BlockFi and 3AC Try to Clear the Air, CZ Jumps the Gun.
At the beginning of the month, Voyager filed for Chapter 11 bankruptcy shortly after revealing in June that it had a $661 million exposure to Three Arrows Capital (3AC), a crypto hedge fund that itself filed for Chapter 15 bankruptcy on the first of the month after failing to meet margin calls.
This week, Celsius became the latest lender to throw in the towel, filing for bankruptcy little more than a month after it had frozen withdrawals to “stabilize liquidity.”
Zac Prince, CEO of crypto lender BlockFi, which has been battling rumors of insolvency for over a fortnight, took to Twitter to stress that his company is not in the same boat.
Coinshares Chief Strategy Officer Meltem Demirors joined the thread, saying BlockFi was holding shares in Grayscale’s Bitcoin Trust (GBTC), an investment product for institutional investors who want exposure to Bitcoin without the risks of directly holding it. GBTC is currently trading at a 30% discount to BTC.
Prince said "nah."
On Tuesday, 3AC co-founder Su Zhu broke his month-long Twitter silence to post screenshots of a recent email from Advocatus Legal LLP, the firm hired by 3AC, that was sent to legal representatives of the firm’s liquidators. In the letter, 3AC’s lawyers asked the liquidators at Teneo whether they mentioned in their July 8 filing to the U.S. Bankruptcy Court the “threats of physical violence” that the 3AC founders and their families were receiving.
Crypto hedge fund Defiance Capital posted a statement denying involvement with 3AC, while at the same time confirming it had been “materially affected” by the crisis.
NFT market OpenSea also announced it was having problems.
"Today is a hard day for OpenSea, as we’re letting go of 20% of our team. "
Elsewhere, personal finance YouTube guru Nate O’Brien was trying to spread FUD about Coinbase. DeFi developer LukeYoungBlood.eth quickly dispatched a neat counter argument.
"UD much? Look at the fucking balance sheet. They have over $10b in deposits for under $10b in customer liabilities. Unlike other crypto companies that are non-public they have to report this accurately and follow GAAP (generally acceptable accounting practices)."
On Monday, a phishing scam offering a fraudulent airdrop managed to rob Uniswap users of over 7,500 Eth, at the time worth about $8 million.
Binance CEO Changpeng “CZ” Zhao publicly tweeted about the incident before contacting Uniswap, alleging that the DEX protocol was exploited. CZ got it wrong, and later, after clarifications from the Uniswap team, he confirmed that it was indeed a phishing scam.
Chris Maddern, CEO of Floor NFTs, posted some surprising news about Gamestop’s new Ethereum-based NFT marketplace: In 48 hours after launching, Gamestop saw twice the trading volume of Coinbase’s NFT marketplace, which has been open since May.
Finally, economist and gold peddler Peter Schiff said he would accept Bitcoin for his San Juan-based online bank, Euro Pacific, after financial regulators in Puerto Rico recently shut it down for “inadequate capital levels” and a lack of compliance that could aid money launderers.