Cryptocurrency prices were showing signs of life as investors sorted out the wreckage of sector bankruptcies and scandals.
Bitcoin (~ BTC USD) It rose 7.2% this week after falling 1% to $18,120.31 on Jan. 12, according to data firm CoinGecko.
Ethereum, the native currency of the Ethereum blockchain, fell 1.2% to $1,383.85, but gained 10% on the week. Dogecoin fell 1.8% to $0.077114, gaining 5.3% over the past 7 days.
“Bullish sentiment seems to be in full swing this week,” said James Edwards, a cryptocurrency expert at Finder. Led by a dog-themed coin called.”
Cryptocurrency investors have suffered in light of other high-profile failures, such as the collapse of FTX and Celsius Network, which declared bankruptcy in July.
David Lesperance, managing partner at immigration and tax advisors Lesperance & Associates, said crypto investors in bankrupt companies such as Celsius have received bad news recently.
U.S. Bankruptcy Judge Martin Glenn for the Southern District of New York ruled that Celsius, not the investors, owned the assets in the account.
“The judge ruled that Celsius’ terms of service – long contracts published by many websites but rarely read by consumers – meant that ‘virtual currency assets became the property of Celsius’. I did,” Lesperance said.
“Many other platforms have terms of service similar to Celsius, so this precedent shows how the assets of other failed crypto companies are designated..”
Crypto bankruptcy will sacrifice investor privacy
According to the Glenn ruling, Celsius had approximately 600,000 accounts in the Earn program with a total value of approximately $4.2 billion as of July 10, 2022.
New York State Attorney General Letitia James filed a lawsuit on January 5 against Alex Mashinsky, co-founder and CEO of the Celsius Network platform. ”
Winston Ma, an adjunct professor at New York University Law School, said the FTX case had new unintended consequences.
“Anonymity is widely touted as one of the Holy Grails of Web3, but the collapse of several cryptocurrency platforms starting last year has tested the industry’s promise to user privacy.” Ma, author of Blockchain and Web3: Building the Cryptocurrency, Privacy, and Security Foundations of the Metaverse, said:
Ma said the Chapter 11 filing left hundreds of thousands of Celsius customers de-anonymized after a September court ruling forced them to disclose account holder names and coin balances. rice field.
CNBC used documents filed in Delaware bankruptcy court to identify Alibaba co-founder Joe Tsai, New England Patriots owner Robert Kraft, and billionaire hedge fund manager. It brings together more prominent and notable investors than previously disclosed, including one Paul Tudor Jones. , among others.
Ma said a public altercation between stakeholders over a cryptocurrency bankruptcy has revealed more details. In the past, only low-profile creditors, or small depositors, were the most well-known.
Dutch Crypto Investors Owe $297 Million By Genesis
“They’re talking to the press, signing on to Zoom hearings with their videos on, interrupting courtroom breaks to play music,” he said. ‘s domestic and global creditors remain anonymous, while their names are out there.”
But in the new year, even the biggest players are speaking out on Twitter and other public channels, said Ma. , accusing billionaire Digital Currency Group CEO Barry Silbert of accounting fraud.
Finder’s Edwards said FTX is old news and DCG is “the new multi-billion dollar elephant in the room.”
“The macro outlook for the cryptocurrency market is entirely dependent on how the company operates its indebted subsidiaries, including lender Genesis, which owes $1.1 billion to crypto exchange Gemini.” he said.
“Gemini Earn was using Genesis to generate yields of up to 8% on cryptocurrencies for its users. recovered to.”
“The problem is, given the current market conditions and the fragility of the crypto banking environment, it is an open secret that Genesis will struggle to pay on time,” Edwards said.
“Gemini is feeling the heat too, with their own users filing a class action lawsuit over the Earn program,” he said.
According to Edwards, Winklevoss published an open letter and tweets directed at Silbert, urging the board to remove him, blaming him for mismanagement of Genesis and ultimately the plight of Gemini users. It is said that it is to blame.
“Dutch exchange Bitvao also wants blood and owes $297 million from Genesis,” he said. “It states that the DCG’s proposed repayment plan is unacceptable, accusing it of being fully solvent and able to repay Genesis’ creditors.
