Not What DCG Shareholders Wanted to Hear 😵
In today's edition: 💻 SBF's spreadsheet, 💵 DCG's dividends, 💰 FTX recovers assets, and more!
On the Pod…
How Crypto Bankruptcy Claims Buyers Will Profit From the Collapse of FTX
From 3AC to FTX (and possibly more to come), it’s boom times for those trading crypto bankruptcy claims. Thomas Braziel, founder and CEO of 507 Capital, gives a crash course on bankruptcy law, offering the latest updates on the FTX, Celsius, and Three Arrows Capital cases. Plus, insight on how 2023 could finally be the year Mt. Gox creditors get (some) closure.
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What’s Poppin’?
SBF Says Excel Spreadsheet Proves FTX US Is Solvent
by Samyuktha Sriram
Former FTX CEO Sam Bankman-Fried claims that information shared by Sullivan & Cromwell (S&C) about a shortfall of funds at FTX US is inherently false.
DCG Suspends Dividends to Preserve Liquidity
Major crypto conglomerate Digital Currency Group told shareholders that the firm would be suspending quarterly dividend payments until further notice, CoinDesk reported on Tuesday.
“In response to the current market environment, DCG has been focused on strengthening our balance sheet by reducing operating expenses and preserving liquidity,” said the company in a letter to shareholders.
The move to suspend dividends is the latest in a series of cash-conserving steps from DCG amid the ongoing liquidity crisis at the lending unit of its subsidiary Genesis.
Earlier this month, DCG shut down its $3.5 billion wealth management division and was said to be looking into offloading a part of its $500 million venture portfolio.
196 Congress Members Took Cash From SBF: Report
A report from CoinDesk revealed that 196 members of the new Congress took cash from former FTX CEO Sam Bankman-Fried and other senior executives at the now-bankrupt crypto exchange. The recipients include Speaker of the House Kevin McCarthy and Senate Majority Leader Chuck Schumer.
Many of these politicians are still trying to get rid of these contributions, with many opting to donate to charities and other organizations.
Bankman-Fried faces charges related to campaign finance violations, in addition to a host of other charges related to fraud and conspiracy.
FTX Recovers $5.5B Liquid Assets
Bankrupt crypto exchange FTX has identified $5.5 billion worth of liquid assets, according to information shared by the firm’s liquidators on Tuesday. The figure presented includes $1.7 billion in cash, $3.5 billion in cryptocurrencies and $300 million in securities.
However, liquidators also revealed that they had found a “substantial shortfall of digital assets” in both FTX International and FTX US.
The lack of optimism for recovering funds is evidenced by the market for bankruptcy claims on FTX’s crypto deposits. According to data from XClaim, FTX claims are selling for 15.5% of the face value of account balances.
As one FTX creditor pointed out, more than half a billion dollars of the assets is in FTT, which, strangely, is not included in the category of illiquid assets.
Polygon Completes Hard Fork
Ethereum Layer 2 scaling solution Polygon successfully completed a hard fork at 10:45 AM UTC on Tuesday.
The network ushered in a software upgrade that would reduce the severity of gas spikes during high-demand periods on the blockchain, and address chain “reorgs” – a situation where a node temporarily creates a new version of the chain.
The changes were proposed in a governance forum last month, which saw an 87% approval from Polygon validator teams. However, only 15 votes were cast for the proposals to take effect, raising centralization concerns among industry proponents.
Gavin Wood Announces Polkadot XCM v3 Merge
Polkadot founder Gavin Wood announced on Tuesday that XCM version 3 was successfully merged after 15 months in development. XCM is a message format (not protocol) that works not only cross-chain but cross-consensus, giving Polkadot’s signature parachains the ability to communicate directly, without relying on blockchain bridges.
“This enables bridges, cross-chain locking, exchanges, NFTs, conditionals, context-tracking and more,” said Wood on Twitter.
In October, Wood resigned from his role as CEO of Parity Technologies, the entity behind Polkadot, saying he would be focusing on his role as a developer, in order to make the blockchain more relevant to the public.
On Unchained Premium
Why Did Regulators Fine Coinbase $100M?
Find out why the popular narrative surrounding the $100 million settlement between Coinbase and NYDFS over compliance issues may not be entirely accurate, as Competitive Compliance founder Yana Afanasieva debunks the misconceptions.
In Other News…✍️✍️✍️
Electric Capital released its annual developer report, showing a 5% increase in the number of monthly active developers since last year.
The FTX Debtors group found $1.6 billion worth of digital assets linked to FTX.com and $181 million associated with FTX US in their efforts to recover funds from the bankrupt exchange and its subsidiary companies.
In response to ongoing volatility in the market, OSL, a digital assets platform backed by Fidelity International, is taking steps to reduce expenses by approximately one-third, but did not disclose the number of layoffs.
An anonymous NFT trader, who goes by the pseudonym "Pokeee," made a purchase worth nearly $1 million to acquire 69 NFTs from the DeGods project.
Data from BeaconScan shows that the number of validators for Ethereum (ETH) reached a new milestone of 500,000. This comes before the planned Shanghai upgrade for the Ethereum network in March.
The Securities and Exchange Commission (SEC) initiated a record number of enforcement actions related to cryptocurrency in 2022, a 50% increase from the previous year.
Today in Crypto Adoption...
The Solana Foundation and Ripple are joining forces with Eqo Networks, the Global Blockchain Business Council (GBBC), and BxCi to accelerate the implementation of cryptocurrency-based solutions to combat climate change.
National Geographic launched its first set of NFTs on the Polygon network, but the move was met with discontent on social media.
Seoul, the capital of South Korea, is venturing into the metaverse by creating a virtual replica of the city with the aim of enhancing public services.
The $$$ Corner…
HashKey Capital, a crypto-focused asset manager, raised $500 million for investments in the web3 ecosystem.
Latin American Web3 infrastructure provider Parfin garnered $15 million in a seed investment round.
Obol Labs closed a $12.5 Series A funding round to make proof-of-stake blockchains more secure through its “distributed validator technology”.
What Do You Meme
📈 Your Market Update 📉
BTC is up .2%, trading at $21,208
ETH is up .63%, trading at $1,576
BTC dominance: 39.73%
Crypto market cap: $1.03 trillion
*All data as of today, 5 am ET
Recommended Reads
Li Jin on progressive decentralization for media:
Marisa Tashman Coppel on crypto litigations
“They Lost Millions To Crypto Scammers. This Prosecutor Is Helping Them Get It Back” by Forbes’ Cyrus Farivar
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