Texas Test for Bitcoin Miners

Good morning. The 3AC drama continues with shots fired from both sides, another crypto lender stumbles, and the Texas power grid is testing its limits. All that and more today!

Market Update (as of 8:46am ET):

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Top 5:

1. 3AC Co-founders remain silent, creditors go to court. Su Zhu and Kyle Davies are not currently cooperating in 3AC liquidation proceedings leaving creditors scrambling to locate and freeze the firm's assets. In court filings, both founders were listed as attending a hearing via Zoom with both video and audio turned off and all questions fielded by their legal representatives. Christopher Farmer, a managing director at restructuring firm Teneo indicated that the 3AC offices in Singapore appear vacated and that Zhu is rumored to be selling property valued at around $49 million. Creditors worry that the liquid nature of the firm's assets (cash, cryptocurrencies, NFTs) mean they could be easily transferred before frozen by the court. Lawyers are currently pushing to have the co-founders list their assets — including wallets, bank accounts, derivatives contracts, securities, and other company records. A court hearing is scheduled for today in New York. Zhu Su fired back early this morning with the below tweet.

2. Vauld issues letter to its creditors, disclosing $70 million shortfall. In a letter issued to creditors on Monday, the crypto lender disclosed assets of $330 million and liabilities of $400 million and cited exposure to the Terra collapse and the general market downturn as contributing factors. The Singapore based company halted withdrawals on July 4th and the following day rival Nexo signed a term sheet for a potential acquisition. While the deal is undergoing due diligence, Vauld is keeping other plans to make customers whole. The company is backed by Peter Thiel's Valar Ventures and Coinbase Ventures.  

3. As Texas grid operator calls for energy conservation, some bitcoin miners paused operations. High temperatures in Texas are driving high energy consumption and the power grid operator, Electric Reliability Council of Texas (ERCOT), has asked that residents and individuals conserve power where possible. In response to this request some bitcoin miners have ceased operations including Argos, Riot, and Core Scientific. Temperatures in Dallas and other parts of Texas will exceed 100°F for much of the rest of the week. ERCOT estimates that power demand will reach 79,000 megawatts and that the grid's capacity will be slightly above 80,000 megawatts.

4. Celsius reclaims $172M collateral from Aave, Compound. Celsius continues to pay down debts on DeFi platforms Aave and Compound in order to reclaim collateral. Over the past several days $95 million of debt has been paid down to reclaim $172 million in collateral from Aave and Compound. The firm still owes $140 million to Aave and Compound, but it appears they are on their way to reclaiming all collateral as part of restructuring efforts. Customer withdrawals have been halted since June 12, and it's unclear if restructuring will result in customers being made whole.

5. Messari Crypto Theses 2022. A thread summarizing the full Messari Crypto Theses published earlier this year. It's a very concise thread on the 165-page report which can be found here.

Updates and other stories:
- Uniswap user loses $8M worth of ether in phishing attack...Read More
- BlockFi CEO doesn’t want to be compared to Voyager, Celsius...Read More
- Compass Mining recovers machines from hosting provider following court order...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.