Remember when Sam Bankman-Fried admitted to being a major donor to the Democratic and Republican parties? Well, the recipients of the tainted money have been formally requested to return the funds to FTX’s creditors. Until now, we know of three prominent Democratic groups – the DNC, the Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee – who have returned the donations linked to Bankman-Fried in December 2022. Will the rest do the same?
As FTX tries to get its money back, Digital Currency Group and its bankrupt affiliate Genesis Global Trading have agreed to a restructuring plan. The good news is that Genesis account holders will get most of their money back if the deal goes through.
This week’s Crypto Biz takes a look at familiar stories surrounding FTX and the Digital Currency Group and discusses the failure of cryptocurrencies to gain public trust.
FTX wants to recover political donations before the end of February
The rise and fall of Sam Bankman-Fried was embroiled in extreme controversy after it came to light that the FTX founder was a significant donor to the Democratic and Republican parties. Now that bankrupt FTX is recovering cash and liquid cryptocurrency, the company’s new management wants to recover all political donations from Bankman-Fried and his cronies. “The FTX Debtors are sending confidential messages to political figures, political action funds, and other recipients of contributions or other payments that were made by or at the direction of the FTX Debtors, Samuel Bankman-Fried, or other officers or directors of the FTX debtors,” FTX’s attorney wrote; Andy Dietrich. “These recipients are requested to return such funds to the FTX Debtors by February 28, 2023.”
Research suggests that the price of Bitcoin was more closely linked to FTX developments than macro events throughout the final quarter of 2022. https://t.co/X2NZnbMUsU
— Cointelegraph (@Cointelegraph) February 10, 2023
Grayscale products were a hot commodity during the 2021 bull market. Now even the owner of Grayscale is selling shares to preserve capital and liquidity amid the bear market. Citing US securities records, the Financial Times reported on February 7 that Digital Currency Group (DCG) was selling shares of various Grayscale products, including the Ether investment fund, possibly to prevent a further liquidity crisis at the holding company. Digital Currency Group confirmed the sale but attributed it to an “ongoing portfolio rebalancing.” DCG’s financial problems are well known by now. Much of it is derived from its subsidiary Genesis, which filed for bankruptcy on January 19supposedly owing USD 3,000 million to its creditors.
Genesis creditors expect to recover 80% of the capital with the proposed restructuring plan
Speaking of Genesis, creditors can expect to get 80% of their money back, but only if the proposed new restructuring plan runs smoothly. On February 6, Genesis announced that it had reached an “agreement in principle” with DCG and its creditors, which would ultimately pave the way for clients to recover most of their deposits. Under the proposed agreement, DCG will exchange a promissory note of USD 1,100 million due 2023 for convertible preferred shares and will refinance existing loans to release USD 526 million. The Winklevoss twins’ Gemini exchange also will contribute USD 100 million to Gemini Earn users whose funds are frozen with Genesis. Even if everything goes according to plan, the rThe relationship between Gemini and DCG seems irrevocably broken.
What’s waiting for Genesis’ creditors after its bankruptcy? https://t.co/NuEqD1CBJN
— Cointelegraph (@Cointelegraph) February 9, 2023
Crypto Ad Deals for Super Bowl LVII Failed After FTX Collapse
Don’t expect a crypto Hail Mary during the Super Bowl this weekend, as the NFL has reportedly scrapped any plans to advertise the industry on game day. According to a report from the Associated Press, the league was considering running four crypto-focused commercials during the Super Bowl. Crypto will now get “zero representation” during the big game because of all the bad press surrounding the industry. It seems like a million years ago, but Super Bowl LVI in 2022 featured commercials from FTX, eToro, Crypto.com and Coinbase. Even comedian Larry David got suckered in to advertise for FTX. He’s now facing a class-action lawsuit for allegedly pumping the crypto exchange without due diligence.
Don’t expect a crypto Hail Mary during this weekend’s Super Bowl, as the NFL has scrapped any plans to publicize the sector on match day. According to an Associated Press story, the league was considering airing four cryptocurrency-focused ads during the Super Bowl. Crypto will now have “zero representation” during the big game due to all the bad press surrounding the industry. It seems like a million years ago, but Super Bowl LVI in 2022 featured announcements from FTX, eToro, Crypto.com, and Coinbase. Even comedian Larry David got sucked into promoting FTX’s services. He is now facing a class action lawsuit for allegedly endorsing the exchange without due diligence.
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