Crypto exchanges are mysteriously suspending support for select Solana-based stablecoins. Plus, Multicoin.

• Documents, balance sheets, emails or otherwise that show FTX contagion —if you've got 'em, share 'em: crypto@axios.com.

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Binance and OKX yesterday suspended deposits in Circle's (USDC) and Tether's (USDT) stablecoins based on the Solana blockchain, in a puzzling display of crypto exchange operations.

• Beyond the notices of the suspension, the exchanges said little more to explain the reason for the abrupt move.
• "Just extra mitigation of on-chain risk," Lennix Lai, director of financial markets at OKX, tells Axios.
• Binance did not respond to emailed queries yesterday and today.

Why it matters: The top two dollar-pegged stablecoins by market capitalization are listed on dozens of exchanges, but the sudden, unexplained actions taken by a few of those exchanges raise the question of how stable the Solana ecosystem is.

Driving the news: The suspension of support for the two top Solana-based stablecoins was largely noticed with the announcement from Binance, but the first to take action was Crypto.com, when the exchange halted them last week in the mayhem of FTX's unwinding.

• Crypto.com's chief said withdrawals, in general, have resumed, but there are no explanations specific to the Solana-based stablecoins.
• Binance resumed deposits for USDT yesterday, "after internal assessment and review." No word yet on USDC.
• OKX posted a message on its website yesterday saying it would delist those tokens at 3am UTC or 10pm ET. It updated the message to say that support for deposits and withdrawals would be halted. (It's effectively the same thing but with less harsh phrasing.)

What they're saying: If there was an FTX-related angle for the move, it wasn't obvious: "Is there some angle to Alameda I don't understand causing the delistings?" Twitter user @cmsholdings asked.

• Circle CEO Jeremy Allaire responded: "Not clear what the motivations are for exchange actions, which are disappointing."
• Circle spokesperson Rachel Busch tells Axios that the USDC natively issued on Solana was "functioning fine."

What others are saying: Kraken supports Solana-based USDC, the exchange's Bill King tweeted yesterday.

Context: FTX contagion spread to the Solana ecosystem quickly, owing to the leadership role of FTX founder and former CEO Sam Bankman-Fried (SBF) in that community.

• The Solana blockchain has not suffered any incidents this month.

The intrigue: If Circle presented any risk, exchanges might have reason to check things out.

• Some alarm bells were raised when the yield on Circle's Earn product showed zero on Wednesday; archived web pages showed a 0.25% yield on them the day earlier.
• The change seemed to coincide with Genesis Global's crypto lending unit announcing that it would halt customer withdrawals and loan originations, which led to the Winklevoss twins' exchange Gemini suspending its yield-earning Earn product.
• "Circle chose to change the yield from 0.25% yield to 0% before Genesis closed their credit lines," Busch, the spokesperson for Circle, says. "Circle Yield has historically been driven by demand to borrow in crypto capital markets."

What we're watching: Circle is set to file third quarter earnings in a few days.

Here's something you won't hear many other crypto investors say: "I expect in 10 years' time, Bitcoin will be irrelevant," Brady writes.

• Multicoin Capital co-founder Kyle Samani said exactly that last year in an interview with Cointelegraph. It's not a new position for him.

Background: Multicoin has always positioned itself as a contrarian investor. Not only is it critical of Bitcoin, it's also been making bets against the original smart contract blockchain, Ethereum.

• In 2018, it came out with a thesis in support of EOS, a smart contract blockchain, which would ultimately complete the largest initial coin offering of them all. That didn't work out.
• In recent years, it's been one of the biggest boosters of Solana, another smart contract blockchain launched by tech industry veterans. That blockchain has been hit especially hard by the FTX unwinding.

State of play: The whole market is down, but bitcoin isn't down nearly as bad as some of Multicoin's biggest bets.

• Not completely eschewing Ethereum, in September 2021, Multicoin led a $17.4 million round in Eden Network, a transaction relay.
• Helium, the grassroots data network, represented its single biggest position in its first fund. Early this year, it announced it was looking for more projects that worked like Helium.
• Not shown: In January, it announced co-leading a $46 million round in Metaplex, a protocol for NFTs, whose token did not come out till September, when it first sold for about $0.88. Now it trades around $0.06, according to CoinGecko.

What they're saying: "We don't comment on performance," Multicoin spokesperson John Robert Reed told Axios via email last night.

• Reed told Axios that any rumor about the firm's health is "entirely false and has no merit."

What we're watching: One Twitter user claiming to be an LP expressed concerns this morning. Axios is in the middle of reporting out such complaints.

Be smart: No one said this would be easy. Polychain, a premiere crypto fund, was feted for hitting a billion-dollar valuation, only to have questions swirl as its bets tanked amid Crypto Winter.

• By 2020, the limited partners who stuck it out were crowing again about wild gains.

The Securities Commission of the Bahamas announced today that it had moved FTX Digital Markets (FDM) assets to wallets in the control of the government agency, Brady writes.

What they're saying: "The Commission has the authority to apply for a judicial order to protect the interests of clients or customers of a registrant of the Commission," the letter said.

Details: The value of the assets on FDM is not clear.

What we're watching: A venue battle over the FTX bankruptcy is underway. A filing yesterday sought to bring proceedings under the Bankruptcy Court for the District of Delaware.

• However, the Bahamas letter included this cryptic statement: "It is not the understanding of the Commission that FDM is a party to the U.S. Chapter 11 Bankruptcy proceedings."
• Axios contacted the regulator about the statement. It replied only to note we would receive subsequent statements on the case, without acknowledging the question.

The other side: "This appears to be part of a turf battle between Bahamian authorities and the U.S. bankruptcy proceedings," Matthew Gold and Dov Kleiner, bankruptcy partners at Kleinberg Kaplan, tell Axios in a statement.

Yes, but: "On its face, there is nothing alarming about this move. If the SEC secured these digital assets — in the wake of an unprecedented collapse, apparent fraud, and looming legal fight — it might be considered prudent by many," Renato Mariotti, partner with Bryan Cave Leighton Paisner, tells Axios via a spokesperson.

• He noted that authorities in the Bahamas appear willing to cooperate with other nations.

🕳 Digital Currency Group company Genesis has been seeking $1 billion in emergency funding. (WSJ)

👀 More details on investments that SBF made. (Semafor)

📊 DEX volumes are up significantly as traders flee centralized exchanges. (Bloomberg)

🩹 Blockchain industry licks its wounds in D.C. while lawmakers offer reassurance. (Axios)

#Twittershutdown and #GoodByeTwitter are trending on Twitter amid what looks like a standoff between the social media giant's employees and its new CEO Elon Musk, Crystal writes.

What's happening: A potential shutdown couldn't come at a worse time for Crypto Twitter.

• Details of FTX's implosion unfolded right on the platform.

Zoom out: Meanwhile, the man who kicked off the crypto chaos made his own meta comment on Twitter news.

💭 Our thought bubble: It's nuts what folks won't say on the record to a reporter, but will freely tweet.

The intrigue: Finra is looking into that.

This newsletter was edited by Pete Gannon and copy edited by Carolyn DiPaolo.

Who's scared Twitter will get shut down?—B & C