Large companies spend a lot of money keeping track of their financial operations. Think accountants, financial analysts, consultants, and business accounting software. Sam Bankman-Fried, for his part, used Microsoft Excel.
On January 17, in another sloppy Excel spreadsheet, SBF revealed that FTX US was creditworthy. The Excel file allegedly showed customer balances, bank deposits, and assets in cold storage. “S&C forgot to include bank balances” of about $428 million, SBF said, referring to former FTX legal counsel, Sullivan & Cromwell. “Once you add them back, you get to the neighborhood of my previous balance” of about $350 million, she said.
This week’s Crypto Biz explores the “titanic research effort” to identify billions in liquid FTX assets. We also bring you the latest on what’s happening with Digital Currency Group.
FTX: It took a “tiganic investigative effort” to identify $5.5 billion in liquid assets
SBF has not been the only one trying to unearth FTX’s remaining balances. bankrupt stock market debtors have identified USD 5.5 billion in liquid assets, including $1.7 billion in cash, $3.5 billion in crypto assets, and about $300 million in securities. “We are making significant progress in our efforts to maximize recoveries, and it has taken a Herculean investigative effort by our team to uncover this preliminary information,” said FTX CEO John Ray. Before you get too excited, know that there continues to be a “substantial digital asset shortfall,” according to FTX debtors. This means that FTX users should not expect to be compensated any time soon.
Sharing the FTX Debtors’ press release just issued: https://t.co/fcSs36nFmq
—FTX (@FTX_Official) January 17, 2023
Silvergate reports $1B net loss in the fourth quarter of 2022 Silvergate reports a $1B net loss 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 $1 billion net loss in the fourth quarter. In a report published by the United States Securities and Exchange Commission, Silvergate disclosed $7.3 billion of customer deposits in Q4, down from roughly $12 billion in the third quarter. After getting wind of the news, credit rating agency Moody’s Investors Service downgraded Silvergate’s rating from Baa2 to Ba1. That’s junk status for those of you keeping track. It’s all starting to make sense why Silvergate laid off 40% of its staff in early January.
The fallout from the bear market continues to reverberate across the industry, and digital asset bank Silvergate has posted a whopping $1 billion net loss in the fourth quarter. In a report published by the US Securities and Exchange Commission, Silvergate disclosed customer deposits of $7.3 billion in the fourth quarter, up from approximately $12 billion in the third quarter. Following the news, ratings agency Moody’s Investors Service downgraded Silvergate’s rating to Ba1 from Baa2. That is, the rating “Scrap” for those who keep score. It all starts to make sense because Silvergate laid off 40% of its staff in early January.
Despite the recently reported 70% drawdown in digital asset client deposits at Silvergate, NYDIG remains supportive of their business, adding deposits and continuing to utilize their SEN product.
—NYDIG (@NYDIG) January 18, 2023
Digital Currency Group suspends dividends to preserve liquidity
The bad news around Digital Currency Group, or DCG, continues to mount after the capital markets firm inform investors that it would suspend quarterly dividend payments indefinitely. It’s no secret that DCG is facing liquidity problems related to its subsidiary Genesis Global Trading. Gemini co-founder Cameron Winklevoss has brought to light the issues surrounding Genesis and has written a letter to the DCG board accusing the company of orchestrating “a carefully crafted campaign of lies” to hide the gaping hole in Genesis’s balance sheet. According to the latest estimates, DCG owed its creditors more than USD 3,000 million.
Hong Kong investment fund raises $500 million to drive mass adoption of Web 3.0
Month after month of “only dips” in the cryptocurrency markets has left many of us jaded about the future of the industry. But behind the scenes, VCs are still pouring millions into promising cryptocurrency-centric use cases. This week, Hong Kong investment manager, HashKey Capital announced a $500 million fund to Support the future of Web 3.0 adoption. The new FinTech Investment Fund III will invest primarily in projects at the intersection of blockchain infrastructure, tools and applications that can take advantage of Web 3.0 technology. “Web 3.0 is growing too fast to be ignored,” Xiao Xiao, chief investment officer at HashKey, told Cointelegraph. “Many traditional institutions and internet giants are interested in cryptocurrencies. Some are learning to participate in this paradigm shift.”
Before you go: is Bitcoin in a bull run, or will the current rally be another bull trap?
The price of Bitcoin (BTC) has soared more than 25% over the past week, marking its biggest seven-day rise in nearly two years. Investors are naturally wondering if the bear market is over. Although there is a good chance that Bitcoin has bottomed out, I would not get too excited about a long rally to the upside. in the episode of The Market Report Earlier this week, I sat down with fellow analysts Marcel Pechman and Joseph Hall to discuss the short- and medium-term outlook for BTC. You can watch the full episode here.
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