Jupiter's Meow Hits Back at Airdrop Criticism 👊
Weekly News Recap: 💸 FTX's repayment pledge, 💰 Tether's $2.85B profit, 🤝 Genesis' SEC settlement, 🕵️ Major Bitcoin busts, 🔄 Binance's shifts, 🔓 Ripple's security woes, and more!
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In a riveting episode of Unchained, Meow, founder of Solana-based DeFi protocol Jupiter, confronts the whirlwind of criticism surrounding the JUP airdrop. Addressing concerns that the airdrop disproportionately favored the Jupiter team, Meow challenges these views with a candid perspective. He likens the rapid influx of critiques to "helicopters that fly by and drop shit," suggesting that many detractors may not fully grasp the intricate planning and intent behind Jupiter's strategic moves. This episode dives into the nuances of the JUP launch, exploring the delicate balance between innovative token distribution and community engagement, while Meow defends the integrity and future aspirations of his project.
Listen to the episode on Apple Podcasts, Spotify, Fountain, Overcast, Podcast Addict, Pocket Casts, Pandora, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform. Or watch it on YouTube.
Weekly News Recap
FTX Moves to Fully Repay Customers, Rules Out Relaunch
In a major turn of events, FTX, the giant cryptocurrency exchange that filed for bankruptcy in late 2022, informed a bankruptcy judge that it will not be reviving operations. This frees FTX to commit to fully repaying its customers.
The failure to restart the exchange underscores how weak its infrastructure was that it could not find a partner willing to put in the money and effort to build upon the remains of what was once the world’s third-largest crypto exchange by volume.
This move is expected to bring some relief to the numerous customers affected by FTX's collapse. But pegging the value of customer accounts to the date FTX filed for relief left customers complaining that a collapsing FTX drove prices down for nine days before it sought protection.
Also this week the FTX estate told Bloomberg that it had doubled the entity’s cash reserves to $4.4 billion from the $2.3 billion in October.
Meanwhile, a judge authorized the sale of FTX's Bahamas properties, including Sam Bankman-Fried's $40 million penthouse, as part of the exchange's bankruptcy proceedings.
Lastly, in related news, Effective Ventures Foundation agreed to return about $26.8 million in donations received from FTX.
Celsius Commences $3 Billion Asset Distribution to Creditors
Celsius Network, the cryptocurrency lending platform cofounded by Alex Mashinsky that was under Chapter 11 protection, has commenced the distribution of over $3 billion in assets to its creditors as part of its reorganization. This crucial step, confirmed by the United States Bankruptcy Court for the Southern District of New York, coincides with the emergence of Celsius from bankruptcy.
In addition to the distribution, Celsius creditors are now the owners of a new Bitcoin mining company, Ionic Digital Inc., created by Celsius with mining operations managed by Hut 8.
Tether's Record Profits in Q4
Tether Holdings Limited, the entity behind the popular stablecoin Tether (USDT), reported an unprecedented financial performance for the fourth quarter of 2023. The firm's net profit soared to $2.85 billion, a notable milestone in its operational history. This achievement was largely driven by substantial earnings from U.S. Treasury securities, contributing approximately $1 billion to the net operating profits. The remainder of the profits primarily stemmed from the appreciation of the company’s Bitcoin and gold reserves.
The quarter also witnessed remarkable growth in Tether's excess reserves, which climbed by $2.2 billion, reaching a total of $5.4 billion. These excess reserves are crucial in covering the firm's outstanding unsecured loans, which stood at $4.8 billion at the year's end, thereby addressing past community concerns about potential risks associated with this aspect of Tether's portfolio.
For the entire year of 2023, Tether declared a net profit of $6.2 billion. This financial strength was attributed to various sources, including $4 billion from U.S. Treasury bonds and other non-crypto investments. The firm's total assets under management included significant holdings in U.S. Treasuries, Bitcoin, gold, and venture capital investments.
Genesis Settles With the SEC
Bankrupt crypto lender Genesis reached a settlement agreement with the U.S. Securities and Exchange Commission (SEC) regarding a civil lawsuit, Bloomberg reported Thursday afternoon.
This lawsuit accused Genesis of violating securities regulations through its Gemini Earn program. Genesis, a subsidiary of Digital Currency Group, has agreed to pay a $21 million civil penalty to resolve these allegations. However, the payment of this penalty is contingent on the company's ability to fully repay its customers and other creditors in its Chapter 11 bankruptcy proceedings.
The settlement, pending approval by a bankruptcy judge, addresses claims that Genesis illegally raised funds from investors via the Gemini Earn program. This program, operated in collaboration with Gemini Trust Co., offered interest payments to customers for loaning their digital assets. The SEC had argued that this constituted an offering of unregistered securities. Both Genesis and Gemini have denied any wrongdoing, asserting that the Earn program was not a security. The program has been terminated since then.
Major Bitcoin Seizures in Europe
German police executed one of their largest cryptocurrency seizures, confiscating over €2.1 billion ($2.3 billion) worth of Bitcoin. This operation focused on dismantling an illegal, covert streaming service. The seizure at this scale was a major blow to digital piracy networks leveraging cryptocurrencies.
Concurrently, in the UK, the police made a significant seizure of nearly £1.8 billion ($2.2 billion) in Bitcoin, linked to an investment fraud scheme originating in China. This operation was part of a broader investigation that stretched across international borders, highlighting the increasing global efforts to track and seize digital assets connected to criminal activities.
Binance's Operational Shifts and Banking Partnerships
Binance, the largest cryptocurrency exchange in the world by volume, now permits larger traders to store assets with two external banks, possibly due to concerns arising from its recent $4.3 billion U.S. regulatory fine. This operational change comes as high-volume traders increasingly seek platforms with robust security and stability in a dynamic regulatory environment.
Binance has entered into partnerships with Sygnum Bank and FlowBank to custody these assets. These collaborations are geared towards enhancing the access and management of cryptocurrencies for users. Sygnum Bank specializes in digital asset banking, while FlowBank operates as an online bank in Switzerland.
Ripple Cofounder's Accounts Compromised in $113 Million Exploit
On Wednesday, Ripple suffered a significant security breach, with cofounder Chris Larsen confirming that his personal accounts were exploited. The hackers stole approximately $113 million. Larsen's acknowledgment of the unauthorized transfers has brought attention to the security vulnerabilities even high-profile individuals in the crypto industry can face.
MIM Stablecoin Depegs After Exploit
Abracadabra.money, a decentralized finance (DeFi) platform, suffered an exploit on its Ethereum-based Magic Internet Money (MIM) cauldrons, resulting in a loss of $6.5 million. This security breach led to the destabilization of MIM, causing it to lose its peg to the U.S. dollar.
The exploit was executed through a series of complex transactions that manipulated the price of the collateral in the Ethereum cauldrons, ultimately leading to the unauthorized withdrawal of funds. The immediate impact of this incident was a noticeable de-pegging of the MIM token from its intended 1:1 parity with the U.S. dollar. MIM went as low as $0.76 before it rebounded to $0.98.
Polygon Reduces Workforce by 19%
Polygon Labs, the development team behind the Polygon blockchain, announced a reduction of its workforce by 19% following a period of rapid expansion during the last cryptocurrency bull run. The layoffs come as the company adjusts to the current market environment and refocuses its strategy for sustainable growth.
This decision reflects a broader trend in the tech and crypto industries, where companies are reassessing their growth strategies and workforce needs in response to changing market conditions. For instance, this week fintech giant PayPal fired nearly 2,500 employees.
For the remaining employees of Polygon Labs, there was good news, however. Polygon concurrently announced that it was giving employees companywide a 15% raise and eliminating geographic differences in pay.