😬 A Big Oops From BlockFi
In today's edition: 🎙️ New TCB pod on Genesis, 😯 BlockFi's financials, 💼 Genesis' lawsuit against "Bitcoin Jesus", 🤨 the potential new token of Celsius, and more!
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New TCB Pod Today!
The Chopping Block: Will Genesis Creditors Be Made Whole?
Welcome to “The Chopping Block!” – where crypto insiders Haseeb Qureshi, Robert Leshner, Tom Schmidt, and Tarun Chitra chop it up about the latest news. This week, they covered:
why the markets were up so much recently
how and why Genesis entered into bankruptcy
why the hole in DCG's financials are potentially much bigger than previously reported
the differences between the bankruptcies of FTX and Genesis
whether 3AC founders Su Zhu and Kyle Davies will find success with their new exchange
what will happen to GTBC now that a huge portion has already been liquidated
whether Tarun is predicting "the start of a new supercycle"
the large percentage of vested SOL held by the FTX estate
how SBF is still trying to win the public
What’s Poppin’?
BlockFi Mistakenly Reveals Its $1.2B FTX Exposure
by Samyuktha Sriram
Unredacted financials that were accidentally released show that crypto lender BlockFi has far more exposure to FTX and its related entities.
Celsius Plans to Repay Creditors With Crypto Token: Report
Bankrupt crypto lender Celsius plans to repay creditors by issuing a token, according to a Bloomberg report on Tuesday. Celsius attorney Ross M. Kwasteniet told a bankruptcy court that the new token would be part of a payout plan from a reorganized company that is properly licensed. However, this plan needs to be approved by a creditor committee to come to fruition.
Earlier this year, Celsius was granted ownership of over $4.2 billion worth of crypto held in users’ Earn Accounts. Judge Martin Glenn ruled that the firm was free to use these assets at their own discretion, approving the sale of $23 million stablecoins to generate liquidity.
Genesis Seeks $20.9M From ‘Bitcoin Jesus’ Roger Ver
Embattled crypto lender Genesis is suing Roger Ver, an early investor in crypto who is sometimes called “Bitcoin Jesus,” for allegedly failing to settle crypto options transactions before the expiry date. A legal notice, reported by Offshore Alert, has summoned Ver to pay at least $20.9 million in damages.
Ver was also sued by CoinFlex, a crypto exchange that filed for restructuring, in July. The exchange ordered him to pay $84 million for failing to repay the debt on his margin position.
Binance Mistakenly Stores Collateral in Customer Funds Wallet
Major crypto exchange Binance acknowledged a storing error, where it accidentally held collateral for the crypto tokens it issues in the same wallet as customer funds, Bloomberg reported on Tuesday.
Nearly half of the reserves of 94 Binance-peg (B-Tokens) have been stored in the cold wallet labeled “Binance 8.” A spokesperson for the crypto exchange said Binance was aware of this mistake and was in the process of transferring assets back to the dedicated collateral wallets.
100% of SushiSwap’s Trading Fee to Be Allocated to Treasury
A governance proposal passed on Jan. 23 with 99.9% of votes in favor has called for 100% of trading fees on the SushiSwap decentralized exchange to be sent to the protocol’s Treasury. This payout ratio will remain in place for up to one year, or until new tokenomics are implemented.
Last month, SushiSwap’s head chef Jared Grey said that Sushi was quickly running out of funds, revealing that the Treasury had around 1.5 years of runway left. He called for immediate action to ensure the protocol had sufficient resources to continue operations.
Blockstream Raises $125M to Fund Bitcoin Mining Services
Crypto firm Blockstream has raised $125 million from investors led by Kingsway Capital to expand its institutional Bitcoin mining colocation services. The funds were raised via a convertible note and represents the firm’s first form of debt financing.
The raise comes at a particularly challenging time for Bitcoin miners. Rising hashrate, and hence a higher cost of operations, coupled with a mostly depressed crypto market has led to several Bitcoin miners declaring bankruptcy over the last few months.
Aave Votes to Deploy V3 on Ethereum
Lending protocol Aave will deploy version 3 on the Ethereum blockchain, subject to a governance vote passing successfully this week. At the time of writing, 100% of voters were in favor of the proposal, which will see increased compatibility between V3 pools and less complexity overall.
“V3 is the most significant upgrade to the Aave Protocol, and ETH is Aave’s first and largest market,” wrote the Aave team on Twitter. Ethereum represents $5 billion worth of Total Value Locked on Aave version 2.
Index Coop Gives Investors Exposure to Crypto LSD Market
Decentralized autonomous organization Index Coop has launched new structured products that will give investors exposure to the popular liquid staking derivatives (LSD) market. The Diversified Staked ETH index (dsETH) will feature Rocket Pool’s rETH, Lido’s stETH and Stakewise’s sETH2.
LSDs have seen an uptick in popularity as Ethereum’s Shanghai upgrade looms closer, seeing as it brings withdrawal functionality to staked ETH held in the deposit contract. On Tuesday, blockchain analysts noticed that the Wormhole Network hackers had swapped $155 million worth of stolen crypto to stETH.
In Other News…✍️✍️✍️
Circle, the crypto payments firm behind USDC, said that its plans for a $9 billion initial public offering (IPO) did not come to fruition because the SEC did not approve it.
Fractal, a web3 gaming platform that was launched on Solana in late 2021, announced that it is now available on Polygon.
On March 7th, the District of Columbia Court of Appeals will hold oral arguments in Grayscale Investment's appeal of the SEC's denial to convert the Grayscale Bitcoin Trust into an ETF.
The mining division of bankrupt lending company Celsius has plans to temporarily house 20,000 rigs that it is currently retrieving from Core Scientific.
Vitalik Buterin closed a short position in RAI, a non-pegged stablecoin, earning a profit of $92,000.
The French National Assembly voted to ease licensing requirements for crypto firms, passing an amendment that aligns with EU regulations.
The $$$ Corner…
QuickNode, a web3 development platform, garnered $60 million in a Series B round at an $800 million valuation.
Gemba, a metaverse-related company, closed an $18 million Series A round.
Gaming studio Voldex announced a Series A investment round led by a16z but did not disclose the amount.
What Do You Meme
📈 Your Market Update 📉
BTC is down .81%, trading at $22,648
ETH is down 4.13%, trading at $1,548
BTC dominance: 41.37%
Crypto market cap: $1.06 trillion
*All data as of today, 5 am ET
Recommended Reads
Vitalik’s guide on stealth addresses
Degen Sensei on DeFi credit rates:
Miles Deutscher on Pantera Capital’s 2023 Outlook Report:
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