Large corporate businesses spend a lot of money tracking financial transactions – think accountants, financial analysts, consultants and enterprise-class accounting software. Sam Bankman-Fried, meanwhile, uses Microsoft Excel.
On January 17, in another poor Excel spreadsheet, SBF revealed that FTX US was solvent. The Excel file purportedly shows customer balances, bank deposits and assets held in cold storage. “S&C forgot to include the bank balance” of about $428 million, SBF said, referring to FTX’s former legal counsel, Sullivan & Cromwell. “Once you add it back, you’re going to get into the neighborhood of the previous balance sheet” of about $350 million, he said.
Crypto Biz this week delved into the “Herculean investigative effort” to identify billions in liquid FTX assets. We also give you the latest on the Digital Currency Group saga.
FTX: It took a ‘Herculean investigative effort’ to identify $5.5B in liquid assets
SBF is not the only one looking for remaining FTX balances. The bankruptcy exchange has identified $5.5 billion in liquid assets, including $1.7 billion in cash, $3.5 billion in crypto assets and around $300 million in securities. “We are making significant progress in our efforts to expand the recovery, and it took a Herculean investigative effort from our team to uncover this initial information,” said FTX CEO John Ray. Before getting too excited, know that there is still a “substantial lack of digital assets,” according to FTX’s debt. This means that FTX users can’t expect it to finish quickly.
View the recently published FTX Debtors press release: https://t.co/fcSs36nFmq
– FTX (@FTX_Official) January 17, 2023
Silvergate reported a net loss of $1B in the fourth quarter of 2022
The fallout from the crypto future continues to reverberate across the industry, with digital asset bank Silvergate reporting a net loss of $1 billion in the fourth quarter. In a report published by the United States Securities and Exchange Commission, Silvergate announced $7.3 billion in customer deposits in Q4, down from approximately $12 billion in the third quarter. After receiving the news, credit rating agency Moody’s Investors Service downgraded Silvergate from Baa2 to Ba1. That’s junk status for those of you keeping track. All of this starts to make sense of why Silvergate laid off 40% of its staff in early January.
Despite a 70% drawdown in digital asset client deposits at Silvergate, NYDIG continues to support its business, increase deposits and continue to use SEN products.
– NICE (@NICE) January 18, 2023
Digital Currency Group waives dividends to maintain liquidity
The bad news surrounding Digital Currency Group, or DCG, continues to rise after the capital markets firm informed investors that it will end its monthly dividend payments indefinitely. It is no secret that DCG is facing liquidity constraints related to its Genesis Global Trading subsidiary. Genesis environmental problems have been dragged out in public by Gemini co-founder Cameron Winklevoss, who wrote a letter to DCG’s Board accusing the company of orchestrating a “campaign carefully made of lies” to hide a massive hole in Genesis’ balance sheet. At the end of the check, it was estimated that DCG owed more than $3 billion.
Hong Kong investment fund raises $500M to push mass adoption on Web3
The month after the “down just” in the crypto market has left many of us jaded about the future of the industry. But behind the scenes, venture capital continues to pour millions into promising crypto-focused use cases. This week, Hong Kong investment manager HashKey Capital announced a $500 million fund to support the future of Web3 adoption. The new FinTech III Investment Fund will invest mainly in projects at the intersection of blockchain infrastructure, tools and applications that can use Web3 technology. “Web3 is growing too fast to be ignored,” HashKey investment director Xiao Xiao told Cointelegraph. “Many traditional institutions and internet giants are interested in crypto. Some are learning how to participate in this paradigm shift.
Before you go: Is Bitcoin in a bull run or a bull trap?
The price of Bitcoin (BTC) has surged more than 25% over the past week, marking its biggest seven-day rally in nearly two years. Of course, investors are asking whether the bear market is over. Even though there is a decent chance that Bitcoin has gone down, I wouldn’t get too excited about a long bull rally. In this week Market Report, I sat down with fellow analysts Marcel Pechman and Joe Hall to discuss BTC’s short and medium-term outlook. You can watch the full replay below.
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