GM Readers!📪 It's BitDegree Insider, and it's time to do the right thing - learn stuff.
⭐️Today's selection:
- 🧨The Bitzlato Crackdown
- 😐Genesis Bankruptcy?
- 👌Selected Meme of The Day
- 📰Bite-Sized News
THE BITZLATO UPROAR
In a surprise move, Washington announced yesterday that the regulatory authorities would be taking "major international enforcement action on cryptocurrency."
Though details were not disclosed, investors were urged to wait for the upcoming press conference from the Department of Justice.
As rumors and speculation began to spread, investors panicked and rushed to sell off their crypto assets, causing a decline in the market.
Many feared that the announcement would be related to new, harsh regulations or a significant incident.
However, at the press conference, the Ministry of Justice revealed that the action was actually targeted sanctions against the Russian crypto exchange, Bitzlato.
The founder of the crypto exchange Bitzlato was arrested in Miami on suspicion of laundering over $700 million.
The founder turned out to be 40-year-old Russian Anatoly Legkodimov. He lived in China, but for some reason decided to come to the United States, where he was ''warmly embraced''.
After his arrest, U.S. law enforcement officers gained access to the crypto exchange's servers.
After that, all crypto and information about their clients' Telegram accounts ended up in the hands of the FBI.
The crypto exchange itself reported a "hack."
Further investigation by U.S. law enforcement revealed that Bitzlato had been operating in China and had close ties to the Hydra darknet, which was being used to legalize proceeds from illegal drug sales and stolen identities.
In a statement, Deputy Attorney General Lisa Monaco emphasized that:
"it doesn't matter if you're breaking our laws from China or Europe. Or abusing our financial system from a tropical island. You will still answer for your crimes in the courtroom of the United States."
The cryptocurrency market did not recover from the DOJ's announcement, with Bitcoin falling by 2.7% to $20,700. Despite this, it is still up 18.6% in the last calendar week.
Twitter, as always, had some accurate, yet funny comments about the whole ordeal:
But there's a twist.
The United States Financial Crimes Enforcement Network (FinCEN), has said that Binance has a connection to Bitzlato.
As a response, CZ posted a cryptic tweet:
As sharp-eyed users quickly realised, in this tweet he was referring to the 4th point from his '2023 Do's and Don'ts' list. It goes like this:
'4. Ignore FUD, fake news, attacks, etc.'
Well, let's see what's about to happen.
TL;DR: U.S. Authorities have arrested the Russian owner of Bitzlato, a crypto exchange, on suspicion of money laundering.
GENESIS BANKRUPTCY INCOMING?
According to recent reports, Genesis Global Capital, a cryptocurrency lending firm, may be facing bankruptcy as early as this week.
The company is said to owe lenders over $3 billion and its parent company, DCG, is in talks with creditors to come up with a solution.
Last week, it was revealed that the company's assets were "stuck" in an account with cryptocurrency exchange FTX and that they had stopped withdrawing funds to customers on November 16th.
This was due to "abnormal withdrawal requests" which exceeded the platform's liquidity.
The implications of this bankruptcy for DCG and its investors are still uncertain.
However, it is likely that the news could have a bearish effect on the crypto market. For DCG investors, a Genesis bankruptcy would provide clarity, but it may also dilute their assets.
Some of the key investors in DCG include SoftBank, Bain Capital, Ribbit Capital and Alphabet CapitalG fund.
Possible outcomes:
- The company may file for bankruptcy and go through the necessary procedures.
- DCG may sell some of its venture capital in order to help pay off the debt and avoid bankruptcy.
- The company may come to an agreement with creditors in order to pay off the debt.
Additionally, Genesis may face further legal proceedings with the SEC, as they have been accused of selling unregistered securities.
This could lead to further financial penalties for the company.
It is important to note that the plans for bankruptcy may change as the company is still in talks with creditors.
As more information becomes available, we will keep our readers updated on the situation.
At the end of the day, this story has some irony in it.
Genesis' problems began after FTX collapsed.
FTX collapsed after CoinDesk reported the actual state of the exchange's reserves.
CoinDesk is an independent operating subsidiary of Digital Currency Group. The very same Digital Currency Group that is the parental company of... Genesis Global Capital.
Here you go. La Comédie humaine!
TL;DR: Cryptocurrency lending firm Genesis Global Capital may file for bankruptcy as early as this week, according to reports. The company is said to owe lenders over $3 billion and the news could have a bearish effect on the crypto market.
SELECTED MEME OF THE DAY
BITE-SIZED NEWS
- Regulatory Oversight of Crypto Exchanges Urged by CFTC Commissioner. In the Post-FTX world this can't surprise anyone.
- National Australia Bank to Roll Out Australian Dollar-Pegged Stablecoin in 2023. The Land Down Under Coin.
- SARB Governor Voices Concerns Over CBDC Adoption at WEF 2023. They're afraid.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.