Cryptocurrency lender BlockFi has filed for bankruptcy in the US, citing “significant exposure” to the collapse of cryptocurrency exchange FTX. BlockFi had already halted most activity on its platform and is seeking court protection to restructure, settle its debts, and recover money for investors.

The MakerDAO community has rejected a proposal to use up to $500 million of the stablecoin USDC to invest in a portfolio of corporate debt securities and government-backed bonds, aiming to return a yield matching the Secured Finance Rate (SOFR), which currently stands at 3.8%.

Fidelity has opened up retail cryptocurrency trading accounts after announcing a waiting list for them earlier this month. The investment powerhouse sent an email to users detailing that a Fidelity brokerage account is needed to be able to fund a new Fidelity Crypto account.

Top stories in the Crypto Roundup today:

• BlockFi Files for Bankruptcy
• MakerDAO Rejects Proposal to Invest $500 Million in Bonds
• Fidelity Opens Retail Crypto Accounts
• Chart of the Week: Volatility Returns in November

BlockFi Files for Bankruptcy

Cryptocurrency lender BlockFi has filed for bankruptcy in the US, citing “significant exposure” to the collapse of cryptocurrency exchange FTX. BlockFi had already halted most activity on its platform and is seeking court protection to restructure, settle its debts, and recover money for investors.

The lender had received a rescue deal from FTX earlier this year after UST’s fall from grace. After a leaked Alameda Research balance sheet revealed it relied heavily on FTX’s FTT, a bank run on FTX occurred. That bank run revealed FTX did not have users’ funds, leading to its collapse.

BlockFi has said that FTX’s collapse was “shocking,” and sued FTX founder Sam Bankman-Fried’s Emergent Fidelity Technologies for the Robinhood (HOOD) shares held by the company and pledged to BlockFi as collateral.

In a court filing, the firm said it owed money to more than 100,000 creditors, and listed FTX as its second-largest creditor, with $275 million owed on a loan extended earlier this year. BlockFi also owes the U.S. Securities and Exchange Commission $30 million after the regulator found BlockFi did not properly register its products.

BlockFi’s Chapter 11 bankruptcy filing will allow it to develop a “reorganization plan that maximizes value for all stakeholders, including our valued clients".

MakerDAO Rejects Proposal to Invest $500 Million in Bonds

The MakerDAO community has rejected a proposal to use up to $500 million of the stablecoin USDC to invest in a portfolio of corporate debt securities and government-backed bonds, aiming to return a yield matching the Secured Finance Rate (SOFR), which currently stands at 3.8%.

The proposal came from crypto investment firm CoinShares, but saw some 72% of votes against it. The rejection comes as MakerDAO is in the process of investing billions of dollars from its reserve and optimizing its balance sheet to earn revenue from yields.

MakerDAO is one of the largest decentralized crypto lending protocols and holds $7.7 billion of assets in its reserve, called the Peg Stability Module (PSM). Its decentralized autonomous organization (DAO) is managed by holders of its governance token MKR.

Earlier this year, MakerDAO approved a plan to allocate $1.6 billion to Coinbase Prime, the exchange’s custody arm, for a 1.5% annual reward, and another $500 million to a consortium of hedge fund Appaloosa and crypto broker Monetalis to provide crypto-backed loans for an expected yield of 4.5-6%.

Monetalis also won approval to allocate up to $500 million in U.S. Treasury bonds. It invested some $200 million in Treasurys through exchange-traded funds. MakerDAO also holds around $500 million in GUSD, Gemini’s stablecoin, for which Gemini offers a 1.25% annual staking reward on its platform.

Fidelity Opens Retail Crypto Accounts

Fidelity has opened up retail cryptocurrency trading accounts after announcing a waiting list for them earlier this month. The investment powerhouse sent an email to users detailing a Fidelity brokerage account is needed to be able to fund a new Fidelity Crypto account.

Fidelity Crypto accounts promise commission-free trading of Bitcoin and Ether. Users trying to open an account are asked to read and accept several disclosures, including a risk statement clarifying digital assets present “a variety of risks that are not presented” in “other, more traditional asset classes.”

Users are also reminded that the prices of digital assets “can fluctuate quickly, and materially.” A spread of 1% is factored into every trade execution price.

Chart of the Week: Volatility Returns in November

October was a month of historically low volatility for digital assets, while the collapse of FTX in November brought about a colossal increase in volatility. Solana, in particular, has been one of the most volatile digital assets on the market, given the Solana Foundation’s links to Sam Bankman-Fried and Alameda Research.

Solana’s 30-day volatility reached 243% on November 23, an annual high. Dogecoin has been notably volatile following Elon Musk’s acquisition of Twitter, with rumors suggesting the asset will be used as part of potential payments features integrated into the social media platforms. DOGE’s volatility rose to an annual high of 210% last week.

Bitcoin and Ethereum saw their volatility rise significantly but remained below their yearly highs reached in June.

State of the Crypto by Top Tier Exchange Volume

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