Crypto Guides, Knowledge & Insights

The bankruptcy team, according to Sam Bankman-Fried, is mistaken about FTX US's insolvency.

Discredited ex-CEO Sam Bankman-Fried disputes numerous assertions from the FTX bankruptcy reorganization group that millions of dollars worth of client cash are gone from both the international and U.S. exchanges.　　John Ray, the reorganization CEO of FTX who also supervised Enrons bankruptcy, delivered a speech yesterday to the organizations committee of debt holders. Only $181 million in FTX US money had been discovered after what Ray called a “Herculean investigative effort.” It claims that after FTX filed for Chapter 11 bankruptcy on November 11, half of those funds were taken from purses in “unauthorized transfers.”　　　　“These claims by S&C are wrong, and contradicted by data later on in the same document,” Bankman-Fried mentioned Sullivan & Cromwell, the team of lawyers behind the presentation, in a Substack newsletter. “FTX US was and is solvent, likely with hundreds of millions of dollars in excess of customer balances.”　　Bankman-Fried has recruited a team of lawyers to defend his rights in the Delaware FTX bankruptcy case. Bankman-Fried is currently placed under house arrest and is accused of eight economic offenses related to the bankruptcy of FTX. But despite this, he continues to publicly refute statements made by the reorganization team and distribute pictures of spreadsheets he claims

2023-01-20Deep Dive

Authorities start seizing Bitzlato Exchange, and its founder is detained in Miami

The creator of the Russian cryptocurrency exchange Bitzlato, Anatoly Legkodymo, was detained in Miami for operating an illegal business, according to a statement from the Department of Justice (DoJ).　　According to the report, Bitzlato actively promoted cryptocurrency crime. U.S. Breon Peace, an attorney, offered his thoughts on Legkodymos capture. “Institutions that trade in cryptocurrencies are not above the law and their owners are not beyond our reach,” the statement reads.　　The Department of Justice was able to take down the Chinese laundering money enterprise, which specialized in a variety of illegal behavior, with the help of an international investigation team and community resources in the United States. “Todays measures send the unmistakable message: whether you break our laws from China or Europe—or misuse our financial system from a tropical island—you can expect to answer for your crimes inside a United States courtroom,” stated Deputy Attorney General Monaco.　　A public key for cryptocurrency crime is Bitzlato.　　According to reports, Legkodymo ran Bitzlato, one of the biggest crypto-crime exchanges. The exchange was primarily used by crooks to transport money from drug trade and launder cryptocurrency from malware infections. Users of the Honk-Kong registered exchange had to provide very little identification. without the requirement for significant know-your-customer

2023-01-20Deep Dive

Layoffs Confirmed by ConsenSys

According to CEO Joe Lubins blog post published on Wednesday, the Ethereum development firm ConsenSys will eliminate 97 positions. This mostly confirms a story published by CoinDesk the previous week.　　“Today we need to make the extremely difficult decision to streamline some of ConsenSys‘ teams to adjust to challenging and uncertain market conditions,” said Lubin. “This decision will impact a total of 97 employees, which represents 11% of ConsenSys’ total workforce.”　　According to a blog post published on Wednesday by ConsenSys CEO Joe Lubin, the firm will eliminate 97 positions over a period of 12 to 36 months. The extension of health coverage in pertinent jurisdictions and individualized assistance from an outside recruitment company are also promised, according to the statement.　　ConsenSys, which has its headquarters in New York City and presently employs roughly 900 people, is just one of several cryptocurrency businesses that have been forced to lay off staff as a result of the companys ongoing bear market, which is thought to have cost 27,000 jobs since April.　　Lubin emphasized ConsenSys financial stability by adding that the painful decision to streamline would direct the companys strategy around its core products and the investigation of fresh possibilities in Web3 commerce as it matures

2023-01-20Deep Dive

Crypto Bankruptcy Proceedings Highlight Regulatory Shortcomings

Celsius, BlockFi, Voyager, and, most recently, FTX — along with its roughly 100 related companies – all used the Chapter 11 provision of the US bankruptcy code in 2022 to reorganize their ailing business lines. Meanwhile, Three Arrows Capital filed for Chapter 15 bankruptcy in order to deal with insolvency and creditors on a global scale.　　According to Joe Acosta, a partner at the law firm Dorsey s an investment, a currency, a digital asset, or something else,” Acosta said.　　Not only is the outcome of the individual cases important, but so is the possibility of precedent-setting judgments that might create a legal and regulatory framework for the sector as a whole. There have already been prominent examples, according to Acosta.　　Celsius, previously one of cryptos most renowned lenders, declared bankruptcy in July 2022 after suspending withdrawals the previous month due to “extreme market conditions.” The presiding judge determined earlier this month that tokens put in interest-bearing accounts belong to Celsius, not the clients. According to Acosta, it might pave the way for future token classification and ownership regulations.　　“[Celsius bankruptcy] Judge [Martin] Glenn found that crypto is not a currency — by the standard definition — because it is not a medium of

2023-01-20Deep Dive

Due to the Genesis Crisis, DCG halts its quarterly dividends.

After being impacted by the collapse of FTX, DCGs subsidiary faced a second round of layoffs. Digital Currency Group (DCG), a crypto conglomerate owned by Barry Silbert, announced that it would stop paying quarterly dividends until further notice.　　The cryptocurrency investment company stated in an email to shareholders that it is now focusing on “cutting operating expenses and conserving liquidity” in reaction to the current market climate. The communication was obtained by Bloomberg.　　　　Problems with DCG　　Barry Silberts empire was significantly compromised by the FTX crash, with DCG coming under close examination. The venture capital business owns a number of companies, including consultancy firm Foundry, institutional loan company Genesis, and Grayscale, the biggest online asset manager in the world.　　Genesis was compelled to halt new loan originations and redemptions as a result of its financial predicament, which had an immediate impact on the Gemini Earn program. As a result, the conflict with the co-founder of the cryptocurrency exchange, Cameron Winklevoss, intensified. Winklevoss accused DCG of accounting fraud and deception and demanded Silbert resign.　　According to earlier reports, Gemini Earn customers who invested in Genesis high-yield savings program owe the company $900 million. Investors were originally reassured by DCG and Gemini that the two businesses were

2023-01-19Deep Dive

The Next Bankruptcy Domino May Be Genesis

Genesis, which halted customer withdrawals two months ago, has become the latest crypto industry participant to declare bankruptcy.　　Bloomberg reported on Thursday that the business held secret talks with various creditor groups. The loan division has been languishing since the collapse of FTX, where it had $175 million in locked funds, and had told potential investors that it would go bankrupt if it couldnt secure new cash.　　Genesis was “at all costs” attempting to avoid insolvency, which they defined as “admirable but pricey.”　　Genesis parent business, Digital Currency Group, was recently accused by Gemini of making false promises concerning Genesis solvency. Cameron Winklevoss, co-founder of Gemini, has asked DCGs board to remove CEO Barry Silbert, claiming he deceived Gemini and prevented its consumers from accessing $900 million held in a Genesis-related product.　　However, Silbert refuted this assertion, claiming that DCG owed Genesis $447.5 million in addition to $78 million of bitcoin maturing in May of this year. Genesis is also owing another $1.1 billion promissory note, which matures in 2032, he claimed.　　He further stated that DCG has not borrowed funds from Genesis since May 2022 and is current on all existing debts.　　Nonetheless, DCG reportedly warned shareholders this week that dividends will be suspended in

2023-01-19Deep Dive

Binance named among Bitzlato top 3 receiving counterparty

According to a US Treasury Financial Crimes Enforcement Network order, Binance is one of Bitzlatos top three receiving counterparties (FinCEN).　　On January 18, US officials filed enforcement measures against the little-known exchange, accusing it of assisting the laundering of $700 million. Anatoly Legkodymov, the exchanges Russian creator, was apprehended in Miami.　　According to the FinCEN ruling, about two-thirds of Bitzlatos top receiving and sending counterparties were linked with darknet markets or frauds. The authorities noted that, in addition to Binance, Bitzlatos top receiving counterparties included Russias darknet Hydra and Ponzi scheme “TheFiniko.”　　Meanwhile, a Binance representative stated:　　“Binance is glad to have offered significant assistance to international law enforcement partners in support of this investigation. This reflects Binances commitment to collaborating with law enforcement partners around the world.”　　FinCEN stated in its decision that all covered financial institutions are prohibited from sending funds involving Bitzlato.　　The transaction was determined to be a “major money laundering risk in connection with illicit Russian finance,” according to the police.　　The order takes effect on February 1.　　As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

2023-01-19Deep Dive

OKX releases a proof-of-reserves report that reveals $7.5 billion in "clean assets."

According to a proof of reserves released by the exchange on Thursday, OKX has $7.5 billion in reserves, none of which include its native cryptocurrency. Although this is OKXs third proof of reserves, it is the first to display the precise split of holdings.　　The research reveals that the exchange has an excessive reserve ratio, with 105% reserves for bitcoin (BTC), 105% reserves for ether (ETH), and 101% reserves for USDT.　　　　In reaction to CryptoQuant creating a metric to gauge the “cleanliness” of reserves, OKX has decided to disclose the precise asset composition. This is referred to by CryptoQuant as an exchanges reliance on its own native cryptocurrency. According to CryptoQuants data, OKXs reserves are entirely clean. While Huobi is 60% clean, Binance is 87% clean, Bitfinex is 70% clean, and so on.　　“I personally think everyone will learn a ton over the next six months to a year. We will all stress test each others proof of reserves, hopefully in a constructive way,” According to a discussion with CoinDesk with OKXs Chief Marketing Officer, Haider Rafique. “We are all going to learn from each other and ask the hard questions - hopefully most venues have good intentions.”　　Rafique claims that OKX intends to

2023-01-19Deep Dive

As per reports, Genesis could declare bankruptcy as early as this week.

Genesis Global Capital, a cryptocurrency lender, is getting ready in case it decides to seek bankruptcy proceedings, according to a Wednesday report from Bloomberg.　　According to the article, which relied on sources with knowledge of the situation, a filing may occur as soon as this week. As it struggles with a cash constraint, the division of crypto behemoth Digital Currency Group, or DCG, has been in private discussions with creditor organizations. Plans may alter as a result of ongoing negotiations with creditors, according to the article.　　　　The Financial Times said last week that Genesis has its creditors more than $3 billion. As FTX and Three Arrows Capital, Sam Bankman-bitcoin Frieds exchange and hedge fund, failed, DCG has been attempting to fix its financial issues. The FT had previously disclosed that DCG might generate money by selling investments in its startup portfolio.　　Following the collapse of FTX, Genesis stopped redemptions in November and stated at the time that bankruptcy was a possibility unless new capital could be raised.　　Its lending partnership Gemini, a cryptocurrency exchange founded by Cameron and Tyler Winklevoss, has been affected by the instability at Genesis.　　Due to the more than $900 million in client assets still in Genesis, Gemini was forced to

2023-01-19Deep Dive

Blur, SudoSwap, and Other Marketplaces in Sewer Pass Mint are Blacklisted by Yuga Labs

In its most recent NFT drop, Sewer Pass, Yuga Labs blacklisted at least four markets that dont require NFT fees.　　Simon Cousaert, Director of Data at The Block Research, claims that Sewer Pass has code that prevents NFT transfers from purses owned by Blur, SudoSwap, LooksRare, and NFTX. NFTX, SudoSwap, and LooksRare all have optional royalty systems, whereas Blur and NFTX choose not to.　　　　This action is the most recent shot in the ongoing conflict over NFT royalties. Yuga Labs joins other NFT creators in prohibiting royalty-evading venues from doing business with their NFTs by adding those marketplaces to a blacklist.　　A second NFT market with optional fees, X2Y2, was prohibited by QQL in September from handling the QQL Mint Pass NFT drop. “When someone else can select where you will move your NFT, you are not the true owners anymore,” X2Y2 said in response to the blacklisting.　　One hour after its inception, Sewer Pass generated $1.3 million in trading volume, and just four hours later, it had gathered approximately $5 million in ETH.　　What is Yuga Lab？　　Greg Solano and Wylie Aronow, two friends, are the creators of Yuga Labs. The dynamic team agreed to conceal their identities until early this year, as per BuzzFeed

2023-01-19Deep Dive

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