27 Jan 2023

The Friday Focus: Issue 70

More layoffs, new details from bankrupt crypto lenders, another bitcoin ETF rejected, and as usual, policymakers being vocal about crypto.
The Friday Focus SVG
Weekly happenings
Top storiesBankrupt crypto lenders are trying to get out of their troubles, with Genesis already being optimistic that it can resolve creditor disputes quickly with a goal of emerging from Chapter 11 by late May. Blockfi is looking to sell bitcoin mining machine-backed loans and has also asked the court to approve bonuses to retain talent. A Celsius lawyer says most customers are entitled to a “significant return”, and the company is looking for a new hosting facility for its 20,000 mining rigs. Moreover, Celsius may issue a bankruptcy token to pay creditors.The layoffs seem to be never-ending. Gemini announced its third round of layoffs in just eight months, now letting 10% of the staff go amid the Genesis bankruptcy filing. Luno, another Digital Currency Group subsidiary, is cutting 35% of its staff.Policymakers have been vocal about crypto this week. In Europe, banks will now face stricter rules for crypto holdings. French senators voted to ease crypto licensing regulation, the UK FCA issued a “how to” list for crypto applicants, and an Irish central bank chief calls for a ban on crypto advertising. In the US, the top New York financial regulator reminded crypto firms to segregate customer funds, and the SEC is reportedly probing investment advisers over crypto custody. Senators Elizabeth Warren and Ron Wyden raised concerns over a government audit watchdog’s credibility following the fallout of FTX, and stablecoin regulation is first on the to-do list for the newly formed digital assets subcommittee.Talking about stablecoins, Moody’s is reportedly developing a stablecoin scoring system. The stablecoin issuer Circle says that its attempt to go public was quashed by the SEC, and wasn’t canceled because of the turbulent crypto market.Regardless of the turbulent times, funding rounds are still ongoing. Blockstream raised $125 million to expand mining operations, and the crypto infrastructure firm QuickNode raised $60 million and reached an $800 million valuation. Interestingly, former president of FTX US, Brett Harrison, raised $5 million for a DeFi company aimed at institutions.Another bitcoin ETF was rejected by the SEC this week; this time ARK's and 21Shares' second proposal for a spot-based bitcoin ETF. In addition, the court has now set March 7th as the date for the oral arguments in Grayscale’s challenge of the SEC’s bitcoin ETF decision. In other TradFi-related news, Signature Bank has told Binance that it will only handle user transactions of more than $100,000 as the bank decreases its exposure to digital-asset markets. That’s all - have a great weekend!
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