{"id":26327,"date":"2024-02-03T21:18:45","date_gmt":"2024-02-03T21:18:45","guid":{"rendered":"https:\/\/davidgerard.co.uk\/blockchain\/?p=26327"},"modified":"2024-02-04T18:51:46","modified_gmt":"2024-02-04T18:51:46","slug":"crypto-collapse-ftx-is-liquidating-and-getting-an-examiner-tethers-q4-attestation-more-etfs-coming","status":"publish","type":"post","link":"https:\/\/davidgerard.co.uk\/blockchain\/2024\/02\/03\/crypto-collapse-ftx-is-liquidating-and-getting-an-examiner-tethers-q4-attestation-more-etfs-coming\/","title":{"rendered":"Crypto collapse: FTX is liquidating and getting an examiner, Tether&#8217;s Q4 attestation, more ETFs coming"},"content":{"rendered":"<p><i>By <\/i><b><i>Amy Castor<\/i><\/b><i> and <\/i><b><i>David Gerard<\/i><\/b><\/p>\n<ul>\n<li>If you like this post, please <b><i>tell at least one other person<\/i><\/b>. It really helps!<\/li>\n<li>You can also send us money! Here\u2019s<a href=\"https:\/\/www.patreon.com\/amycastor\"> Amy\u2019s<\/a> Patreon and here\u2019s <a href=\"https:\/\/www.patreon.com\/davidgerard\/\">David\u2019s<\/a>. For casual tips, here\u2019s<a href=\"http:\/\/ko-fi.com\/amycastor\"> Amy\u2019s<\/a> Ko-Fi and here\u2019s<a href=\"https:\/\/ko-fi.com\/A1529D5\"> David\u2019s<\/a>.<\/li>\n<li>David has<a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2020\/11\/26\/get-signed-copies-of-libra-shrugged-and-attack-of-the-50-foot-blockchain\/\"> signed author copies of his books<\/a> for sale.<\/li>\n<li>We still have <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2021\/05\/bitcoin-it-cant-be-that-stupid.png\">\u201cBitcoin: It Can\u2019t Be That Stupid<\/a>\u201d stickers for patrons! Message one of us and ask!<\/li>\n<li>Sign up on<a href=\"https:\/\/amycastor.com\/\"> Amy\u2019s blog<\/a> to see every new post she makes as it goes up, and<a href=\"https:\/\/davidgerard.co.uk\/blockchain\/#byemail\"> click here and enter your email address<\/a> for every new post on David\u2019s blog as it goes up.<\/li>\n<\/ul>\n<blockquote><p>\u201cshe let me keep all the NFTs in the divorce because she&#8217;s stupid and still loves me and is obsessed with me\u201d<\/p>\n<p style=\"text-align: right;\">\u2014 <a href=\"https:\/\/twitter.com\/dril\/status\/1692405479241302350\">dril<\/a><\/p>\n<\/blockquote>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2024\/02\/03\/crypto-collapse-ftx-is-liquidating-and-getting-an-examiner-tethers-q4-attestation-more-etfs-coming\/larry-david-superbowl-ftx-commercial-screenshot\/\" rel=\"attachment wp-att-26328\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-26328\" src=\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2024\/02\/larry-david-superbowl-ftx-commercial-screenshot.jpg\" alt=\"\" width=\"510\" height=\"315\" srcset=\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2024\/02\/larry-david-superbowl-ftx-commercial-screenshot.jpg 680w, https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2024\/02\/larry-david-superbowl-ftx-commercial-screenshot-300x185.jpg 300w, https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2024\/02\/larry-david-superbowl-ftx-commercial-screenshot-348x215.jpg 348w\" sizes=\"auto, (max-width: 510px) 100vw, 510px\" \/><\/a><\/p>\n<p style=\"text-align: center;\"><small><i>And I&#8217;m never wrong about this stuff. Never.<\/i><\/small><\/p>\n<p>&nbsp;<\/p>\n<h3>Goodbye, FTX<\/h3>\n<p>FTX will not come back as a crypto exchange once more. It will liquidate. It expects to have \u201csufficient funds to pay all allowed customer and creditor claims in full,\u201d said FTX lawyer Andrew Dietderich in a hearing on January 31. [<a href=\"https:\/\/www.theverge.com\/2024\/1\/31\/24056991\/ftx-repay-customers-bankruptcy\"><i>Verge<\/i><\/a>]<\/p>\n<p>There may be some weasel wording here \u2014 FTX has said elsewhere that customers <i>won\u2019t<\/i> be fully repaid, with FTX.com customers bearing a greater percentage of the losses. [<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2024-01-27\/ftx-is-unloading-crypto-to-raise-cash-and-pay-back-customers?utm_source=website&amp;utm_medium=share&amp;utm_campaign=twitter\"><i>Bloomberg<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/Jj3vQ\"><i>archive<\/i><\/a>]<\/p>\n<p>The claim of payment \u201cin full\u201d is based on dollarized prices at the petition date \u2014 after the crypto market crashed in the days leading up to the filing. So creditors would get 100% of what they had as of the precise moment they officially lost it. Some creditors feel this is unfair because FTX caused the crash \u2014 but mostly because they want free money now that crypto prices are up again.<\/p>\n<p>We\u2019re also pretty sure that quite a lot of the assets in question are unsaleable illiquid altcoins. Crypto routinely hides a huge amount of terrible nonsense behind mark-to-market accounting.<\/p>\n<p>\u201cThis hopefully puts to bed the alternative narrative that this business was just fine all along,\u201d said Dietderich. \u201cIt was an irresponsible sham, created by a convicted felon. The costs and risks of creating a viable exchange from what Mr Bankman-Fried left in a dumpster were simply too high.\u201d<\/p>\n<p>FTX still has to sort through millions of claims, and creditors have to prove their claims are legitimate if they want to get their money back.<\/p>\n<h3>FTX gets an examiner<\/h3>\n<p>A year ago, Judge John Dorsey <a href=\"https:\/\/amycastor.com\/2023\/02\/15\/crypto-collapse-binance-usd-shut-down-celsius-insiders-sued-paxos-voyager-ftx\/\">denied<\/a> a request by the US Trustee to appoint an examiner for the bankruptcy of FTX. He said it would duplicate the efforts of John Jay Ray\u2019s team and cost creditors another $100 million or so, just what they didn\u2019t need.<\/p>\n<p>The Trustee appealed and a three-judge panel overturned the lower court\u2019s ruling \u2014 so FTX is getting an examiner. [<a href=\"https:\/\/storage.courtlistener.com\/recap\/gov.uscourts.ca3.120496\/gov.uscourts.ca3.120496.66.0.pdf\"><i>Opinion of the Court<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>The law says the court must appoint an examiner if the Trustee asks for one and the debtor\u2019s debt exceeds $5 million. The panel added that an examiner is necessary given Sullivan &amp; Cromwell\u2019s work for FTX before the bankruptcy. (They now work for John Jay Ray, who is managing the bankruptcy.)<\/p>\n<p>We can see the appeal court&#8217;s point. Ray has one job: to recover funds for the creditors. But the examiner can show what steps need to be put in place for a situation like this to never happen again.<\/p>\n<p>The appeal court argues that working out what happened is in the public\u2019s interest. The information would also be usable in future court cases. There were many people who were up to their necks in FTX but have not been charged. Yet.<\/p>\n<h3>More FTX fun<\/h3>\n<p>Sam\u2019s parents, Joe Bankman and Barbara Fried, are asking the court to dismiss <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2023\/07\/30\/john-jay-ray-sues-ftx-inner-circle-for-1-billion-prosecutors-want-sam-bankman-frieds-bail-revoked\/\">FTX\u2019s adversary lawsuit against them,<\/a> which claims the millions of dollars their son&#8217;s company sent to them were fraudulently transferred. They argue they were not company insiders since neither of them ever held an executive role at the company \u2014 and therefore the transfers were not fraudulent! \u2014\u00a0and that the $16 million property in the Bahamas was not their primary home. [<a href=\"https:\/\/www.reuters.com\/legal\/government\/sam-bankman-frieds-parents-move-dismiss-ftx-clawback-suit-2024-01-16\/\"><i>Reuters<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/JEp7T\"><i>archive<\/i><\/a>; <a href=\"https:\/\/storage.courtlistener.com\/recap\/gov.uscourts.deb.190993\/gov.uscourts.deb.190993.20.0.pdf\"><i>Doc 20<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>FTX was hacked for \u201c$400 million\u201d in crypto in November 2022, just after declaring Chapter 11 bankruptcy. The mystery of who did it may be solved \u2014 the DOJ has charged three people with a years-long SIM-swap phone hacking conspiracy that hit multiple companies. The indictment mentions only \u201cVictim Company-1\u201d \u2014 but Bloomberg says that\u2019s FTX. [<a href=\"https:\/\/arstechnica.com\/tech-policy\/2024\/01\/sim-swapping-ring-stole-400m-in-crypto-from-a-us-company-officials-allege\/\"><i>Ars Technica<\/i><\/a><i>; <\/i><a href=\"https:\/\/cdn.arstechnica.net\/wp-content\/uploads\/2024\/01\/USA-v-Powell-Order-on-Motion-for-Miscellaneous-Relief-1-25-2024.pdf\"><i>indictment<\/i><\/a><i>, PDF; <\/i><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2024-02-01\/ftx-s-missing-400-million-stolen-in-sim-swapping-hack-doj-says\"><i>Bloomberg<\/i><\/a><i>, <\/i><a href=\"http:\/\/archive.today\/2024.02.02-200736\/https:\/\/www.bloomberg.com\/news\/articles\/2024-02-01\/ftx-s-missing-400-million-stolen-in-sim-swapping-hack-doj-says\"><i>archive<\/i><\/a>]<\/p>\n<p>Over in the criminal case, Sam Bankman-Fried has hired a new lawyer, Marc Mukasey of Mukasey Young, in the hope of getting a <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2023\/11\/02\/crypto-collapse-bankman-fried-trial-draws-to-a-close-safemoon-arrested-fourth-us-bank-failure-was-crypto\/\">lighter sentence on March 28.<\/a> Mukasey helped get Trevor Milton, founder of electric truck fraud Nikola, a much lighter sentence of only four years instead of eleven. He\u2019s also a defense attorney for Celsius\u2019s Alex Mashinsky. [<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2024-01-10\/bankman-fried-shakes-up-team-hires-trevor-milton-lawyer-ahead-of-sentencing?embedded-checkout=true\"><i>Bloomberg<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/BwO2K\"><i>archive<\/i><\/a>]<\/p>\n<p>Larry David was not only foolish enough to do the FTX Superbowl ad because his \u201cfriends\u201d told him that crypto was good and solid stuff \u2014 he also took part of his fee in crypto. He regrets it a whole lot. [<a href=\"https:\/\/twitter.com\/APEntertainment\/status\/1752724671169012160\"><i>Twitter<\/i><\/a>]<\/p>\n<h3>News from chapter 11<\/h3>\n<p>Terraform Labs has filed for chapter 11 in a Delaware bankruptcy court to fend off likely penalties from <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2024\/01\/20\/crypto-collapse-sec-takes-on-terraform-and-coinbase-etf-fallout-continues-tether-is-for-crime\/\">the SEC winning summary judgment<\/a> on its claim that that <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/05\/10\/terras-stablecoin-does-a-2008-crisis-ust-crashes-and-takes-bitcoin-with-it\/\">TerraUSD and luna<\/a> were unregistered securities. Chapter 11 automatically stays payment of any judgment against Terraform. The company\u2019s liabilities and assets are both in the range of $100 million to $500 million. [<a href=\"https:\/\/storage.courtlistener.com\/recap\/gov.uscourts.deb.191957\/gov.uscourts.deb.191957.1.0.pdf\"><i>Filing<\/i><\/a><i>, PDF; first-day<\/i><a href=\"https:\/\/storage.courtlistener.com\/recap\/gov.uscourts.deb.191957\/gov.uscourts.deb.191957.18.0_12.pdf\"><i> motion<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>The SEC <a href=\"https:\/\/amycastor.com\/2023\/01\/13\/sec-sues-genesis-and-gemini-genesis-owes-3-billion-to-creditors\/\">sued Genesis Trading and the Gemini crypto exchange<\/a> in November over the Gemini Earn product, claiming it was an unregistered security. Genesis wants to settle with the SEC for a $21 million fine, which will become a general unsecured claim in the bankruptcy. The SEC\u2019s case against Gemini proceeds. [<a href=\"https:\/\/restructuring.ra.kroll.com\/genesis\/Home-DownloadPDF?id1=MzA1NjE5Mg==&amp;id2=-1\"><i>Doc 1220<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>Celsius Network is emerging from bankruptcy to distribute what funds remain to its creditors and shut down. Creditors will also get shares in the new bitcoin mining company Ionic \u2014 the Celsius <a href=\"https:\/\/amycastor.com\/2023\/05\/26\/crypto-collapse-fahrenheit-buys-celsius-dcg-may-be-broke-hong-kong-cracks-down-binance-commingling-how-bitfinex-was-hacked\/\">NewCo<\/a> discussed previously. Ionic will be managed by Hut 8. [<a href=\"https:\/\/www.businesswire.com\/news\/home\/20240131994097\/en\/\"><i>press release<\/i><\/a>]<\/p>\n<h3>ETFs<\/h3>\n<p>With spot bitcoin ETFs, the people who already stopped buying bitcoins have a new way not to buy bitcoins anymore.<\/p>\n<p>It\u2019s clear by now that ETFs were not the magic rocket fuel that would take bitcoin to the moon. And there is no evidence that the ETFs are attracting fresh liquidity to push up the price of bitcoin and let holders cash out.<\/p>\n<p>We love how Grayscale fought so hard to bring spot bitcoin ETFs to the US, and the first thing that happened was GBTC getting drained \u2014 $4.3 billion in outflows so far.<\/p>\n<p>FTX is partly to blame \u2014 it\u2019s dumped about $1 billion (22 million shares) of GBTC. We know that Genesis is also sitting on a pile of GBTC, which they\u2019ll probably need to dump at some point to cover the massive hole in their books. Sam Bankman-Fried is trashing bitcoin from his jail cell. [<a href=\"https:\/\/www.coindesk.com\/business\/2024\/01\/22\/ftx-sold-about-1b-of-grayscales-bitcoin-etf-explaining-much-of-outflow-sources\/\"><i>CoinDesk<\/i><\/a>]<\/p>\n<p>Grayscale is now trying to introduce a covered call ETF based on options on its Bitcoin Trust ETF (GBTC). [<a href=\"https:\/\/www.ft.com\/content\/f95a648e-3116-4652-bfc8-34624cce3a6d\"><i>FT<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/9i8CW\"><i>archive<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.sec.gov\/Archives\/edgar\/data\/1976672\/000168035924000022\/grysclebtcntrstcvrcl01112024.htm\"><i>Form N-1A<\/i><\/a>]<\/p>\n<p>Covered ETFs are designed to reduce risk. It involves selling a call option on the asset held by the ETF \u2014\u00a0in this case, bitcoin. By owning bitcoin or a bitcoin ETF, you&#8217;re \u201ccovered\u201d if the price of bitcoin rises and the call option expires in the money. [<a href=\"https:\/\/www.investopedia.com\/investing\/benefits-covered-call-etf\/\"><i>Investopedia<\/i><\/a>]<\/p>\n<p>Roundhill Investment has a Bitcoin Covered Call ETF (YBTC) that has already started trading. [<a href=\"https:\/\/www.ft.com\/content\/2e55cfb4-a682-487b-89a9-a8eb3e4a123f\"><i>FT<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/1zrnd\"><i>archive<\/i><\/a>]<\/p>\n<p>Bitcoin ETFs turn out to be good news for the CME bitcoin futures, which are cash-only bets that never touch a bitcoin. Traders use the CME futures to bet on the price and hedge that bet with ETF shares rather than having to touch a bitcoin themselves. [<a href=\"https:\/\/www.ft.com\/content\/6cdb22e9-f6a1-4032-9f40-90c6a9fbce52\"><i>FT<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/Zrizb\"><i>archive<\/i><\/a>]<\/p>\n<p>The bitcoin ETF market is cutthroat, thanks to the SEC <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2024\/01\/10\/sec-approves-bitcoin-spot-etfs-what-this-means-for-crypto\/\">approving 11 ETFs at the same time<\/a>. Invesco and Galaxy Asset Management have reduced the fee of their spot bitcoin ETF to 0.25% from 0.39%. They have also waived the fee to 0% for the first 6 months or $5 billion in asset). [<a href=\"https:\/\/www.prnewswire.com\/news-releases\/invesco-and-galaxy-drop-the-sponsor-fee-on-invesco-galaxy-bitcoin-etf-btco-302047120.html\"><i>Press release<\/i><\/a>]<\/p>\n<p>We talked about the risk of ETFs keeping <a href=\"https:\/\/amycastor.com\/2024\/01\/16\/you-wont-believe-the-21-million-reasons-bitcoin-etfs-are-dumb-as-heck-and-super-risky-oh-wait-of-course-you-will\/\">large piles of bitcoins at a custodian<\/a>. Valkyrie has added BitGo as a second custodian to mitigate this risk. [<a href=\"https:\/\/www.coindesk.com\/markets\/2024\/02\/02\/bitcoin-etf-provider-valkyrie-adds-bitgo-as-second-custodian-in-risk-mitigation-move\/\"><i>CoinDesk<\/i><\/a>]<\/p>\n<h3>Tether is in the money<\/h3>\n<p>Tether published their attestation for the quarter ending December 31. They report $3 billion in profit \u2014\u00a0 $1 billion in interest on US Treasuries and $1.85 billion from appreciation in their reserves of bitcoin and precious metals. So, $1 billion actual cash profit. [<a href=\"https:\/\/tether.to\/en\/tethers-2023-q4-attestation\/\"><i>Tether<\/i><\/a><i>, <\/i><a href=\"http:\/\/archive.today\/2024.02.03-140837\/https:\/\/tether.to\/en\/tethers-2023-q4-attestation\/\"><i>archive<\/i><\/a>]<\/p>\n<p>This is a snapshot of what Tether told their accountant, this time BDO Italia, about their assets on the last day of 2023. It is absolutely not a proper audit and it gives Tether lots of wiggle room to make things up, something they\u2019ve been <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2021\/02\/23\/new-york-settles-with-tether-a-wrist-slap-with-a-strong-leash\/\">extensively documented<\/a> as <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2021\/10\/29\/the-cftc-settlement-with-tether-and-bitfinex-42-5-million-dollars-in-fines\/\">doing<\/a> in the past.<\/p>\n<p>Tether has been <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2023\/12\/06\/bitcoin-goes-up-can-5-billion-unbacked-tethers-kickstart-a-fresh-crypto-bubble\/\">issuing tethers to its biggest customers<\/a> as loans, with the only backing being the loan itself \u2014 that is, they print the tethers out of thin air. No fresh actual dollars flow into the system this way.<\/p>\n<p>We\u2019re pretty sure that loans are how most of the recent tether issuance is coming into being \u2014 anyone with real dollars has been putting those into the ETFs.<\/p>\n<p>Tether claims they have now overcollateralized sufficiently \u2014 $4.8 billion in secured loans versus $5.4 billion of excess reserves \u2014 that the loans aren\u2019t at risk anymore:<\/p>\n<blockquote><p>Tether is proud to announce that it has achieved its goal of removing the risk of secured loans from the token reserves. While such secured loans are widely overcollateralized, Tether accumulated enough excess reserves to cover the entirety of the exposure. This is in response to the community\u2019s past expressed concerns about this part of the portfolio.<\/p><\/blockquote>\n<p>This has been read by a lot of people as Tether not having those loans at all now \u2014 but that\u2019s not what their very precise wording says.<\/p>\n<p>Who is breathing down Tether\u2019s neck that they need to reassure by issuing this statement? Surely not the \u201ccommunity.\u201d<\/p>\n<h3>It&#8217;s one AK, CZ, what could it cost, six hundred dollars?<\/h3>\n<p>The use case for crypto keeps being found \u2014 crypto for Hamas. OFAC\u2019s press release announcing a fifth round of sanctions on Hamas entities emphasizes the crypto angle. [<a href=\"https:\/\/home.treasury.gov\/news\/press-releases\/jy2036\"><i>Treasury<\/i><\/a>]<\/p>\n<p>In the wake of the October 7 Hamas attacks on Israel, three families of American victims are suing Binance, ex-CEO Changpeng Zhao, Iran, and Syria for financing the attacks. The filing accuses Binance and CZ of allowing Hamas to use the platform to conduct financial transactions and make payments: \u201cIncredibly, Binance went out of its way to protect users associated with Hamas and other terrorist groups from regulatory scrutiny, especially if they were \u2018VIP\u2019 users who generated huge profits for Binance.\u201d [<a href=\"https:\/\/www.semafor.com\/article\/01\/31\/2024\/three-families-of-october-7-victims-sue-iran-syria-binance-in-new-york\"><i>Semafor<\/i><\/a>]<\/p>\n<h3>Extreme bingo<\/h3>\n<p>It turns out that <a href=\"https:\/\/amycastor.com\/2022\/08\/04\/bitcoin-mining-in-the-crypto-crash-the-mining-companies-creative-accounting\/\">bitcoin mining stocks<\/a> are a bad investment. Stock short trader J Capital published a report on Hut 8, linking it to a penny stock ring. The stock (USBTC) has lost two-thirds of its price since Christmas. [<a href=\"https:\/\/www.jcapitalresearch.com\/index.html\"><i>J Capital<\/i><\/a><i>; <\/i><a href=\"https:\/\/protos.com\/struggling-bitcoin-miner-hut-8-links-to-penny-stock-ring-1\/\"><i>Protos<\/i><\/a>]<\/p>\n<p>The US Energy Information Administration is requiring US bitcoin miners to detail for them their energy consumption starting in February and going through to July 2024. Bitcoin in the US is already using as much energy as the state of Utah. [<a href=\"https:\/\/www.eia.gov\/todayinenergy\/detail.php?id=61364\"><em>EIA<\/em><\/a>]<\/p>\n<p>The International Energy Agency forecasts that global electricity demand from data centers, cryptocurrencies, and AI will more than double over the next three years, adding the equivalent of Germany\u2019s entire power usage. [<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2024-01-24\/cryptocurrency-ai-electricity-demand-seen-doubling-in-three-years\"><i>Bloomberg<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/Deoub\"><i>archive<\/i><\/a>]<\/p>\n<h3>More good news for bitcoin<\/h3>\n<p>OPNX was an exchange for trading distressed crypto debt that was <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2023\/02\/12\/crypto-collapse-unbanking-crypto-genesis-offers-dcg-shares-to-creditors-binance-suspends-us-dollar-transactions-sec-goes-after-staking\/\">set up<\/a> in early 2023 by the founders of the defunct crypto hedge fund Three Arrows Capital and the defunct crypto exchange <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/06\/29\/coinflex-gets-roger-verified\/\">CoinFLEX<\/a>. It\u2019s shutting down \u2014 users have until February 14 to get their funds off the platform. 3AC\u2019s Zhu Su is blaming the shutdown on FTX seeking full recovery of funds. Also, Dubai regulators <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2023\/08\/25\/crypto-collapse-tornado-cash-arrests-federal-reserve-shuts-down-farmington-bank-prime-trust-played-terra-luna\/\">didn\u2019t like OPNX.<\/a> Also, OPNX didn\u2019t really have users \u2014 the highest daily volume was $624,000. [<a href=\"https:\/\/www.coindesk.com\/markets\/2024\/02\/02\/opnx-founder-su-zhu-says-shutdown-comes-because-ftx-estate-claims-reached-recovery\/?utm_medium=social&amp;utm_content=editorial&amp;utm_source=twitter&amp;utm_term=organic&amp;utm_campaign=coindesk_main\"><i>CoinDesk<\/i><\/a>]<\/p>\n<p>Congresswoman Maxine Waters worries that Facebook is trying to <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/libra\/\">pull a Libra<\/a> again. Meta has filed five trademark applications related to digital assets services and blockchain technology. Waters has written a letter asking them to explain themselves and reassure Congress that they\u2019re not going to try to start a crypto again. [<a href=\"https:\/\/democrats-financialservices.house.gov\/uploadedfiles\/01.22.24_ltr_meta.tmapp.pdf\"><i>Letter<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>The US Department of Justice has filed securities fraud and wire fraud charges against Sam Lee, founder of the HyperVerse crypto-ish Ponzi scheme from Australia. The one that had the <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2024\/01\/20\/crypto-collapse-sec-takes-on-terraform-and-coinbase-etf-fallout-continues-tether-is-for-crime\/\">fake CEO.<\/a> Also charged were Rodney Burton and Brenda Chunga. Lee is at present safely in Dubai. [<a href=\"https:\/\/www.justice.gov\/opa\/pr\/three-individuals-charged-roles-189b-cryptocurrency-fraud-scheme\"><i>press release<\/i><\/a>]<\/p>\n<p>Coinbase has hired former UK Conservative Party chancellor George Osborne as an advisor. Hard to think of a better fit, really. [<a href=\"https:\/\/www.ft.com\/content\/7d6ed85d-de57-4332-bf10-656ae0e77b54\"><i>FT<\/i><\/a><i>, <\/i><a href=\"http:\/\/archive.today\/2024.01.31-113437\/https:\/\/www.ft.com\/content\/7d6ed85d-de57-4332-bf10-656ae0e77b54\"><i>archive<\/i><\/a>]<\/p>\n<br><br><div align=\"center\"><p><a href=\"https:\/\/www.patreon.com\/bePatron?u=8420236\"><img src=\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2021\/10\/become_a_patron_button.svg\" alt=\"Become a Patron!\" title=\"Become a Patron!\" width=217 height=51><\/a><br><p style=\"align:center;\" class=\"patreon-badge\"><i>Your subscriptions keep this site going. <a href=\"https:\/\/www.patreon.com\/bePatron?u=8420236\">Sign up today!<\/a><\/i><\/p><\/div>","protected":false},"excerpt":{"rendered":"<p>The people who already stopped buying bitcoins have a new way to not buy bitcoins any more.<\/p>\n","protected":false},"author":1,"featured_media":26328,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[3016,3710,3654,568,2450,282,288,1501,1275,1047,444,1798,1105,3093,652,2890,3719,1799,3717,3716,3701,2761,3684,3715,3718,3318,3315,3574,3713,1328,3712,3102,1717,3720,2326,3435,3714,3702,33,3050,2946,39,3711,3685],"class_list":["post-26327","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorised","tag-3ac","tag-andrew-dietderich","tag-barbara-fried","tag-binance","tag-bitgo","tag-cme","tag-coinbase","tag-coinflex","tag-cz","tag-etf","tag-facebook","tag-ftx","tag-galaxy-digital","tag-gbtc","tag-gemini","tag-genesis","tag-george-osborne","tag-grayscale","tag-hamas","tag-hut-8","tag-hyperverse","tag-iea","tag-invesco","tag-ionic","tag-j-capital","tag-john-dorsey","tag-john-jay-ray","tag-joseph-bankman","tag-larry-david","tag-libra","tag-marc-mukasey","tag-maxine-waters","tag-mining","tag-mukasey-young","tag-ofac","tag-opnx","tag-roundhill","tag-sam-lee","tag-sec","tag-su-zhu","tag-terra","tag-tether","tag-us-trustee","tag-valkyrie"],"jetpack_featured_media_url":"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2024\/02\/larry-david-superbowl-ftx-commercial-screenshot.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/26327","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/comments?post=26327"}],"version-history":[{"count":30,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/26327\/revisions"}],"predecessor-version":[{"id":26358,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/26327\/revisions\/26358"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/media\/26328"}],"wp:attachment":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/media?parent=26327"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/categories?post=26327"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/tags?post=26327"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}