Dutch Crypto Exchange Bitvavo Expects at Least 80% Recovery from DCG

<p>Bitvavo, an Amsterdam-based <a href="https://www.financemagnates.com/terms/c/cryptocurrency-exchange/" class="terms__main-term" id="601e2e5f-0c28-4253-9ad4-5e6b251ba2fa" target="_blank">cryptocurrency exchange</a>, has said it expects to get back between 80% to 100% of the €280 million it is owed by Digital Currency Group (DCG). However, the exchange in a statement released on Tuesday noted that the expectation is based on an “in-principle agreement” whose details are to be finalized in the coming weeks.</p><p>In addition, Bitvavo noted that it expects the refund for its clients’ assets to be paid in cash, digital assets, cash and convertible preferred equity notes in DCG. The Dutch crypto exchange’s fund has been held by DCG-owned crypto lender Genesis since last year. </p><p>The announcement comes a day after bankrupt crypto lender Genesis, which is owned by DCG, reached in-principle agreement with its creditors on a restructuring plan that would either culminate in its sale or transfer to its equity creditors.</p><p>Watch the recent FMLS22 session on re-imagining the crypto market structure.</p><p>Genesis on January 20th filed for <a href="https://www.financemagnates.com/cryptocurrency/crypto-lender-genesis-files-for-bankruptcy-in-new-york/" target="_blank" rel="follow">bankruptcy protection</a> in New York. The action was triggered by its exposure to two major crypto firms that collapsed last year, including FTX’s sudden fall in November. The crypto lender had made efforts <a href="https://www.financemagnates.com/cryptocurrency/crypto-lender-genesis-seeks-1b-emergency-loan/" target="_blank" rel="follow">to raise capital</a> last year but failed. </p><p>As a result, Genesis is estimated to owe more than 100,000 creditors including the New York-based crypto exchange, Gemini. The DCG subsidiary owes about $900 million to over 340,000 Gemini Earn customers. </p><p>DCG Sells Grayscale Assets to Raise Fund</p><p>Meanwhile, Finance Magnates reported that DCG has started selling off the holdings of Grayscale in several investment vehicles it operates. The assets of the subsidiary asset manager are being sold at half price and are intended to repay Genesis' creditors.</p><p>In other developments related to Genesis, Barry Silbert, the Chief Executive Officer of DCG, recently had <a href="https://www.financemagnates.com/cryptocurrency/winklevoss-feud-with-genesis-leads-to-earn-users-class-action-request/" target="_blank" rel="follow">a face-off</a> with Cameron Winklevoss, one of the Co-Founders of Gemini, with regards to the debt payment process. The development led to <a href="https://www.financemagnates.com/cryptocurrency/news/gemini-winklevoss-twins-face-class-action-lawsuit-over-lending-products/" target="_blank" rel="follow">a class action lawsuit</a> against Genesis from three Gemini Earn customers. Separately, the United States Securities and Exchange Commission (SEC) also charged Gemini and Genesis <a href="https://www.financemagnates.com/cryptocurrency/sec-takes-gemini-genesis-to-court-for-selling-unregistered-securities/" target="_blank" rel="follow">for selling unregistered securities</a>.</p><p>Genesis' troubled state reflects the current situation at the wider cryptocurrency market that is feeling the heat of the collapse of FTX and other crypto projects last year. The situation dented investors' confidence in the cryptocurrency industry.</p> This article was written by Solomon Oladipupo at www.financemagnates.com.

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Crypto Downzing Continues as Huobi Plans to Prune Workforce by 20%

<p class="MsoNormal">The downsizing wave that swept through the cryptocurrency industry in 2022 is still on track as Seychelles-based cryptocurrency exchange, Huobi, has disclosed its plans to prune down its workforce by 20%. </p><p class="MsoNormal">Huobi told Reuters on Friday that it intends to maintain “a very lean team” to cope with the current bear market in the industry. This is even as Justin Sun, Tron’s Founder and Member of Huobi’s Global Advisory Board, disclosed in an internal memo seen by the outlet that the crypto exchange has about 1,100 employees. </p><p class="MsoNormal">Sun also noted that the crypto exchange’s plan for some “structural adjustment” has a first quarter 2023 completion target. The Board Member expects that the company’s reorganization will produce short-term benefits for the exchange.</p><p class="MsoNormal text-align-justify">Genesis and Silvergate Capital Cut Jobs</p><p class="MsoNormal">Meanwhile, Genesis Trading on Thursday announced its second round of job cuts in less than six months. Sources put the figure of affected workers at about 30%. The company attributed the action to efforts to move the business forward. However, the development comes amidst subsidiary Genesis Global Capital’s <a href="https://www.financemagnates.com/cryptocurrency/winklevoss-feud-with-genesis-leads-to-earn-users-class-action-request/" target="_blank" rel="follow">trouble with Gemini</a> over $900 million unpaid debt related to the Gemini Trust Earn programme.</p><p class="MsoNormal">Watch the FMLS22 session on the future of digital assets.</p><p class="MsoNormal">Similarly, crypto-focused bank, Silvergate Capital Corp, also announced a plan to reduce its headcount by 40%. These job cuts come as crypto exchanges search for succor in the face of dwindling investor confidence in crypto.</p><p class="MsoNormal text-align-justify">Crypto Exchanges Cut Jobs in Recent Months</p><p class="MsoNormal">In the past few months, a number of crypto exchanges have also pruned down or announced plans to shed their workforces. </p><p class="MsoNormal text-align-justify">In early December, Bybit <a href="https://www.financemagnates.com/cryptocurrency/bybit-announces-new-job-cut-5-months-after-workforce-trim/" target="_blank" rel="follow">made public its plans</a> to further trim its workforce, with confirmed sources putting the figure at about 30%. The revelation came five months after Bybit shrank its workforce. A Bybit spokesperson said the aim the new layoff round is to “remove overlapping functions and build smaller but more agile teams."</p><p class="MsoNormal text-align-justify">A week before Bybit's announcement, Kraken, one of the longest running cryptocurrency exchanges, <a href="https://www.financemagnates.com/cryptocurrency/crypto-exchange-kraken-cuts-global-workforce-by-30/" target="_blank" rel="follow">decreased its workforce by 30%</a>, firing approximately 1,100 people “in order to adapt to current market conditions.”</p> This article was written by Solomon Oladipupo at www.financemagnates.com.

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Winklevoss’ Feud with Genesis Leads to Earn Users’ Class-Action Request

<p>On Monday, Cameron Winklevoss, the Co-Founder of the crypto exchange Gemini, accused the CEO of Digital Currency Group, Barry Silbert, of “bad faith stall tactics” in resolving the payment of a $900 million debt.</p><p>Winklevoss' Allegations against DCG and Genesis</p><p>The publicly posted letter from one of the Winklevoss twins to Silbert alleged that Gemini had waited six weeks trying to bring Genesis Global Capital and its parent company Digital Currency Group for a <a href="https://www.financemagnates.com/cryptocurrency/crypto-lender-genesis-seeks-1b-emergency-loan/" target="_blank" rel="follow">discussion on the repayment</a> but failed.</p><p>“For the past six weeks, we have done everything we can to engage with you in good faith and collaborative manner in order to reach a consensual resolution for you to pay back the $900 million that you owe, while helping you preserve your business,” Winklevoss’ letter stated. “However, it is now becoming clear that you have been engaging in bad faith stall tactics.”</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">Earn Update: An Open Letter to <a href="https://twitter.com/BarrySilbert?ref_src=twsrc%5Etfw">@BarrySilbert</a> <a href="https://t.co/kouAviTho4">pic.twitter.com/kouAviTho4</a></p>— Cameron Winklevoss (@cameron) <a href="https://twitter.com/cameron/status/1609913051427524608?ref_src=twsrc%5Etfw">January 2, 2023</a></blockquote><p>Winklevoss revealed that Gemini had sent two payment proposals to Silbert and his companies but has yet to receive a response or willingness to resolve the issue. He added: “Every time we ask you for tangible engagement, you hide behind lawyers, investment bankers, and process. After six weeks, your behavior is not only completely unacceptable, it is unconscionable.” </p><p>According to Winklevoss, the Digital Currency Group’s subsidiary, Genesis owes $1.675 billion to Gemini, which belongs to “Earn users and other creditors.”</p><p>Additionally, Silbert responded to the allegations, tweeting that DCG “did not borrow $1.675 billion from Genesis” and the company never missed an interest payment deadline. However, Winklevoss challenged these claims, revealing Genesis borrowed the proceeds with promissory notes.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">There you go again. Stop trying to pretend that you and DCG are innocent bystanders and had nothing to do with creating this mess. It's completely disingenuous. So how does DCG owe Genesis $1.675 billion if it didn't borrow the money? Oh right, that promissory note...</p>— Cameron Winklevoss (@cameron) <a href="https://twitter.com/cameron/status/1609942891648126981?ref_src=twsrc%5Etfw">January 2, 2023</a></blockquote><p>Class Action Arbitration Request</p><p>In response to the public feud between Winklevoss and Silbert, three Genesis earn users have filed a class action arbitration request against Genesis Global Capital and Digital Currency Group. The Genesis earn users alleged that Genesis failed to return their and other Gemini Earn users’ assets, thus breaching the Master Agreement between the two companies. On top of that, they accused Genesis of concealing its state of insolvency from its customers.</p><p>A class-action arbitration is a dispute resolution process that a third-party arbitrator resolves. It is a voluntary and less formal process and is seen as an alternative to a class-action lawsuit.</p><p>Check out the recent London Summit session on "Reimagining Crypto Market Structure."</p><p>Moreover, Gemini and Winklevoss twins are <a href="https://www.financemagnates.com/cryptocurrency/news/gemini-winklevoss-twins-face-class-action-lawsuit-over-lending-products/" target="_blank" rel="follow">facing a class-action lawsuit</a> by investors for failing to register its Earn products as securities.</p><p>Gemini abruptly halted the redemption of its interest-bearing crypto products, offered under Gemini Trust Earn, in mid-November, just after Sam Bankman-Fried’s FTX filed for bankruptcy. The move was made as the <a href="https://www.financemagnates.com/cryptocurrency/bahamas-regulator-challenges-ftx-ceos-allegations-over-customer-funds/" target="_blank" rel="follow">FTX collapse triggered a liquidity crisis</a> at Genesis Trading, a major borrower of Gemini’s lending products.</p> This article was written by Arnab Shome at www.financemagnates.com.

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Why The GBTC Discount Could Lead To A Bitcoin Sell-Off

Grayscale Bitcoin Trust (GBTC) remains the largest bitcoin trust in the world with billions of dollars worth of BTC, but in the last year, the trust has had a hard time keeping up with the market. The result of this has been a large premium that has continued to widen through the bear market. Currently, the GBTC is trading at a record-high premium, which has sparked speculations of a potential BTC sell-off in the pipeline. GBTC Nears 50% Premium The month of November was fraught with adversity for the crypto space and this is mirrored by the GBTC premium. It shows a near-steady increase in the discount or premium to NAV which has carried on into the month of December. On Dec. 7, the GBTC premium to NAV saw one of its largest jumps when it move from 43.61% on Dec. 6 to 47.27% on Dec. 7. This has brought the premium to new all-time highs and even though the following days did not see as large of an increase, a near 1% increase each day saw the GBTC close out last week at a premium to NAV of 48.62%. Related Reading: Inconsistent Metrics Indicate Further Struggle For SUSHI – Colder Winter Ahead? Now, what this means is that the price of ‘one BTC’ is trading for 48.62% lower on the GBTC than it is on the spot market. Normally, this would present as an opportunity to buy for cheap but GBTC investors are not buying any actual bitcoin, and with the issues that Grayscale’s parent company, DCG, has been facing, it has become increasingly obvious to investors that the fund may be headed for trouble. Will This Lead To Bitcoin Sell-Off? The GBTC currently holds more than 640,000 BTC worth around $11 billion at today’s prices. As such, the speculations about a potential collapse do not stem from concerns about Grayscale itself but about its parent DCG company. DCG is reportedly in a $2 billion debt, most of which stems from Genesis Trading which had limited withdrawals a few weeks ago, and Eldridge. Rumors circulating on the interwebs are that DCG actually GBTC shares to collateralize its loan from Genesis, which makes up the large majority of its loan. GBTC share price at $8.01 | Source: Grayscale Bitcoin Trust (BTC) on TradingView.com On a recent episode of ‘The Chopping Block’, Haseeb Qureshi, Managing Partner at Dragonfly Capital, said that the $1.1 billion promissory note to Genesis could be “callable. What this means is that if Genesis were to be liquidated or go into bankruptcy, then DCG would be required to pay the total value of the loan. The problem is that DCG does not have the needed amount to honor it if this does happen. Subsequently, DCG could look towards GBTC for a bailout if this were to happen. Related Reading: Bitcoin Drops Below $17,000 Pre-CPI And FOMC – Scenarios To Prepare For This Week Nevertheless, the GBTC continues to hold up through adversity. Coinbase has previously publicly stated that it holds all of GBTC’s bitcoin in its custody service, and if prices were to start recovering from here, then the premium to NAV could begin to close.

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FTX's Bankman-Fried to face market manipulation probe, Do Kwon chimes in

As part of a broader inquiry into FTX's collapse, federal prosecutors are looking at the role that FTX and Alameda may have played in the fall of Terra LUNA.

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Crypto lender Genesis has no solution yet for withdrawal halts

Genesis said it will take additional weeks to carve out a recovery path for its lending business.

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Genesis Trading Reveals It Has $175M Locked on FTX (FTT)

The derivatives firm said it “does not impact our market-making activities”.

Continue reading Genesis Trading Reveals It Has $175M Locked on FTX (FTT) at DailyCoin.com.

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Genesis CEO Steps Down as Firm Cuts 20% of Staff

Institutional crypto broker Genesis Global Trading has announced that its CEO Michael Moro is resigning and it will be cutting 20% of its workforce. The move marks further fallout from...

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Gemini Sues DCG, Founder Barry Silbert over Genesis’ Debit in Earn Program

Cryptocurrency exchange Gemini has dragged bankrupt digital lender Genesis’ parent company, Digital Currency Group (DCG), and its CEO, Barry Silbert, to court. In a lawsuit filed today (Friday) before a trial court in New York, the exchange accused both parties of “encouraging and facilitating” Genesis’ fraud against the firm.

Gemini Finally Challenges DCG in Court

According to the New York-based exchange, thousands of its users signed up for Gemini Earn Program under which they lent out their digital assets to Genesis in order to earn profit. However, Gemini in cooperation with its parent company lied about its “purportedly robust risk-management practices,” Gemini alleged in its court filing.

Instead, Genesis “was recklessly lending huge amounts to a counterparty [DCG and Silbert] knew was using these huge amounts to fuel a risky arbitrage trading strategy,” Gemini contended. In November, following FTX’s collapse and subsequent bankruptcy filing in New York, Genesis paused withdrawal on its platform, citing “unprecedented market turmoil.” The lender even sought a $1 billion emergency loan from investors.

In the court filing, Gemini said Genesis as a result of this exposure failed to honour its debt to the Earn Program lenders. Cameron Winklevoss, the Co-Founder of Gemini, has previously claimed that DCG was owing its customers over $900 million. On Tuesday, the CEO even proposed a ‘best and final offer’ of $1.47 billion in phased repayments to Gemini, to be completed by 2028.

Hey @BarrySilbert, I'd like to invite you to a Twitter Space to discuss our Best and Final Offer.No lawyers. No advisors. Just friends. I know Earn users would love to hear from you. You can be the first to tell them if you're accepting the deal.Let me know when you're free! https://t.co/EfL9lw2PNe

DCG Lied about Absorbing Genesis’ 3AC Losses: Gemini

In its complaint, Gemini said it wants to recover damages and losses it had racked up as a direct result of Silbert’s “false, misleading, and incomplete representations and omissions” to its firm. Specifically, Gemini contended that the DGC Founder ‘falsely represented’ that the parent company had absorbed, through a $1.1 billion infusion, losses totalling $1.2 billion that Genesis incurred due to its exposure to the now-bankrupt crypto lender Three Arrow Capital (3AC). Ultimately, Silbert allegedly revealed that the supposed infusion was a promissory note not activatable until 2032.

"Silbert knew that Genesis was massively insolvent, but did not disclose that fact to Gemini," the cryptocurrency exchange said. "Indeed, Silbert went far beyond that fraudulent omission, representing to Gemini that, although the Genesis loan portfolio was 'complex,' it could be successfully unwound within a reasonable period of time."

Gemini added: "That is, Silbert told Gemini that Genesis faced only a short-term mismatch in the timing of its loan portfolio, concealing the reality that Genesis had a massive hole in its balance sheet and would be unable to honour its obligations to Gemini and others, because DCG had not actually assumed the 3AC losses."

Since Genesis filed for bankruptcy protection in January 2023, Gemini has been working with the cryptocurrency lender “on a consensual restructuring” that would maximize recovery for Gemini Earn lender “without prolonged delay,” Gemini noted. The exchange added that it was separately pursuing its case against Genesis in the digital lender’s bankruptcy case.

Gemini and DCG Trade Blames

Sharing snippets of the court filing on Twitter on Friday, Winklevoss said the "fraud" committed against Gemini "goes to the very top."

"DCG — and Barry personally – are direct participants in the fraud that has damaged Gemini and hundreds of thousands of Earn users," Winklevoss wrote. "This complaint is an important step in holding them accountable for what they have done."

9/ This fraud goes to the very top. Barry Silbert and other DCG executives were directly involved in these lies and they lied again and again to conceal the truth from Gemini and other creditors. pic.twitter.com/DLW41mm3YP

In a statement released on Twitter on Friday, DCG called Gemini's lawsuit "yet another publicity stunt from Cameron Winklevoss to deflect blame and responsibility from himself and Gemini, which operated the Gemini Earn program."

"Any suggestion of wrongdoing by DCG or any of its employees is baseless, defamatory, and completely false," DCG added.

DCG Statement: pic.twitter.com/Mz9EMTPgLT

Meanwhile, Gemini and Genesis were both sued in January by the US Securities and Exchange Commission which claimed that the feuding companies offered unregistered securities to the public through their crypto lending products. In late 2022, a certain group of investors also hit Gemini with a class-action lawsuit over the Earn Program which had promised up to 7.4 percent yield to customers for lending out their digital assets.

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