SEC’s Gary Gensler Strikes Again 😱

In today's edition: 😲 SEC charges Gemini and Genesis, 👀 SBF launches a Substack newsletter, 🕵️ a report on Genesis' liabilities, 👩‍💻 Polygon's hard fork, and more!

Jan 13, 2023

DCG's Dilemma: Should It Sell Its GBTC Holdings to Repay Gemini?

Gemini has accused Digital Currency Group CEO Barry Silbert of fraud after allegedly misrepresenting the financials of his company. The accusations follow a dispute over the return of $900 million in assets owed to Gemini Earn’s users.

Karim Dandashy, CFA and portfolio manager at XBTO Group, discusses everything about the ongoing drama between Genesis, its parent company DCG, and Gemini.

Show highlights:

the fraud accusations against DCG CEO Barry Silbert
all the details disclosed in Barry's response
whether Genesis will file for chapter 11 bankruptcy protection
the meaning of the $1.1 billion promissory note being not callable
the EDNY and SEC investigation on transfers between DCG and a subsidiary – potentially Genesis
whether the 1% interest rate charged for the loan was suitable considering the nature of Genesis' business
whether DCG could sell its venture investments to plug the hole
why Bitvavo rejected an offer from DCG to return 70% of the $300 million owed to them
what Karim would do if he was leading DCG

Listen Now!

What’s Poppin’?

SEC Charges Gemini and Genesis With Sale of Unregistered Securities

by Samyuktha Sriram

The SEC has alleged that both Gemini and Genesis sold unregistered securities through the Gemini Earn product in a lawsuit filed on Thursday.

SBF Claims FTX Had $8B Before Bankruptcy, Says CZ’s Tweets Were a ‘Targeted Attack’ on Alameda

by Samyuktha Sriram

Sam Bankman-Fried alleged that a tweet from Binance’s CEO was the main reason behind Alameda and FTX’s insolvency.

Crypto Lender Genesis Owes Over $3B: Report

by Samyuktha Sriram

Embattled crypto lender Genesis owes creditors over $3 billion, according to people familiar with the matter.

Polygon Plans Hard Fork for Jan. 17 to Prevent Gas Fee Spikes and Reorgs

by Samyuktha Sriram

The Polygon blockchain will undergo a hard fork next week, aimed at reducing gas fee spikes and chain reorgs.

On Unchained Premium

Why Crypto Twitter May Be Wrong About FTX's Business

Sunil Kavuri, an FTX creditor with a financial background, talks about the valuation of FTX, the lawsuit he filed against the exchange, and much more.

Watch Now!

In Other News…✍️✍️✍️

Judge John Dorsey of the Delaware Bankruptcy Court approved the sale of four FTX units, including derivatives arm LedgerX and stock-clearing platform Embed.
Users of Nexo withdrew massive amounts of assets from the platform following reports that the exchange was being investigated for fraud.
Creditors of bankrupt crypto lender Hodlnaut rejected the company’s restructuring plan as they seek liquidation.
Liquidators of Alameda Research lost $72,000 in crypto after being liquidated on DeFi lending protocol Aave.
After the layoffs announcement, the S&P downgraded Coinbase’s debt to BB-. Meanwhile, Ark Invest scooped more shares in the company. Also, Coinbase will terminate its operations in Japan.
Crypto.com (disclosure: sponsor of Unchained) announced the reduction of 20% of its workforce citing “ economic headwinds and unforeseeable industry events.”
Wyre announced new funding and dropped the withdrawal limits it had imposed last week.
The Bank of International Settlements (BIS) published a report suggesting three policy approaches to regulate crypto.

The $$$ Corner…

CyberX, a crypto market maker, raised $15 million to expand its teams in Asia and North America.
Web3 platform Quantum Temple garnered $2 million in a pre-seed funding round led by Borderless Capital.
Coinsquare and WonderFi, two Canadian crypto exchanges, are reportedly in advanced talks for a merger deal.