Day: February 5, 2023

Committee Appointed to Represent Unsecured Creditors in Genesis Global bankruptcy

by Blockchain News

According to documents filed with the court on February 4, a committee consisting of seven members has been constituted to represent the interests of unsecured creditors in the bankruptcy case involving Genesis Global.

The committee will act as the representatives of the creditors in court, and it will have the right to participate in the restructuring plan as well as the right to be consulted before to key decisions. In most cases, members are chosen at random from a list including the 20 biggest unsecured creditors.

Mirana Asset Management, which is a division of the cryptocurrency exchange Bybit, SOF International, Digital Finance Group, and the cryptocurrency exchange Bitvavo are some of the organisations that have been selected as members, along with three individual creditors: Amelia Alvarez, Richard Weston, and Teddy Andre Amadeo Goriss.

The United States Trustee is an executive branch institution under the Department of Justice that is responsible for managing bankruptcy proceedings. William Harrington, a spokesman for the United States Trustee, was the one who appointed the organisation. In the process of filing for bankruptcy, one of the most significant steps is to establish a committee of creditors.

Bitvavo is one of the largest creditors, having an exposure of more than $290 million; it is followed by Mirana, which has an exposure of $150 million, and Digital Finance Group, which has an exposure of $37 million.

On January 19, Genesis Capital, which includes Genesis Global Holdings and its lending business subsidiaries Genesis Global Capital and Genesis Asia Pacific, filed for bankruptcy, alleging potential liabilities of up to $10 billion.

Two months after discovering liquidity concerns as a result of the failure of the cryptocurrency exchange FTX, the firms filed protection under Chapter 11 of the Bankruptcy Code. Since November 16, 2022, the Genesis Global Capital platform has not allowed for any withdrawals to be processed.

On January 24, a group of creditors filed a securities class-action complaint against the Digital Currency Group, the parent company of Genesis, as well as its creator and CEO, Barry Silbert. The lawsuit alleges that the defendants violated federal securities laws.

In the case, it is alleged that Genesis engaged in securities fraud by concocting a plan to defraud prospective and current lenders of digital assets by making assertions that were false and deceptive. Plaintiffs believe that Genesis knowingly misrepresented its financial status, which they claim constitutes a violation of Section 10 of the United States Securities Exchange Act (b).

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U.K. Central Bank and Treasury Believe Digital Pound is Needed

by Blockchain News

According to a story that was published by the Daily Telegraph on February 4, the Bank of England (BoE) and His Majesty’s Treasury feel that it is possible that the United Kingdom will need to develop a central bank digital currency (CBDC) by the year 2030.

According to a source inside the administration who spoke to the publication, the “digital pound” blueprint is going to be unveiled the following week. On February 7th, Deputy Governor Jon Cunliffe is going to provide an update on the work that the BoE has been doing on the CBDC.

The Governor of the Bank of England, Andrew Bailey, and the Chancellor of the Exchequer, Jeremy Hunt, were quoted in the Telegraph as saying that they believe it is likely that a digital version of the pound will be required in the future. This conclusion was reached on the basis of the work that has been done up until this point.

The Bank of England did not comment on the report but did say that a joint consultation about the digital pound will be made available in the near future.

It was reported that cash and coin payments in the United Kingdom dropped by 35% in the year 2020. About one payment out of every six is made with cash, while the other five are made using debit and credit cards. A digital currency produced by a central bank is a digital representation of government-issued money that is pegged to fiat reserves on a one-to-one basis.

The announcement was made only a few days after HM Treasury published a job listing on LinkedIn advertising an open position for a head of central bank digital currency. The function was described as “important, complicated, and cross-cutting” in the job description, and it was said that it required “substantial involvement within and beyond the HM Treasury.”

The digital pound is only one of the numerous CBDCs that are anticipated to be implemented in different parts of the globe in the years to come. The European Central Bank has been debating the possibility of a digital version of the euro, and a number of other nations, notably Sweden and Denmark, are also looking into the possibility of adopting digital currencies.

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3 Website Operators Lured Romance-Seeking Victims Into Their Fraud

by Blockchain News

The New Jersey Bureau of Securities has issued a cease and desist order to the owners of three websites, instructing them to stop attempting to con people who are looking for love into investing in their fraudulent cryptocurrency scams. The order was issued in response to the New Jersey Bureau of Securities’ discovery that the owners of these websites were targeting people who were looking for love. The New Jersey Bureau of Securities made the finding that the websites were specifically targeting persons who were interested in romantic relationships, which led to the issuance of the order. The New Jersey Bureau of Securities conducted an investigation into the websites in question, and based on the results of that investigation, the agency made the decision to issue the order.

The orders to cease and desist were reportedly sent to the firms Meta Capitals Limited, Cresttrademining Limited, and Forex Market Trade, as stated in a press release that New Jersey Attorney General Matthew Platkin released on February 3rd. The office of the state’s Attorney General made the statement that was issued by Platkin available to the general public for viewing.

The three companies all pretended to be platforms for trading cryptocurrencies, and they convinced their customers that they would be able to significantly increase the amount of money that they had in their accounts if they simply replicated the actions taken by the “expert traders” employed by the companies. However, the customers lost all of their money because the companies were only pretending to be platforms for trading cryptocurrencies.

By contacting individuals who are using dating apps like Tinder to hunt for love connections, these organisations recruit fresh victims for a scam that is frequently referred to as “pig slaughtering.”

Con artists will contact prospective victims on social media, attempt to build a romantic relationship with them, and when they have gained the confidence of their victims, they will try to trick them into investing in a fake bitcoin investment plan. This kind of fraudulent behaviour that takes place online is referred to as “pig butchering,” and it has its own moniker.

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StarkWare to Open Source Proprietary Prover

by Blockchain News

The scaling solution for Ethereum’s layer 2 To far, StarkWare has processed 327 million transactions and coined 95 million nonfungible tokens (NFTs). StarkWare has announced intentions to open source their proprietary Starknet Prover under the Apache 2.0 licence. This will take place in the near future.

The prover is an essential piece of software that Starkware employs in order to wrap up hundreds of thousands of transactions and condense them into a brief cryptographic proof that is then recorded on the Ethereum blockchain.

“Here at Stark Industries, we consider the Prover to be the technological equivalent of a magic wand. “It does a fantastic job of generating the proofs that enable inconceivable scalability,” said Eli Ben-Sasson, president and co-founder of Starkware. “It allows unprecedented growth.”

Starkware has come under fire from the cryptocurrency community as well as solutions that compete with it, such as ZK Sync and Polygon, for the fact that it retains ownership of the intellectual property (IP) that underpins its technology. This runs counter to the open source and interoperable ethics that underpin blockchain technology.

By making the prover open source and releasing it under the Apache 2.0 licence, any other project or network, as well as producers of games or databases, will be allowed to utilise the technology, modify the code, and personalise it as they see fit. The technology didn’t become widely available until 2020, but ImmutableX, Sorare, and dYdX are already making use of it.

Avihu Levy, head of product at Starkware, was hesitant to commit to a time period for open-sourcing the prover but said that it will take place after the introduction of the token and the decentralisation of Starknet itself. Nevertheless, he acknowledged that it would be doable throughout this year.

Levy said that the choice to open source the prover demonstrated that Starkware was becoming more confidence in its technology. He also stated that it would allow projects to become more confident about using it as an essential component of their protocols.

“Within StarkEx, this is something that is sometimes referred to as vendor lock-up or lock-in. Therefore, the commitment to StarkEx was not merely a commercial commitment; rather, it was a commitment to the company’s technological development,” he stated.

“This is a clear indication that you will have everything at your disposal to operate it without relying on Starkware,” the speaker said.

Starkware’s programming language and EVM rival, Cairo 1.0, as well as Papyrus Full node, have both been open-sourced, and the company is now in the process of open-sourcing their newest sequencer.

The Starkware Sessions conference was kicked off on Sunday in Tel Aviv by Ben-Sasson. According to the event’s organisers, it is the biggest layer 2 conference that has been hosted up to this point.

Around 500 visitors and engineers were in attendance when he made the statement. “This is a watershed moment for scaling Ethereum,” he said. It will establish Stark technology as a public asset that can be put to use for the common welfare of all people, which is the proper position for it.

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FTX seeks to recover political donations made by Sam Bankman-Fried

by Blockchain News

According to a statement that was made public on February 5th, the new management of FTX is attempting to recoup political contributions that have been given by Sam Bankman-Fried and other FTX executives up to February 28th.

This action is being taken as part of the bankruptcy procedures for the cryptocurrency exchange, as well as an endeavour to reimburse the exchange’s creditors. Andy Dietderich, an attorney for the dissolved company FTX, said that as of the 11th of January, the company has “recovered $5 billion in cash and liquid cryptocurrency.” The total amount of liabilities comes to around $9 billion.

According to what is mentioned in the aforementioned statement, “FTX Debtors are sending confidential messages to political figures, political action funds, and other recipients of contributions or other payments that were made by or at the direction of the FTX Debtors, Samuel Bankman-Fried, or other officers or principals of the FTX Debtors” (collectively, the “FTX Contributors”). The FTX Debtors have demanded that these receivers refund the cash in question to them by the 28th of February in 2023.

With a contribution of $5.2 million, Bankman-Fried ranked as the second-largest “CEO donor” to Joe Biden’s campaign in the year 2020. In the midterm elections that took place in November 2022, he revealed that he was a “major contributor” to politicians running for both the Democratic and Republican parties.

Prosecutors in the United States are looking into the contributions that FTX made to various political parties and politicians. According to court records that were submitted in January, FTX creditors are evaluating contributions that total $93 million that were made between March 2020 and November 2022.

On December 19, the new management of FTX proposed a process through which elected officials and political organisations might voluntarily refund monies that had been contributed by FTX executives in the past. Donations that have not been reclaimed are going to have to be reimbursed with interest from now on:

“The FTX Debtors reserve the right to commence actions before the Bankruptcy Court to require the return of such payments, with interest accruing from the date any action is commenced,” which means that “in the event that such payments are not returned voluntarily, the FTX Debtors reserve the right to require the return of such payments.”

In addition to these measures, the new leadership of FTX has devised plans to liquidate non-strategic interests that are valued at $4.6 billion. These investments include FTX companies such as LedgerX and Embed, as well as those located in Japan and Europe. The firms are completely separate from FTX and keep their finances in separate accounts.

The United States Attorney’s Office for the Southern District of New York also established a task force in order to “trace and recover” any customer funds that went missing during the collapse of the FTX exchange. This task force will also be responsible for overseeing any investigations or legal proceedings that are associated with the collapse of the exchange. Bankman-Fried has entered a not guilty plea to all of the criminal allegations that are connected to the repercussions from the corporation.

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Property linked to FTX customer funds pulled from market

by Blockchain News

According to a story in the Wall Street Journal, the seller of a property that was tied to Sam Bankman-political Fried’s expenditures removed the property off the market as a demonstration of “good faith” after discovering that the property was linked to FTX customer money.

The townhouse, which can be found in the Capitol Hill neighbourhood of Washington, D.C., just a few blocks away from the United States Capitol, is owned by Guarding Against Pandemics, a charitable organisation that was founded by Gabriel Bankman-Fried, the brother of the former CEO of the stock exchange that went bankrupt.

In documents submitted to the court in January by FTX’s new management, the company said that client cash had been improperly used to acquire the property for $3.3 million. The listing for the property was removed by Guarding Against Pandemics after it was brought to the attention of several media outlets by the real estate agent.

The Wall Street Journal was informed by a spokeswoman for Guarding Against Pandemics that Gabriel is no longer affiliated with the group. The creditors of FTX have only recently sent subpoenas against Bankman-mother, Fried’s Barbara Fried, and Gabriel, alleging that they did not answer to prior information demands and demanding that they provide certain papers.

According to the property records, the charitable organisation attempted to sell the property to lobbyist Mitch Bainwol and his wife, Susan Bainwol, for the same sum that it paid for the property in April of 2022.

The three-story property has a total area of 4,100 square feet, four bedrooms, and was purportedly being used as an office by the group, with workstations being set up in a variety of rooms across the building. The real estate business that was in charge of the listing organised a few open houses; nevertheless, they did not get any bids to buy the property.

Prosecutors in the United States are looking into the contributions that FTX made to various political parties and politicians. With a contribution of $5.2 million, Bankman-Fried ranked as the second-largest “CEO donor” to Joe Biden’s presidential campaign for the year 2020. A few days before the midterm elections in November 2022, he acknowledged to being a “major contributor” to both of Washington’s political parties. These elections were for the House of Representatives and the Senate.

Since the bankruptcy petition was filed on November 11, the new management team of the exchange has been hard at work trying to locate cash with which to repay the exchange’s creditors. Andy Dietderich, an attorney for FTX, said that as of the beginning of the year, the exchange had “recovered $5 billion in cash and liquid cryptocurrency.”

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Why A-List Celebrities Are Still Promoting Unvetted NFT

by Blockchain News

While the backing from a large number of A-list celebrities helped to speed up the boom in the use of non-fungible tokens (NFT) in 2021 and 2022, some of those celebrities pushed unvetted projects to their supporters without understanding whether or not the projects were authentic. Even after the markets have recovered in 2023, the practise continues to enjoy widespread adoption.

In addition, the MMA fighter failed to take into account the vital fact that the frequently asked questions section of the website explains that there is no way for investors to get “Sourz” NFTs.

When Kim Kardashian pushed the EthereumMax (EMAX) crypto token to her 330 million Instagram followers in June 2021, the United States Securities and Exchange Commission (SEC) uncovered a situation that was identical to the one that had occurred in June 2021 with Kanye West. The Securities and Exchange Commission believes that by omitting to report the sum of $250,000 that she had received for the promotion, Kardashian violated the anti-touting section of the Securities Act.

Coffeezilla, on the other hand, took measures to guarantee that the people who fell for the fake NFT project were informed as soon as possible. Users are taken to a website that issues a warning about the possibility of being taken advantage of when they click the “Mint Sourz” button (as seen in the screenshot located above).

Although Coffeezilla intends to provide further details in a subsequent video, the event serves as a powerful caution to influencers and investors that they should do their own investigation before to promoting or investing in a project.

According to the fictitious creator Atto, the project Little Shapes NFT, which was established in November 2021, was a “social experiment” with the goal of shedding light on large-scale NFT bot network frauds that were taking place on Twitter.

When asked about the motivation for the creation of the NFT project, Atto replied that he required a tale that sells to ensure that no one would disregard a story that hurts. He said this when expressing his objective behind starting the project.

The planned avatar-style project known as Little Shapes, which would include 4,444 NFTs and enable owners to interact with and modify the artwork in real time, was advertised under this name.

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NFT project was actually a “social experiment” designed to shed light

by Blockchain News

Little Shapes NFT was first conceived as a “social experiment,” as disclosed by Atto, the pseudonymous originator of the project. The goal of the “social experiment” was to bring light on large-scale nonfungible token (NFT) bot network frauds on Twitter.

Since late December 2022, Little Shapes has been receiving a significant amount of attention from the crypto community as well as the media. This is because the creator of the company was featured in multiple tweets that went viral and detailed events in his life that sounded too fantastic to be true.

A man woke up after being in a coma for five months, discovered that he had assets locked on FTX, told his wife about it, and then discovered that she had been cheating on him with other individuals in the NFT business. These are just a few examples.

However, the exposé was based on true events. “Here’s how a ring of influencers and entrepreneurs sucked more than $200 million out of the ecosystem across 274 projects,” Little Shapes NFT stated, adding that: “Over the course of the previous year, NFT Twitter has been managed and controlled largely by a lone Twitter botnet.” The majority of its appearances were in February 2022, and it was put to use in combination with a network of influential people and beta testers in order to sell out projects.

The actual paper has a heading that reads, “The insider NFT bot network that’s been dominating the market behind the scenes.”

It claims that from February 2022, a huge number of low-level NFT ventures have used bot networks to artificially develop excitement and legitimacy in an effort to scam investors. This was done in an attempt to pull the wool over investors’ eyes.

During an interview that took place on February 2 with BuzzFeed News, Atto, who is also the creator of BALLZNFT, referred to Little Shapes as “performance art” and emphasised that “people don’t pay attention until you give them a reason to.”

He added, “I needed a tale that sells to ensure that no one would disregard a story that hurts,” and that was exactly what he did. “I needed a story that sells.”

The paper refers to bot networks such as “Dmister” that provide social media engagement as a crucial channel for NFTs projects and only price around one hundred dollars for every one thousand likes, retweets, and responses purchased.

The BALLZNFT team even promoted Little Shapes NFT by using Dmister as an example of how it works in order to spread awareness about their product.

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Crypto Firms Make Job Cuts Amidst Ongoing Crypto Winter

by Blockchain News

This week, many cryptocurrency companies have eliminated jobs in response to the current crypto winter. However, these companies have chosen to keep “impactful” people on staff as they prepare for a “longer slump.”

At least 216 jobs were cut across three different cryptocurrency companies. These companies are open-source software laboratory Protocol Labs, blockchain data firm Chainalysis, and cryptocurrency exchange Bittrex. Each of these companies reduced their workforce by 89, 83, and 44 employees, respectively.

In a blog post dated February 3, Juan Benet, CEO of Protocol Labs, the firm that introduced Filecoin (FIL), said that the company will be cutting jobs because it needed to concentrate its workforce “against the most impactful and business-critical projects.”

He claimed that the firm had come to the conclusion that it was in the best position to “weather this protracted winter” by eliminating “89 jobs,” which is equivalent to around 21% of its staff.

Given that the cryptocurrency business is now experiencing “very tough” conditions, Benet said that the firm should “plan for a lengthier slump.”

Meanwhile, on February 1, Bittrex CEO Richie Lai emailed the firm’s workers to notify them that the company would be reducing its employment in order to “maintain the long-term health” of the business.

On February 2, the email was shared inappropriately on Twitter. Lai claimed that despite the fact that the leadership team has been “working vigorously” over the last several months to decrease expenditures and boost efficiency, the efforts have not achieved the “results required.” Lai added that the efforts have not delivered the “results necessary.”

Lai went on to say that the current state of the market necessitated a reevaluation of the company’s approach and a readjustment of its “investments with the new economic climate.”

On February 2, 2018, records pertaining to employment in the state of Washington indicated that Bittrex had eliminated 83 positions.

According to statements made by Maddie Kennedy, director of communications at Chainalysis, to Forbes on February 1, the firm let off 44 of its 900 workers, which represents around 4.8% of the workforce. Kennedy said that those who were let go were “mainly in sales” at the company.

The announcement of these layoffs follows reports that in January, at least 2,900 employees were let go across 14 different cryptocurrency organisations.

Among those companies, Coinbase saw the most personnel reductions, with 950 employees losing their jobs on January 10th.

During this time, rival cryptocurrency exchanges Crypto.com, Luno, and Huobi each laid off about 500 employees, 330 employees, and 320 employees, respectively.

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