Weekly Crypto News Recap - Jan 13, 2023

Crypto Lending Crisis – Gemini and Genesis Charged by US SEC With Selling Unregistered Securities

The SEC brought charges against major crypto exchange Gemini and the troubled crypto lending and trading firm Genesis. Per the press release issued by the regulator on January 12, "The [SEC] today charged Genesis Global Capital, LLC and Gemini Trust Company, LLC for the unregistered offer and sale of securities to retail investors through the Gemini Earn crypto asset lending program." The regulator alleged that through this unregistered offering, the two companies raised "billions of dollars" worth of crypto assets from "hundreds of thousands of investors." The complaint seeks permanent injunctive relief, disgorgement of ill-gotten gains and prejudgment interest, as well as civil penalties.

Crypto Lender Genesis Owes Creditors Over $3B: FT

CoinDesk

Troubled crypto lender Genesis owes its creditors over $3 billion prompting its parent company, Digital Currency Group, to look at asset sales to pay off the debt, the Financial Times reported on Thursday, citing sources. DCG is considering offloading some of its venture-capital portfolio, worth around $500 million, the report said. Its portfolio includes crypto exchanges like Coinbase (COIN), Kraken and Blockchain.com, and the now bankrupt FTX. DCG's assets are illiquid, however, and will likely take some time to sell, the report added.

Cameron Winklevoss Calls for DCG Board to Sack Barry Silbert

Cryptonews

Cameron Winklevoss, co-founder of cryptocurrency exchange Gemini, has written an open letter to the Digital Currency Board (DCG) board, asking for the removal of the firm's CEO Barry Silbert. The open letter is the second written in recent weeks as Gemini Earn users have ~$900m of assets frozen since Genesis suspended redemptions after being negatively impacted by FTX's collapse. The Gemini co-founder claimed that Barry Silbert, as well as other key executives, deceived users by falsely claiming that crypto brokerage Genesis Global Trading, the lending arm of Genesis which is also owned by DCG, was solvent and financially stable. "By lying, they hoped to buy time to dig themselves out of the hole they created", he said. DCG denied these claims calling them a 'publicity stunt' and providing an FAQ on the situation for DCG shareholders.

Flare Launches Layer 1 Oracle Network

The Defiant

Flare, the Layer 1 oracle network that allows developers to build applications that are interoperable with blockchains and the internet, successfully completed its long-awaited token airdrop at 11:59 pm UTC on January 9th. The airdrop saw 4.279B Flare (FLR) tokens distributed to millions of recipients, including users on Binance, OKX, Kraken, Bithumb, UpBit, Kucoin, BitBank, & more, in one of the largest scale distributions in crypto history. The airdrop is a significant milestone for Flare as developers can now start to take advantage of Flare’s EVM and native data acquisition protocols, the State Connector and Flare Time Series Oracle. These native protocols, secured by the network, provide decentralized access to high-integrity data from other blockchains and the internet, enabling the creation of new use cases and monetization models.

FTX former lead engineer in talks with federal prosecutors in Bankman-Fried case

Cointelegraph

As the investigation into FTX continues, the crypto exchange’s former engineering chief Nishad Singh followed the lead of former FTX and Alameda Research executives Gary Wang and Caroline Ellison by reportedly meeting with federal prosecutors to cut a deal. Singh attended a proffer session during the week of Jan. 2 at the office of the United States Attorney for the Southern District of New York. Individuals may be granted limited immunity to share their knowledge with prosecutors at such meetings, and prosecutors likely sought to determine if Singh has valuable information to offer in the lawsuit against FTX founder Sam Bankman-Fried. Singh's cooperation could lead to him entering a plea deal like Wang and Ellison if his information is determined to be valuable.

BITCOIN

Miss Universe El Salvador Walks the Stage Holding Giant Bitcoin Staff
Remembering Hal Finney on the 14th Anniversary of the First Bitcoin Transaction
El Salvador Has Just Approved Law to Allow it to Issue Bitcoin Denominated Bonds
Bitcoin nodes data: Frankfurt houses the largest city-wide network
Bitcoin CME Futures Draw Premium for the First Time Since FTX's Collapse
Belgian MP receives Bitcoin salary for a year: Here’s what he learned
Less than 100 Bitcoin ATMs added worldwide in the second half of 2022: Data
Bitcoin futures activity fell off cliff in December
Stagnant BTC reached 15 million BTC, unmoved in 6 months

ETHEREUM

Staked ETH Passes 16M
Consensys Opens zkEVM Testnet to Whitelisted Users
Ethereum Upgrade Could Make It Harder to Lose All Your Crypto
Optimism Activity Hits New Highs As Layer 2s Close In On Ethereum
EIP-5988 Poised To Improve ZK-Rollupsâ€™ Compatibility With Ethereum
Ethereum Shanghai Testnet May Launch As Early as February to Enable Validator Staking Withdrawal

ALTCOINS

Polygon plans Jan. 17 hard fork to reduce gas fees
Bitcoin Cash Jumps 10% Ahead of Optimistic May Hard Fork
StarkWare rolls out open-source client Papyrus for StarkNet
Gitcoin To Test Decentralized Funding Protocol
GMX daily fees soar over 1100% to $2.11M
Gala Games Deletes Tweet Announcing Partnership With Hollywood Star The Rock; Native Token Drops
Ondo Finance launches tokenized US Treasuries, bonds for stablecoin holders
PleasrDAO to Launch Game Show Featuring Snowden and Ellsberg
BitDAO launches testnet for Ethereum Layer 2 network Mantle
Liquid staking tokens surge 40% in seven days, Lido rises highest
Beaten-Down FTT, Serum Tokens Lead Altcoin Rally, Triggering Short Squeeze
Astar Network Launches the XVM on Public Testnet, Enabling Truly Multichain Use Cases
Yearn Finance Releases Permissionless Vault Factory
Bears in disbelief as Gala defies crypto winter, jumping 60%
Solana Foundation RPC endpoints go offline
L2BEAT Report Takes Aim At LayerZero’s Security Model
Balancer warns some LPs to remove liquidity ASAP because of a ‘related issue’

STABLECOINS

USDC transfer volume hit 5X USDT’s in fallout from FTX collapse
Binance pushes back against report BUSD-peg stablecoin isn’t fully backed
Cosmos-based e-Money discontinues euro-backed stablecoin
Curve 3pool liquidity down 90% YOY to $600M
Nearly 65% of USDC reserves are held in US Treasury bills

CRYPTO ECOSYSTEM

Nexo sees withdrawals of $158 million in day after Bulgaria raid
Hodlnaut creditors reject the restructuring plan, prefer liquidation
Wyre Lifts Withdrawal Limits After Fresh Funding From Strategic Partner
Huobi and Solaris crypto-to-fiat debit card launches in the EU
Silvergate Writedown Casts Doubt on Future of Meta’s Failed Stablecoin Project
Alameda liquidators get liquidated on Aave as they try to consolidate funds
MetaMask warns of ‘address poisoning’ wallet scam
IPFS releases browser extension to archive tweets
FTX Loan Wiped Out $800M in BlockFi Executives’ Equity, Court Filing Reveals
Amazon Web Services Users Can Now Launch Avalanche Blockchain Nodes
Silvergate received a $4.3B bailout after FTX collapse
Reap Leverages Fireblocks To Enable Crypto Repayments With the Reap Card
Lens Protocol lets creators issue token-gated content
DCG chief Barry Silbert pens letter to shareholders, community reacts
Bitvavo rejects DCG’s 70% repayment proposal
Group One purchases 13.5% of MicroStrategy’s share
Ethereum Software Firm ConsenSys to Cut Upwards of 100 Staff
DCG labels Gemini co-founder’s allegations as ‘publicity stunts’
Hong Kong Firm With Ties to Bitmain Reorganizes to Focus on Crypto Asset Management and Hedging
Turkish automaker Togg onboards Metaco for crypto custody and governance
Crypto Bank Juno Chooses Zero Hash to Be New Custodian
Silvergate gets more bad news as Moody’s slashes its ratings

NFTS / GAMING / METAVERSE

You Can Now Buy These NFTs for Less Than $25 to Get A Zoom Call With Donald Trump
Bored Ape Collections Pump Ahead of Upcoming Sewer Pass NFT Mint
NFT sales rise 13% in December, breaking 8-month streak of declines
Tribeca Film Festival Will Sell VIP Passes as NFTs
Play-to-earn falling out of favor after ‘massive shift in priority’ — BGA survey
Yuga Labs Announces Skill-Based NFT Mint
NFT index grades the trading performance of collectors’ wallets
Art Blocks Friendship Bracelet NFT Collection Takes Top Spot on OpenSea
Touch, smell become the next big thing for the metaverse at CES 2023
OpenSea adds support for Arbitrum Nova
NFT Marketplace SuperRare Cuts 30% of Staff: 'We Over-Hired'
Metaverse to possibly create $5T in value by 2030: McKinsey report
NFT project accepted $3M to move its collection to Polygon

MINING

BTC hashrate hits ATH second time in 7 days, difficulty expected to grow 9%
Bitcoin Miner Bitfarms Looks to Amend BlockFi Loan, Warns of Default
Celsius Mining to sell 2687 BTC mining rigs for $1.34M
Bitcoin miner Iris Energy revenue falls 27% in December
Core Scientific under investigation over securities fraud
Bankrupt Core Scientific Reports Higher Bitcoin Production
Hive Earned Equivalent of 184 BTC From Curtailing Its Power Use in December
Marathon Digital experiments with overclocking to increase competitive advantage

EXCHANGES

FTX allowed by bankruptcy judge to sell LedgerX, other assets
Crypto.com to slash workforce by 20%
Crypto exchange WonderFi confirms merger talks with Coinsquare
Nigerian crypto exchange Roqqu receives European virtual currency license
SBF's New Substack Blames CZ for 'Quick, Targeted Crash' That Brought Down FTX
FTX Says it Has Secured Assets Worth $5 Billion in First Ray of Light for Creditors
Coinbase Junk Bonds Further Downgraded by S&P on Weak Profitability, Regulatory Risks
Huobi delists 33 tokens in one day, citing trading risk, low volume
Robinhood to Delist Bitcoin SV, Market Sell Remaining User Balances
Binance Wins Seventh Approval in Europe, Registers With Swedish Regulator
WazirX releases proof of reserves with majority of funds in Binance wallets
FTX Creditor Claims Going for 13 Cents on the Dollar on Bankruptcy Marketplace Xclaim
Binance CEO outlines ambitions to grow headcount by up to 30% in 2023
Coinbase to close majority of Japan operations following global layoffs: Report
Huobi clarifies Korean operations: Two separate entities aiming at same market
Gemini officially discontinues Earn product
Judge Allows Binance.US Bid to Buy Voyager Assets to Advance
Crypto.com delists USDT for Canadian users following OSC ban
Binance annual revenue grew 10x over the past 2 years, while OKX’s grew 4x
Binance employees to adhere to 90-day period prior to trading
Binance sees $12B withdrawn in 60 days
Huobi Korea to become an independent entity, breaking ties with Huobi Global
Crypto Exchange Bithumb Hit With Tax Investigation, Prosecutors Grill ‘Major Shareholder’
Coinbase Cuts Around 20% of Workforce as Crypto Winter Rages
Huobi Korea moves to sever ties with the mothership: News1
Swyftx to chop its ‘Earn’ program this week, citing murky regulations
Pace of Huobi Withdrawals Subsides as USDD Sees Renewed Slide
FTX attempting to recover millions donated to charities
Binance Listings Cause Crypto Assets To Spike an Average of 41%: New Research
Justin Sun Moves $100M in Stablecoins to Huobi Amid Rush of Withdrawals

CAPITAL RAISES

Crypto Market Maker CyberX Gets $15M From Foresight Ventures
Cosmos-Based DeFi Protocol Quasar Raises $5.4M
Alkimiya Raises $7.2M Funding Round to Grow Cash Flow Hedging Protocol for Miners, Stakers
The Easy Company secures $14.2M funding for new crypto wallet with social features

INVESTMENT MANAGEMENT

Samsung investment arm considering spot-Bitcoin ETF in Hong Kong
Samsung investment arm to launch Bitcoin Futures ETF amid rising crypto interest
UAE investor groups launch billion-dollar web3 fund
Cointelegraph Has Launched an Accelerator Program for Innovative Web 3.0 Startups
Galaxy Digital's Head of Research Sees More Venture Funding for Web3 Firms This Year
Osprey Funds is operating with less than 10 employees after layoffs
Crypto VC LongHash launches soulbound tokens to reward contributors
Crypto VCs say half their token bets are sidelined with no launch date in sight
AVAX Slips 2% As Grayscale Dumps Avalanche From Large Cap Fund

TRADFI / TECH

Investment firm Société Générale mints $7 million in stablecoin loan from MakerDAO
Jack Ma surrenders control of fintech giant Ant Group
South Korean Software Giant AhnLab Unveils Crypto Wallet
Metropolitan Bank Heads for Crypto Exit
Mastercard partners with Polygon to launch Web3 musician accelerator program
Fidelity downsizes value of its Twitter holdings

CBDC

BIS economists suggest improving TradFi with CBDC to attract users away from crypto
Nigeria revisits its payments landscape amid sluggish eNaira adoption
China’s central bank includes digital yuan in report on currency circulation
UK ‘Fully Behind’ Stablecoin for Wholesale Settlements, Treasury Official Says
Russia to begin work on CBDC settlement system as sanctions endure
Digital pound won’t track retail transactions, UK minister says
Mexico’s digital peso delayed, launch date unclear

REGULATORY / COUNTRIES

Winklevoss slams SEC charges against Gemini as a ‘super lame … manufactured parking ticket’
US House Republicans to Set Up Crypto Committee to Oversee Shaky Industry: Report
After FTX, Crypto Companies No Longer Have ‘Benefit of the Doubt’ on Capitol Hill, Says Congressman
Nexo’s Bulgaria office raided by police
Grayscale says recent events will not affect GBTC conversion case against SEC
CFTC Calls for Default Judgment Against Ooki DAO in Ongoing Lawsuit
Justice Department Probing Saber Labs Founders Over Solana-Based Projects: Sources
Treasury Dodges Questions From Congressman Over Tornado Cash
Hong Kong to Propose Approved Set of Crypto Tokens for Retail Trading: Reuters
Former Komainu president Orser named CEO of Dubai’s crypto regulator
Proposed bill in Argentina encourages citizens to reveal crypto holdings
US Court Hands Down 10-Month Sentence in Coinbase Insider Trading Case
Thai regulator investigating Zipmex over potentially unauthorized earn program
France’s AMF president announces support for mandatory crypto licensing
Sources claim FTX investigation could exhaust the SDNY court
Sanctions couldn’t ‘pull the plug’ on Tornado Cash: Chainalysis
Nepal Orders Internet Providers to Block Crypto-Related Websites
SEC also investigating Mango exploiter Eisenberg: CFTC Commissioner
Nigeria to create legal framework for stablecoins and ICOs
French Financial Regulator Supports Faster Mandatory Licensing for Crypto Firms
Federal Prosecutors and SEC Probing Crypto Titan Digital Currency Group: Report
US prosecutors subpoenaed hedge funds for records of Binance dealings
US authorities launch page to notify FTX’s alleged victims about SBF’s case
Binance joins association to address compliance with global sanctions

ENVIRONMENTAL, SOCIAL, GOVERNANCE

Climate tech VC argues Bitcoin’s ESG positives outweigh its negatives 31:1
Bitcoin’s energy efficiency will increase with adoption – proponent says

SURVEYS, HACKS, MISC

Victims of ‘Textbook Ponzi’ BitConnect to Receive $17 Million in Restitution
Head of S Korea’s V Global Crypto Exchange Will Serve 25 Years in Jail for $2.3bn Fraud
Like son, like father, as Joseph Bankman retains attorney: Report
Bitcoin, Ethereum Hold Ground After Further Signs of Inflation's Retreat
FTX Arena Naming Rights Deal Officially Dead
FTX Creditor Names Can Remain Sealed for Now, Judge Rules
BlockFi creditors appeal court to redact their information
FTX Had an Office Across the Street From the White House
Nomad exploit wallet address transfers $1.5M to Tornado Cash
Former FTX US President Promises to Share More Information ‘In Time’
DeFi-type projects received the highest number of attacks in 2022: Report
FTX spent $40M on food, flights, and hotels in just 9 months: Court filings
Messari CEO Ryan Selkis Says He Was Briefly Suspended from Twitter for ‘Impersonating Myself’
US trustee objects to FTX’s planned sale of LedgerX and other units: Reuters
Ferrari cuts ties with crypto sponsor ahead of 2023 Formula One season
Chinese criminal steals $4.1M in crypto from victim’s car
FTX debtors and Bahamas liquidators settle on asset recovery strategy
Early Facebook investor and Proof CEO Kevin Rose signs with Hollywood’s UTA: Exclusive

This material is provided by GSR (the “Firm”) solely for informational purposes, is intended only for sophisticated, institutional investors and does not constitute an offer or commitment, a solicitation of an offer or commitment, or any advice or recommendation, to enter into or conclude any transaction (whether on the terms shown or otherwise), or to provide investment services in any state or country where such an offer or solicitation or provision would be illegal. The Firm is not and does not act as an advisor or fiduciary in providing this material.

This material is not a research report, and not subject to any of the independence and disclosure standards applicable to research reports prepared pursuant to FINRA or CFTC research rules. This material is not independent of the Firm’s proprietary interests, which may conflict with the interests of any counterparty of the Firm. The Firm trades instruments discussed in this material for its own account, may trade contrary to the views expressed in this material, and may have positions in other related instruments.

Information contained herein is based on sources considered to be reliable, but is not guaranteed to be accurate or complete. Any opinions or estimates expressed herein reflect a judgment made by the author(s) as of the date of publication, and are subject to change without notice. Trading and investing in digital assets involves significant risks including price volatility and illiquidity and may not be suitable for all investors. The Firm is not liable whatsoever for any direct or consequential loss arising from the use of this material. Copyright of this material belongs to GSR. Neither this material nor any copy thereof may be taken, reproduced or redistributed, directly or indirectly, without prior written permission of GSR.