Bankruptcies and Price Pumps
Good morning. Today in the CT5 we catch up on the Celsius and 3AC bankruptcies, get a round of funding for a company bridging the gap between crypto and corporate treasuries, and learn about a new stETH rollout from Lido. All that and more today!
Market Update (as of 7:29am ET):
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Top 5:
1. Genesis files $1.2B claim against Three Arrows Capital. Time to check in with our friends over at 3AC... Crypto broker Genesis Global Trading has filed a $1.2 billion claim against the now defunct venture fund with court documents showing that Genesis loaned over $2 billion to the company. Genesis' parent company, Digital Currency Group, has assumed some of the firm's liabilities, but it remains unclear what portion still sits with the brokerage firm. Total debts of 3AC exceed $3 billion across 27 companies including Blockchain.com, Voyager, and others. Of the 27 companies, Genesis was by far the largest lender.
If DCG really is on the hook for $1.1 billion in unsecured 3AC claims, that would represent more money than the combined companies made *all time* through mid-2021.
— Ryan Selkis 🥷 (@twobitidiot) July 18, 2022
In that case, @GaryGensler is propping up DCG by blocking the spot ETF (thus restricting redemptions).
😂😂😂 pic.twitter.com/2vfcuokbaC
2. Celsius lays out mining-focused reorganization plan at first bankruptcy hearing. During Celsius' first bankruptcy hearing on Monday, attorneys for the company indicated that the firm had around 500,000 creditors that are owed a total of around $5 billion. That leaves a $1.2 billion hole in their balance sheet that the company says they can fill with profits from their bitcoin mining subsidiary, Celsius Mining. During the hearings Celsius’ attorneys claimed the company mines approximately 14.2 bitcoins per day and expects to mine around 10,100 bitcoins in 2022. At current prices that would generate ~$225 million in revenue aka nowhere close to the $1.2 billion needed. Restructuring lawyers commenting on the case believe Celsius is pitting retail customers versus sophisticated institutional investors in the conflict for assets and we all know who will win that battle.
3. Meow secures $22 million in Series A funding round. The company offers corporate treasurers a compliant bridge to earn up to 4% yield in crypto markets while also providing quick (3 business day) withdrawals. Meow has grown corporate assets under management to nearly $100 million in under 6 months and will use the fresh round of funding to develop new products with a specific focus on stablecoins. The funding round was led by Tiger Global with participation from FTX and QED.
"It's mostly been speculation to date, I think stablecoins are going to be pretty much the first use case that is not fully speculative, it is a superior payment rail.. the thing that allowed us to raise in this market was the fact that we had revenue"@arvanaghi @JoinMeow pic.twitter.com/VJHzsekQHE
— The Best Business Show (@TheBestBizzShow) July 18, 2022
4. Lido Finance will soon offer staked ether on layer 2 networks, proposes to sell LDO for DAI. Liquid staking firm Lido Finance announced on Monday plans to offer staked ether (stETH) on layer blockchains. In a blog post announcing the news, Lido said the new offering will provide, "staking with lower fees and access to a new suite of DeFi applications to amplify yields." There is currently no timeline in place for the rollout, but the company plans to first offer stETH on layer 2 networks Arbitrum and Optimism.
5. ETH is pumping, but is it just FTX... Some are speculating that the current price increase is the result of FTX unwinding short positions they used to hedge Celsius' stETH position. Â
After looking at a massive dump in ETH OI and BTC looking weak at range highs I’m very inclined to think this is a huge catalyst for our current ‘rally’. https://t.co/fmplyrZOvR
— Demetrik.eth (@CryptoDemetri) July 19, 2022
Updates and other stories:
- Scaramucci’s firm pauses investor redemptions for fund with bitcoin, ethereum exposure...Read More
- BlockFi offers employees buyouts to further reduce headcount...Read More
- Dubai's metaverse strategy plans to add $4 billion to economy by 2027...Read More
Top Sharers of the Crypto Top 5:
1. Donna Y. - Nashville, TN
2. Jake Y. - Greenville, SC
3. Forrest H. - Evansville, IN
External Resources:
1. Cryptopedia from Gemini - if you see a word, acronym, or phrase in this newsletter that you don't understand, there's a good chance you can find an explanation here
2. Crypto Explainer+ - intro level courses on Bitcoin, Ethereum, decentralized finance, NFTs, and more
3. Crypto Jobs! - looking for a new job? Check out this page from Anthony Pompliano with hundreds, if not thousands of listings
Disclaimer: The information contained in this newsletter shall not be understood or construed as financial advice. I am not an attorney, accountant, or financial advisor, nor am I holding myself out to be, and the information provided is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.