Galaxy to Get Sued and Genesis CEO Steps Down - August 12, 2022 - August 19, 2022

Transcript

[Music] thanks for tuning in to this week's news recap galaxy drops bitco acquisition biko to sue galaxy on monday galaxy digital announced the termination of its 1.2 billion acquisition of bitco the crypto custodian according to its press release galaxy is not going through with the deal because biko failed to deliver audited financial statements for 2021 that comply with their agreement however bitco is pushing back against its much bigger counterparty biko said that the termination of the deal is improper and that the company is going to seek a 100 million termination fee the attempt by mike novogratz and galaxy

digital to blame the termination on biko is absurd our brian timmons partner at bitco's legal firm told the block galaxy ceo mike novogratz has not yet commented on bitco's plans alex mashinsky made some bad trades prior to celsius's bankruptcy the financial times reports that alex mashinsky ceo of bankrupt crypto lender celsius took control of the company's trading strategy in january days before a u.s federal reserve meeting bushinski was apparently convinced that the fed would raise interest rates and started overruling experienced financial professionals within his company according to the article machinski sold millions of dollars worth of btc only to buy it at a loss on the following day

some people were outraged by his behavior especially since just months later celsius halted withdrawals from the platform and filed for bankruptcy this is not normal d jetting it's not his money he was gambling with this is a concoction of ridiculous arrogance sociopathy and a heavy sprinkling of scam salt said jordi alexander cio of seleni capital meanwhile celsius's current financial situation does not look promising this week a new court filing from celsius's law firm kirkland and ellis revealed that the crypto exchange would run out of cash by october the company did receive some good news this week as it was allowed by the court to sell some of its mind btc in order to

meet operational expenses lastly cdpq one of the largest pension funds in canada announced that it had to write off a 150 million dollar investment in celsius coinbase ceo hints that the exchange won't censor ethereum brian armstrong coinbase ceo said on twitter that he'd rather shut down the exchange's sticking service than censor transactions to comply with ofac sanctions armstrong's tweet came in response to a question from leftirus carapetsis founder of portfolio management tool rocky who tweeted if regulators ask you to censor at the ethereum protocol level with with your validators will you a comply and censor at the protocol level b shut down the

staking service and preserve network integrity what kick started this discussion was the concern that centralized taking services needing to comply with sanctions would lead to compliance at the protocol level after the merge once ethereum moves to proof of stake coinbase is expected to be one of the largest validators in the ecosystem michael morrow resigns as genesis ceo michael morrow stepped down as genesis global trading ceo as the company announced other changes in the leadership team genesis was one of the many companies that suffered from exposure to bankrupt crypto hedge fund three eros capital in july genesis filed a 1.2 billion claim against 3ac after the latter failed to meet a margin call

morrow served as chief executive of the crypto broker for more than six years and will be replaced temporarily by ceo dara islam it has been an honor to lead genesis for nearly a decade and i look forward to supporting the company's next phase of growth said moro in addition genesis is laying off 20 of its employees in an attempt to navigate through the crypto 3ac was all over the news this week as well on monday new york magazine published an excellent article by jen vyatchner exposing the history of the hedge fund and his two co-founders xu and kyle davies here are some highlights 3ac did not want to put up collateral for its loans it was supposed to be reputation based

matt walsh co-founder of castle island ventures started suspecting 3ac when the latter seemed to be desperate about a 20 million deal signaling that it might be insolvent the tara blowout meant half a billion dollars loss for 3ac and it kick-started the collapse of the fund castleman chief business officer at blockchain.com said we firmly believe they committed fraud it became clear that they were insolvent but we're continuing to borrow which really just looks like a classic ponzi scheme zhu and davies intended to buy a yacht which was the subject of numerous memes on twitter and name it much wow add more unstable coins to the list a call a dollar or ausd the stablecoin

built on a calla network suffered a major depak on monday but it later recovered almost completely after a governance vote the reason for the exploit was a configuration mistake on a liquidity pool which resulted in error mints of ausd after the hackers exploited the bug ausd lost 99 of its value reaching a low of 0.009 or 0.9 cents according to coin gecko however the team in a column was able to fix the liquidity pool issue and aud pumped more than 10 000 from its lows reaching a high of 92 cents the recovery came after a proposal was passed in which the akala community voted to burn the 1.29 billion ausd

tokens held by 16 wallet addresses involved in the exploit in another related event husd the stable coin issued by stable universal also lost its peg after an imbalance on the curve pool and is now trading at 99 cents speaking of stable coins tether the company behind usdt announced a partnership with accounting firm bdo to issue assurance and attestation reports of its reserves dokwan's first interview wasn't well received jo kwon founder of layer one tara broke a long silence in an interview given to coinage media months after the collapse of the ecosystem here are some highlights from the interview quan stated that tara was never intended as a fraud and that he didn't think that

blockchain would collapse tara and luna were essentially my life i bet big and i lost i alone and responsible in response to questions about his hubristic comments on twitter he responded i developed an entertaining alter ego to match the community quan confirmed that investigators have not reached out and haven't charged him with anything the interview sparked criticism on crypto twitter as people wondered why the interviewer didn't ask harder questions i wonder why do quan chose you over all those media titans could it be perhaps that tfl is an investor in coinage asked fat man tara a crypto influencer zero percent royalties for creators pseudoswap a decentralized nft marketplace on ethereum launched an

automated market maker that set artist royalties at zero percent which sparked a heated debate on crypto twitter the pseudo amm allows anyone to mint an nft on the marketplace without having to pay a percentage in royalties to the creator the biggest nft marketplaces such as openc magic eden and looks rare do honor the royalties set by creators but it has become clear that this is social convention as the royalties cannot be enforced on chain i think the creator royalty argument is actually a lot simpler than people make it out to be there is zero way to force royalties technologically so creators will have to build a collector base that want to honor those royalties it's really that simple said nft artist people yaw a marketplace built on solana was

the first to offer this feature earlier this year in addition salon art allows sellers to choose whether they want to pay the royalty fees to creators and if so how much as a creator myself i had a heated debate about this topic with hasive taroun and tom on this week's the chopping block so be sure to take a listen miners are at a loss after a very profitable 2021 bitcoin mining companies are taking big losses this year this week several firms reported their second quarter earnings showing big red numbers bitfarm a publicly traded bitcoin mining company reported a 142 million dollar loss in q2 the quebec based companies stock plummeted over 20 after the release

greenage announced it will be halting its plans to expand its operations into texas due to a sudden change in mining economics the company also reported a 108 million dollar net loss in the second quarter of the year bryant posted a 366 million net loss for the quarter however ceo jason less remains optimistic we are extremely encouraged by riot's financial resilience and operational achievements this quarter he said stronghold restructured its debt and changed his focus to selling power rather than mining btc after reporting a 40 million net loss in the quarter meanwhile bitcoin's hash rate a measure of the computing power of the network has been experiencing a decline since june and now sits at 200

million tara hashes per second time for fun bits poop to earn joe jae-wan south korean professor invented a toilet that turns human waste into energy and pays people in digital currency the energy is used to power the building of the ulsan national institute of science and technology students who use the toilet earn 10g gold a day which can be used to buy goods on the campus such as snacks and books toilet users earn goal a literal shitcoin joked brian rommel on twitter [Music] alright thanks so much for joining us today to learn more about arie and tornado cash check out the show notes for this episode don't miss the unchained daily newsletter which

features a roundup of the biggest news in crypto every weekday morning visit unchainedpodcast.com to subscribe unchained is produced by me laura shin without from anthony yoon matt pilcher juan ranovich pamela jimdar shashank and clk transcription thanks for listening you