Remember when Sam Bankman-Fried admitted to being a big donor to the Democratic and Republican parties? Well, the recipients of the dubious money have been formally asked to return the funds to FTX’s creditors. So far, we are aware of three prominent Democratic groups — the DNC, the Democratic Senatorial Campaign Committee, and the Democratic Congressional Campaign Committee — that returned SBF-related donations in December 2022. Will the rest follow?
As FTX seeks compensation, Digital Currency Group and its bankrupt subsidiary Genesis Global Trading have agreed on 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, Crypto Biz is revisiting familiar stories related to FTX and Digital Currency Group and analyzes the failure of cryptocurrencies to gain public trust.
FTX aims to return political donations by the end of February
The rise and fall of Sam Bankman-Freed was shrouded in extreme controversy after we learned that the FTX founder was a major donor to the Democratic and Republican parties. Now that the bankrupt FTX is recovering cash and liquid cryptocurrencies, the company’s new management wants to return all political donations from the SBF and its henchmen. “FTX Debtors send confidential messages to politicians, political action funds, and other recipients of contributions or other payments made by or at the direction of FTX Debtors, Samuel Bankman-Fried, or other FTX Debtors officers or directors. FTX attorney Andy Dietderich wrote. “These recipients are requested to return such funds to FTX debtors by February 28, 2023.”
Research shows that the price of bitcoin was more closely associated with FTX events than with macroeconomic events during the last quarter of 2022. https://t.co/X2NZnbMUsU
— Cryptooshala (@Cryptooshala) February 10, 2023
DCG sells Grayscale shares to raise capital: report
Grayscale products were a hot commodity in the 2021 bull market. Now even the owner of Grayscale is selling shares to preserve capital and liquidity in a bear market. Citing U.S. securities filings, the Financial Times reported Feb. 7 that Digital Currency Group (DCG) is selling shares in several Grayscale products, including an Ether investment trust, possibly to avoid a larger liquidity crisis at the holding company. Digital Currency Group confirmed the sale, but attributed it to “an ongoing rebalancing of the portfolio.” At this point, DCG’s financial problems are well known. Much has to do with its Genesis subsidiary, which filed for bankruptcy on Jan. 19, allegedly owing $3 billion to creditors.
Genesis Lenders Expect 80% Recovery Under Proposed Restructuring Plan
Speaking of Genesis, lenders can expect to get 80% of their money back, but only if the recently proposed restructuring plan goes smoothly. On February 6, Genesis announced that it had reached an “agreement in principle” with DCG and its lenders that would eventually allow customers to recover most of their deposits. Under the proposed agreement, DCG will swap a $1.1 billion promissory note maturing in 2023 for convertible preferred shares and refinance existing loans to free up $526 million. The Winklevoss Gemini Exchange will also contribute $100 million to Gemini Earn users whose funds are frozen in Genesis. Even if everything goes according to plan, the relationship between the Twins and DCG seems irrevocably broken.
What awaits Genesis creditors after bankruptcy? https://t.co/NuEqD1CBJN
— Cryptooshala (@Cryptooshala) February 9, 2023
Super Bowl LVII cryptocurrency ad deals fall apart after FTX crash: report
Don’t expect a Hail Mary crypto during this weekend’s Super Bowl as the NFL has reportedly dropped any plans to promote the industry on game day. According to an Associated Press report, the league was considering running four cryptocurrency-focused commercials during the Super Bowl. Crypto will now get “zero representation” during the big game due to all the negative press surrounding the industry. It seems like a million years ago, but Super Bowl LVI 2022 featured commercials from FTX, eToro, Crypto.com and Coinbase. Even comedian Larry David got hooked on the FTX commercial. Now he is facing a class action lawsuit for allegedly pumping the crypto exchange without due diligence.
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Credit : cointelegraph.com
