06 Jan 2023

The Friday Focus: Issue 67

DCG and Silvergate in trouble, never-ending contagion, more layoffs, and ominous rumors surrounding a big exchange. Let's dive into this week’s crypto news.
The Friday Focus SVG
Top storiesFirst, a short update on FTX and SBF. The new year started with SBF pleading “not guilty” to all criminal charges, and the trial is now expected to start in October. Moreover, the Manhattan U.S. Attorney's Office has launched an FTX task force to recover victim assets, regulators have issued a post-FTX collapse crypto warning to banks, and DOJ is seizing millions in Robinhood shares linked to FTX.Digital Currency Group (DCG) is taking the main stage this week. It started with Geminis’s Cameron Winklevoss accusing DCG’s Barry Silbert of stalling their efforts to reclaim funds for Gemini Earn users. The DCG subsidiary HQ Digital is reportedly shutting down, and another subsidiary, Genesis, is doing a second round of layoffs and says it needs more time to solve its issues. Not looking great for the crypto conglomerate DCG at the moment.The never-ending contagion from 2022 continues elsewhere as well, with crypto firm Wyre winding down. Vauld is rejecting Nexo’s final acquisition proposal questioning the lender’s solvency. A judge granted bankrupt Celsius the rights to $4.2 billion of customer deposits, a major blow for hopeful customers. At the same time, the former Celsius CEO is now getting sued by New York's attorney general for fraud. In other “fraudster” news, Three Arrows Capital founders are getting subpoenaed through a tweet. Maybe they should have stayed silent and not returned to Twitter to regain support.Moving over to crypto exchanges, Coinbase has to pay $100 million for the failure of scaling their AML program during the crypto boom. Regulators are halting the Binance US acquisition of Voyager Digital until the company discloses more details on its financials and relationship with its parent company Binance. Huobi might be in trouble, as rumors are pointing at the closing of internal communication channels, forcing salary payments in stablecoins, and layoffs. However, the only confirmed changes are the layoffs at this time.Silvergate is also in trouble as the share plunged on layoffs news amid a “transformational shift” and the news of over $8 billion of withdrawals during the crypto meltdown in Q4. In other news from the traditional scene, Animoca Capital halves its fundraising target for its new web3 fund to $1 billion.Moving over to policy news, UK’s crime agency has created a new crypto unit, a french central bank head wants crypto licensing in place ahead of MiCA, and Israel’s financial regulator proposes crypto inclusion to securities law.We might find the only positive news this week in the mining industry. Bitcoin miner Marathon Digital has paid off its debt to Silvergate, freeing up bitcoin that was pledged as collateral. Another miner, Core Scientific, could finally shut off 37,000 miners that were hosted for bankrupted Celsius. In other mining news, the Iranian court ordered the return of about 150,000 seized miners confiscated in 2021 to deal with power shortages in the country.That’s it, folks - let’s hope for more positive news next week!
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