Large businesses spend a lot of money tracking their financial transactions – think accountants, financial analysts, consultants and corporate accounting software. Meanwhile, Sam Bankman-Fried used Microsoft Excel.
On January 17th, in another sloppy Excel spreadsheet, SBF revealed that FTX US was solvent. The Excel file allegedly showed customer balances, bank deposits and assets held in cold storage. “S&C forgot to include bank balances” of about $428 million, SBF said, referring to the former legal representative of FTX Sullivan & Cromwell. “Once you add them back, you get close to my previous balance sheet” of about $350 million, he said.
Crypto Biz this week examines the “herculean investigative effort” to identify billions in liquid FTX assets. We also bring you the latest on the ongoing Digital Currency Group saga.
FTX: It took a “Herculean investigative effort” to identify $5.5 billion in liquid assets.
The SBF was not the only one trying to uncover the remaining balances of FTX. The debtors of the bankrupt stock exchange were identified $5.5 billion in liquid assets, including $1.7 billion in cash, $3.5 billion in crypto assets, and approximately $300 million in securities. “We are making important progress in our efforts to maximize returns, and it took a lot of investigative effort from our team to uncover this preliminary information,” said FTX CEO John Ray. Before you get too excited, know that there is still a “substantial shortage of digital assets” according to FTX borrowers. That said, FTX users shouldn’t expect to be complete anytime soon.
Sharing the just released FTX Debtors press release: https://t.co/fcSs36nFmq
— FTX (@FTX_Official) January 17, 2023
Silvergate reports a net loss of $1 billion in the fourth quarter of 2022
The fallout from crypto winter continues to reverberate across the industry, with digital asset bank Silvergate reporting a massive A net loss of $1 billion in the fourth quarter. In a report released by the United States Securities and Exchange Commission, Silvergate posted client deposits of $7.3 billion in the fourth quarter, down from about $12 billion in the third quarter. Moody’s Investors Service downgraded Silvergate from Baa2 to Ba1 after learning of the news. That’s a spam status for those of you watching. It all starts to make sense why Silvergate laid off 40% of its workforce at the beginning of January.
Despite the recently reported 70% drawdown of digital asset client deposits at Silvergate, NYDIG continues to support their business, adding deposits and continuing to use their SEN product.
— NYDIG (@NYDIG) January 18, 2023
Digital Currency Group freezes dividends in an effort to preserve liquidity
Bad news surrounding Digital Currency Group, or DCG, continues to pile up after the capital markets firm informed investors that stop quarterly dividend payments indefinitely. It’s no secret that DCG is facing liquidity constraints associated with its Genesis Global Trading subsidiary. The problems surrounding Genesis were brought to the public by Gemini co-founder Cameron Winklevoss, who wrote a letter to the DCG board accused the company of orchestrating a “carefully crafted campaign of lies” to hide a huge hole in Genesis’ balance sheet. At last check it was estimated DCG was in debt to its creditors over $3 billion.
Hong Kong investment fund raises $500 million to support mass adoption of Web3
Month after month of “only down” in the crypto markets has left many of us weary about the future of the industry. But behind the scenes, venture capital continues to pour millions into promising cryptocurrency-focused use cases. This week, Hong Kong investment manager HashKey Capital announced a $500 million fund on support future adoption of Web3. The new FinTech Investment Fund III will primarily invest 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 Chief Investment Officer Xiao Xiao told Cointelegraph. “Many traditional institutions and internet giants are interested in cryptocurrencies. Some are learning how to participate in this paradigm shift.”
Before You Go: Is Bitcoin in a Bull Run or a Bull Trap?
Bitcoins (BTC) price has shot up more than 25% in the past week, marking the biggest seven-day gain in nearly two years. Investors naturally wonder if the bear market is over. Although there is a decent chance Bitcoin has bottomed out, I wouldn’t get too excited about an extended bull rally just yet. In this week Market reportI sat down with fellow analysts Marcel Pechman and Joe Hall to discuss the short and medium term outlook for BTC. You can watch the full replay below.
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