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DCG Misses $630M Payment -- But Is It A Default?

Plus Tether ATH and FTX 2.0 in the Works

Author

Nathaniel Whittemore
May 23, 2023

The Breakdown First Five - Tuesday May 23, 2023

5. TRM: Hacks down 70%

TRM labs reported that Crypto hacks are down 70% this quarter after a record setting 2022. Recent hackers have been handing back their ill-gotten gains in exchange for a whitehat bounty, with more than half of all stolen funds recovered in Q1. TRM labs attributed the change in behavior to the Tornado Cash sanctions making it harder to cash out a heist, but maybe there’s just nothing left that’s worth stealing?

4. Court tells BlockFi to shut up

After leaking a reorganization plan earlier this month, BlockFi has been ordered to retract the statement. The Court said BlockFi has no authorization to share the plan or court support, noting that the creditors committee is against the plan. The creditors committee also believes “it is not appropriate for BlockFi, via its current management and professionals, to control the liquidation”.

3. FTX 2.0 in the works?

FTX bankruptcy CEO John Ray billed 6.7 hours of work on the rebirthed exchange last month, sparking speculation that FTX 2.0 might be a real and serious plan. He said in January that “Everything is on the table”. Judging from the billable hours Ray has been working on term sheets and investor communications. The big question is whether anyone would trade on a revamped FTX.

2. Tether hits ATH on low volume

Kaiko’s weekly digest dived into the curious case of Tether’s market cap, which hit an all time high over the weekend on 2-year low volume across exchanges. Unlike its main rival USDC, Tether’s market cap doesn’t appear to be correlated to trading volume or much of anything really. Analysts are perplexed as to the reason underlying strong issuance on declining volume.

1. DCG Defaults?

Digital Currency Group missed its payment of $630M to Genesis last week, raising tensions for ongoing mediation with creditors. Whether or not DCG is considered in default will be up to creditors, who can choose to grant a forbearance. Gemini has flagged that their decision will hinge on DCG’s participation in “good faith negotiations on a consensual deal”. As the largest creditor, Gemini are now looking at reorganization plans that could take place “without DCG’s consensual participation”.

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Thanks for reading -NLW