO Tweets Announcement of FTT Liquidation.

Nov 8: FTX and Binance (Briefly) Contemplate Acquisition of FTX
FTX Agrees to Sell Itself to Rival Binance Amid Liquidity Scare at Crypto Exchange.

Nov 9: Twenty-Four Hours Later, the Deal Is Off
Crypto Chaos Continues as Binance Drops Bid to Buy Rival FTX.
Binance Is Strongly Leaning Toward Scrapping FTX Rescue Takeover After First Glance at Books: Source.

Nov 11: FTX files for Chapter 11 bankruptcy protection in the US; Sam Bankman-Fried resigns as CEO.

The Fallout

Crypto Crash Intensifies Amid Downfall of Industry's 'White Knight' Bankman-Fried.
Fall of a Crypto Titan Puts an Industry on Edge.
FTX Downfall Draws Washington Scrutiny, Threatens Crypto Lobbying Campaign.
FTX Faces US Justice Department Probe: Report.

More (Non-FTX) Headlines From the Digital Assets and Blockchain World

Mass Arbitration Claim Shows Potential for Blockchain.

Zimbabwe Learns Lesson From Nigeria’s eNaira for Its CBDC Plans.

Crypto Could Save the Lebanese People From Economic Collapse – Here’s Why.

Japan’s Digital Agency Delves into DAOs, Seeks to Explore Their ‘Functions and Roles.’

JPMorgan Executes Its First DeFi Trade Using Public Blockchain.

US Securities Regulators Win Case Against Crypto Company LBRY.

Institutional Adoption Increases Despite Crypto Winter.

US Changes Sanction Reasons on Virtual Currency Service Tornado Cash.

Countries to Face ‘Grey List’ in Anti-Terror Crackdown on Crypto.

US CFPB Publishes New Bulletin Analyzing Rise in Crypto-Asset Complaints.

Select Events

Selected events for deeper dives into different parts of the digital assets and DeFi world.

Mayer Brown Tax partner Mark Leeds spoke on “Crypto, Blockchain and Fintech – Can Tax Keep Pace with Technology?” during the International Bar Association (IBA) Annual Conference on November 3, 2022 in Miami, Florida. To download the panel materials, please visit here.

Learn the Lingo

For those new to the digital assets and DeFi world, each edition of the Digital Assets Download will highlight a different term to help you be a part of the conversation.

Proof of Reserves (PoR)

A Proof of Reserves (PoR) is an independent audit and a public-facing attestation of a custodian’s reserves, matched up with a proof of user balances (liabilities).

A PoR audit is conducted by a third party that seeks to verify that a crypto custodian holds the assets it claims to on behalf of its clients.

In performing a PoR, the auditor takes an anonymized snapshot of all balances held and analyzes it using a Merkle tree, a cryptographically secured (i.e., tamper-proof) method of verification of assets on reserve that is designed to maintain privacy.

In the wake of the collapse of FTX, there have been increasing calls for crypto exchanges to implement PoR’s.

Writings on the Wall, Translating ‘Crypto’ Terms with Mayer Brown

From Airdrop to Wrapped Token, our illustrated glossary, “Writings on the Wall, Translating Securities with Mayer Brown,” has been updated with additional digital assets and cryptocurrency terms. Check out our “featured” list for the crypto terms and the full list of terms.