Genesis files for bankruptcy, FTX explores a reboot, and Bitzlato…

This Week’s Top Stories

Crypto lender Genesis files for Chapter 11 bankruptcy

FTX contagions continue to spread through the crypto industry, with Genesis Capital filing for bankruptcy protection in New York, estimating liabilities in the range of $1 billion to $10 billion, and assets at the same level. The company plans a “dual track process,” which will seek to “sell, raise capital, and/or equity transactions” and allow the business to “emerge under new ownership.” Genesis derivatives, spot trading, broker-dealer and hold business are not included in the process, according to the company. In an effort to maintain liquidity, parent company Genesis Digital Currency Group is suspending its dividend withdrawal.

Bitzlato and its founders face enforcement action from US authorities

United States authorities have taken enforcement action against crypto firm Bitzlato, seizing the company’s website and labeling the business a “major money laundering concern” linked to illegal Russian finance. As part of the case, FBI officials arrested Russian citizen Anatoly Legkodymov in Miami. The criminal complaint alleges that the company was a “significant financial source” for the Hydra darknet market, allowing users to launder funds, including from ransomware attacks.

The CEO of FTX said he is exploring rebooting the exchange

New FTX CEO John Ray, who was appointed before the bankruptcy proceedings, has set up a task force to reconsider FTX.com. He noted in the interview that everything is “on the table” when it comes to the future of FTX.com, including a potential path forward in terms of rebooting the exchange. In other headlines in the case, former FTX CEO Sam Bankman-Fried has been accused of using his influence in the crypto industry to inflate the price of some coins through a coordinated strategy with Alameda Research. The bankruptcy proceedings are facing challenges, as Alameda’s liquidators have incurred losses of at least $11.5 million since taking control of the trading accounts.

Iran and Russia want to issue a new stablecoin backed by gold

Iran’s Central Bank is reportedly working with the Russian government to issue a new gold-backed stablecoin. “Persian Gulf region tokens” will be a method of payment in foreign trade instead of fiat currencies like the United States dollar, Russian ruble or Iranian rial. The new cryptocurrency will operate in a special economic zone in Astrakhan, where Russia receives Iranian cargo shipments.

3AC, Coinflex founders collaborate to raise $25M for new claims trading exchange

Co-founders of collapsed crypto hedge fund Three Arrows Capital (3AC), Su Zhu and Kyle Davies, are trying to raise money for a new cryptocurrency exchange in partnership with Coinflex co-founders Mark Lamb and Sudhu Arumugam. According to the pitch deck, they want to raise $25 million. The new exchange will be called GTX, and will direct claims against bankrupt companies, allowing customers to use claims as collateral for trading. The initiative drew criticism from the crypto community.

Winners and Losers

At the end of the week, Bitcoin (BTC) that’s it $21,856Ether (ETH) at $1,621 and XRP at $0.40. The total market capitalization is at $1.00 trillion, according to CoinMarketCap.

Among the top 100 cryptocurrencies, the top three altcoins of the week were Frax Share (FXS) at 67.88%, Ivy (HBAR) at 45.32% and Convex Finance (CVX) at 44.01%.

The top three altcoin losers of the week were Gala (GALA) at -8.20%, Huobi Token (HT) at -6.34% and Trust Wallet Token (TWT) at -3.47%.

For more information on crypto prices, be sure to read Cointelegraph’s market analysis.

Most Memorable Quotes

“Crypto is becoming very interesting because we’re finally starting to see regulation taking place and I think, long term, that’s a good thing.”

Kevin O’Learyventure capital investors

“I really think he is [Sam Bankman-Fried] is the Mark Zuckerberg of crypto. I didn’t know he was Bernie Madoff. And that’s something I have to have. So I have.”

Anthony Scaramuccico-founder of SkyBridge Capital

“What I would like to see is to see the CFTC and other regulators provide more guidance this year and I hope we can see that more clearly in the United States.”

Caroline Phamcommissioner of the Commodity Futures Trading Commission (CFTC)

“Bitcoin has become the 24/7 VIX. It is the only trading vehicle today for large funds that want to get in and out of risk during weekend and overnight trading hours.

Jeff Dormanchief investment officer at Arca

“Great effort from [central bank] digital currency is not worth the cost and risk.

Tony Yatesformer senior adviser to the Bank of England

“I don’t think DeFi is meant to attack TradFi. DeFi should complement TradFi, at least initially.

Emin Gun Sirerco-founder and CEO of Ava Labs

Sunday Predictions

Bitcoin eyes $21.4K zone as analysts predict BTC price will chase gold

Bitcoin rose to new multi-month highs, with the BTC/USD pair maintaining support at $21,000, according to data from Cointelegraph Markets Pro and TradingView.

Prices moving through support or resistance affect sentiment, but some trades are also established, noting on-chain analytics source Material Indicators. “I see the lack of BTC liquidity below $18k and above $23k as a lack of sentiment for these levels at this time,” the company wrote on Twitter.

FUD from Sunday

Silvergate reported a net loss of $1B in the fourth quarter of 2022

Silvergate Bank has announced a net loss of $1 billion due to common shareholders in the fourth quarter of 2022. The digital asset bank experienced a significant outflow of deposits in the last quarter of 2022 mainly due to its relationship with FTX and Alameda Research. Silvergate is facing a class action lawsuit over its dealings with crypto companies. Among the actions taken by banks to maintain cash liquidity are wholesale financing and the sale of debt securities.

Nexo agrees to a $45M settlement with the SEC and the state through Get products

Crypto lender Nexo Capital has agreed to pay a $45 million fine to the US Securities and Exchange Commission and the North American Securities Administrators Association for failing to register the offer and sale of Earn Interest products. According to the company, the regulator did not report fraud or misleading business practices. On January 12, Bulgarian prosecutors began searching Nexo’s offices in Bulgaria for alleged involvement in a large-scale money laundering scheme, as well as violations of international sanctions against Russia.

CoinDesk could be seized because its parent company DCG is seizing funds

A potential sale of cryptocurrency media outlet CoinDesk is being considered by parent company Digital Currency Group. Investment bankers from Lazard help the company consider options, including a full or partial sale. DCG has reportedly received multiple offers exceeding $200 million for media companies in recent months. DCG’s venture capital portfolio includes 200 crypto-related businesses.

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