20 Jan 2023

The Friday Focus: Issue 69

The dominoes keep falling, and we have another Chapter 11 filing this week. Let’s dive into it!
The Friday Focus SVG
Top storiesGenesis filed for Chapter 11 bankruptcy protection this week, as the Digital Currency Group (DCG) subsidiary reportedly owes more than $3.6 billion to creditors. Gemini, as one of the largest creditors, quickly threatened DCG and CEO Barry Silbert with a lawsuit. A few days before the Chapter 11 announcement, DCG announced the sunsetting of dividends, and another DCG subsidiary, Coindesk, is reportedly for sale. Let’s see how the crypto conglomerate DCG manages to get out of this mess. Maybe Justin Sun can help? We’ve definitely not seen the last headline here…FTX has now confirmed that they have identified $5.5 billion of liquid assets, and the new CEO said this week that restarting the exchange is not out of the picture. In other FTX news, the ex-president of FTX US said the relationship with SBF reached “total deterioration”, and it’s now been brought to light that more than one third of all Congress members received donations from FTX executives. Ouch.Crypto lending firm Nexo is back in the news again this weekagreeing to pay $45 million in a settlement with the SEC for its unregistered operations in the US. At the same time, Nexo is suing the Cayman Island regulator for its rejected license. Vauld, another troubled crypto lender, got an extension of its creditor protection until Feb 28th, but this was shorter than requested. Talking about the lending crisis of 2022, Three Arrows Capital founders Zhu and Davies are reportedly pitching to raise $25 million for a new crypto exchange called GTX. Why GTX? Because G comes after F, it says in their new pitch deck. Crypto never stops surprising…As always, some movement on the regulatory scene, with EU’s final vote on the MiCA regulation being postponed to April, and crypto companies in France getting ordered to seek authorization from regulators by the end of 2023 as they prepare for MiCA. In the US, fear spread quickly in the community when the news of a crypto-related DOJ announcement broke, but it turned out to be a “nothing burger” related to the arrest of the founder of a Hong Kong-registered crypto exchange called Bitzlato. Moreover, a new report shows that SEC increased its crypto enforcement actions by 20% in 2022.On the TradFi scene, the National Australia Bank has created a stablecoin, and the investment firm Société Générale minted a $7 million stablecoin loan from MakerDAO last week. Peter Thiel’s fund, and 8-year-long bitcoin bet, was reportedly closed in March last year just before the market crashed, with a profit of more than $1.8 billion. This happened just a few weeks before he went on stage on Bitcoin2022 in Miami and preached about bitcoin to a cheering crowd. Hmmm..Let’s leave it there folks. Have a great weekend, and stay solvent!
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