FTX creditors list, BlockFi $1.2B exposure and new Celsius token: Hodler’s Digest, Jan. 22-28


Top Stories This Week

FTX creditor list shows airlines, charities and tech firms caught in collapse

The complete list of creditors owed money by the bankrupt cryptocurrency exchange FTX has been released, revealing a wide range of global companies. Among the potential creditors are airlines, hotels, charities, banks, venture capital companies, media outlets and crypto companies, along with United States and international government agencies. According to another headline regarding the FTX scandal, U.S. federal prosecutors allege that Sam Bankman-Fried invested $400 million in the venture capital firm Modulo Capital with money from the FTX’s customers. Investigators allege that Modulo was likely built with criminal proceeds or misappropriated funds. Lawyer costs in the case are estimated to reach hundreds of millions of dollars before the firm’s bankruptcy investigation is over.

BlockFi uncensored financials reportedly shows $1.2B FTX exposure

Bankrupt crypto lending firm BlockFi uploaded uncensored financials by mistake, revealing $1.2 billion in assets tied up with bankrupt exchange FTX and defunct trading firm Alameda Research. The unredacted filings show that, as of Jan. 14, BlockFi had $415.9 million worth of assets linked to FTX and a whopping $831.3 million in loans to Alameda. BlockFi filed for Chapter 11 bankruptcy on Nov. 28, citing the collapse of FTX just weeks earlier as the cause of its financial troubles.

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New ‘Celsius token’ may be used to repay creditors

Bankrupt crypto lending firm Celsius may issue its own token to repay creditors. In a court hearing, Celsius attorney Ross M. Kwasteniet said the firm is negotiating with its creditors on how to relaunch the platform and adequately pay them back. If approved by creditors and the court, the relaunched version would be “a publicly-traded company that is properly licensed,” which is expected to provide creditors with more money than by simply liquidating  the company.

Binance holds token collateral and user funds on same wallet by ‘mistake’

Cryptocurrency exchange Binance admitted to mistakenly storing some customer funds in the same wallet with its collateral for Binance-minted tokens, or B-Tokens. The exchange already started the process of transferring the assets to dedicated collateral wallets, and stressed that B-Tokens are always fully collateralized and backed 1:1. Binance previously said that its corporate holdings were recorded in separate accounts and should not form part of the proof-of-reserves calculations.

Genesis creditors file securities lawsuit against Barry Silbert and DCG

Crypto conglomerate Digital Currency Group (DCG) is facing more legal issues following the filing of a new class action lawsuit against its subsidiary Genesis Capital. A group of Genesis creditors filed a lawsuit against DCG and its CEO Barry Silbert, alleging violations of securities laws by executing lending agreements with securities without qualifying for an exemption from registration under the federal laws. Genesis filed for Chapter 11 bankruptcy on Jan. 19, and it expects to emerge from the proceedings by May.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $23,129, Ether (ETH) at $1,600 and XRP at $0.41. The total market cap is at $1.06 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Threshold (T) at 115.05%, Aptos (APT) at 86.22% and dYdX (DYDX) at 64.91%.

The top three altcoin losers of the week are Hedera (HBAR) at -7.72%, Decentraland (MANA) at -7.71% and Maker (MKR) at -5.77%.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

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Most Memorable Quotations

“With the help of blockchain technology, we can achieve medical advances so powerful and undeniable that existing systems will have no choice but to change.”

Keith Comito, co-founder and president of Lifespan.io

“It’s very early days, but we continue to believe that stablecoins and central bank digital currencies have the potential to play a meaningful role in the payments space, and we have a number of initiatives underway.”

Alfred F. Kelly, CEO of Visa

“Traditionally, people have looked to centralized intermediaries or governments to solve this problem, but technology like cryptography, blockchain and zero-knowledge proofs offer new solutions.”

Hester Peirce, commissioner of the U.S. Securities and Exchange Commission

“We’ve observed that institutions and enterprises are more open than ever before to working with blockchain companies to enhance their businesses.”

Paul Veradittakit, general partner at Pantera Capital

“We are seeing the consequences of the SEC’s priorities play out in real-time — at the expense of U.S. investors.”

Michael Sonnenshein, CEO of Grayscale Investments

“Other coins or other tokens are being essentially used as a store of value for investment and speculation. [There is a] good argument that they should be treated like a financial product.”

Stephen Jones, assistant treasurer and minister for financial services for the Australian Parliament

Prediction of the Week 

Bitcoin will hit $200K before $70K ‘bear market’ next cycle — Forecast

After two weeks of rally, Bitcoin’s price has largely been flat in the past several days, showing that market participants are not overly concerned in advance of the U.S. Federal Reserve, European Central Bank and Bank of England monetary policy decisions scheduled for next week.

For many, BTC price action is still bound by Bitcoin’s four-year halving cycles. The resulting price pattern offers one “all time high year” in every four, with 2025 next in line. According to pseudonymous analyst Trader Tardigrade, also known as Alan, Bitcoin’s block subsidy halving will occur a year prior and, from then on, the path will be open to a giant $200,000.

“#Bitcoin well-formed structure with stochastic behavior indicates that the next ATH will be at 200K and next floor will be at 70K,” Alan predicted.

FUD of the Week 

Mango Markets sues Avraham Eisenberg for $47M in damages plus interest

Mango Labs, the creator of crypto trading platform Mango Markets, filed a lawsuit against Avraham Eisenberg, seeking $47 million in damages. It also asked the court to rescind an agreement between Eisenberg and Mango’s decentralized autonomous organization. In October 2022, Eisenberg drained around $117 million from Mango Markets by manipulating the price of its native Mango (MNGO) token, allowing under-collateralized loans.

Argo Blockchain accused of misleading investors in class-action lawsuit

A class-action lawsuit claims that crypto mining firm Argo Blockchain omitted key information and made untrue statements during its initial public offering in 2021. The filing alleged that the miner failed to disclose how susceptible it was to capital constraints, electricity costs and network difficulties. It also claimed that a number of documents presented have been prepared negligently, with inaccurate or omitted information.

US Justice Department seizes website of prolific ransomware gang Hive

International law enforcement groups have dismantled the infamous Hive cryptocurrency ransomware gang, recovering over 1,300 decryption keys for victims since July 2022 and preventing $130 million in ransomware payments. Hive was behind a series of notorious ransomware incidents, such as the Costa Rica public health service and social security fund cyberattack that occurred from April into May 2022.

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NFT creator: Amber Vittoria crushes it in her ‘Big Girl Pants’

Named on Forbes 30 under 30, Amber Vittoria made a big splash in the traditional art world and has since embraced NFTs, collaborating with “The Hundreds,” “World of Women” and as MoonPay’s “artist in residence.”

Reformed ‘altcoin slayer’ Eric Wall on shitposting and scaling Ethereum

“There’s multiple cryptocurrency communities who have me as their favorite hate object basically,” says crypto analyst Eric Wall, formerly known as the ‘altcoin slayer.’

Editorial Staff

Cointelegraph Magazine writers and reporters contributed to this article.