BlockFi files for bankruptcy

Crypto lending firm BlockFi has filed for Chapter 11 bankruptcy in the wake of the FTX collapse. The company was in dire straits in the spring after Terra and Three Arrows Capital blow-ups, but was bailed out in June by a $250 million loan from FTX, followed by a deal giving BlockFi a $400 million credit facility and giving FTX the "option to acquire" BlockFi.

Because of this dependency, it was no surprise when BlockFi announced they were once again in crisis following the FTX explosion. On November 15, the Wall Street Journal reported they were preparing for possible bankruptcy and considering layoffs.

On November 28, BlockFi filed for bankruptcy. Their filing estimates they have more than 100,000 creditors (the maximum option on the form), between $1–10 billion in assets, and between $1–10 billion in liabilities.

Shitcoin project tests the limits of cringe by building $600,000 statue of Elon Musk and delivering it to Tesla HQ

A large silver statue of Elon Musk's head, atop a rocket shaped structure. The sculpture is on the back of a flatbed truck.Elon Musk statue (attribution)
A shitcoin project desperate for the kind of pump that sometimes occurs when Elon Musk tweets about a cryptocurrency has gone to new lengths to get his attention. The group spent $600,000 and six months on a six-ton statue that's supposed to be Elon Musk's head on a rocket ship, but looks rather like a giant Elon Musk caterpillar.

The group then delivered the sculpture to Tesla HQ in Austin, Texas, and is reportedly refusing to leave until he accepts the statue. Unfortunately he may be too busy burning Twitter to the ground to have noticed.

Despite receiving press coverage in outlets including the Wall Street Journal, Fox Business, and USA Today, the project has as of yet failed to achieve much of a pump, and the token is trading around where it was several months ago. I've not named the token here in the hopes of not contributing to the goals of their viral marketing stunt.

150 companies seek Binance's bailout for organizations "facing significant, short term, financial difficulties"

On November 14, CZ of Binance announced an "industry recovery fund", which he said would devote money to ending "further cascading negative effects of FTX [and] help projects who are otherwise strong, but in a liquidity crisis".

In a blog post outlining the $1 billion initiative, Binance also divulged that "we have already received around 150 applications from companies seeking support under the [Industry Recovery Initiative]"—only a week and a half after it was announced.

Lemon Cash crypto exchange lays off almost 40% of its staff

The Argentinean cryptocurrency exchange Lemon Cash announced that they had laid off 38% of their employees, or around 100 people. The CEO blamed the international crypto environment, as well as a "recessionary period" in startup investments. He also urged that the announcement was not related to the FTX collapse, and explained that although the company had user funds stored with FTX, they withdrew them prior to FTX halting withdrawals.

Lemon had closed a $44.1 million series A funding round earlier this year, which they kicked off in July 2021.

Users unable to withdraw from CoinList due to protracted "technical difficulties"

Beginning in mid-November, users of the CoinList exchange and ICO platform reported that they couldn't withdraw assets from the platform. On November 24, CoinList tweeted, "There is a lot of FUD going around that we would like to address head on. CoinList is not insolvent, illiquid, or near bankruptcy. We are experiencing technical issues that are affecting deposits and withdrawals." This was not entirely reassuring, given the number of companies in the crypto industry who have announced they were just fine before being revealed to be deeply underwater.

CoinList lost $35 million in the June Three Arrows blowup. Shortly after the FTX collapse, CoinList claimed to have "no material exposure to FTX, FTT, Alameda or any credit exposure to any affiliate of FTX". However, they stopped processing withdrawals shortly after.

Iris Energy defaults on $100 million+ loan, unplugs miners

After announcing earlier in the month that they were close to defaulting on a $100 million+ loan, Iris Energy has defaulted. Unable to pay the $7 million/month in debt obligations with their $2 million/month gross profit, Iris Energy has powered off 3.6 EH/s worth of mining capacity.

Iris Energy's stock has plummeted to $1.66, down 93% from its $24.80 peak when the stock first began trading a year ago.

New York institutes two-year ban on new crypto-mining operations at fossil fuel plants

An aerial photo of a power plant, with trees and a lake in the backgroundGreenidge Generation in upstate New York (attribution)
Governor Kathy Hochul signed legislation to ban for two years the issuance of permits to new crypto-mining operations at fossil fuel plants. This seeks to cut down on the enormous energy costs of proof-of-work crypto-mining used for cryptocurrencies such as Bitcoin.

New York has been the home of some battles against crypto-miners who have set up shop at dormant fossil fuel plants. The Greenidge Bitcoin mining operation near Seneca Lake has been the locus of some particularly bitter battles against the industry: a dormant coal power plant that was converted to natural gas and devoted to Bitcoin mining in 2019, its permit renewals have been the focus of fierce protests. It will not be affected by this particular legislation, which only bans mining operations who have not already submitted applications for new or renewed permits.

Genesis warns of bankruptcy if it can't raise $1 billion

Genesis Global Trading has reportedly been telling investors that Genesis may need to file for bankruptcy if its attempts to raise at least $1 billion in new capital don't succeed. The firm revealed its exposure to FTX last week, halting withdrawals from its lending service and acknowledging that its derivatives arm has $175 million in funds locked in the bankrupt exchange.

The Wall Street Journal then reported that Genesis had been seeking a $1 billion emergency loan due to a "liquidity crunch due to certain illiquid assets on its balance sheet".

The halting of withdrawals from Genesis' lending business has already had major downstream impacts, as it is a major partner of other crypto lending services. Gemini and Coinhouse both followed Genesis in suspending withdrawals, as did other firms including Donut and GOPAX.

A Genesis bankruptcy would be a monumental event in crypto, with enormous downstream exposure.

Grayscale Bitcoin Trust suffers due to FTX collapse and doubts over reserves

Chart showing the premium/discount of the GBTC fund. The fund started at a premium of over 60% in 2017, and traded at a premium before crossing into a discount in early 2021. The discount has continued to grow since, and has recently dipped to 45%GBTC discount or premium (attribution)
Grayscale Bitcoin Trust (GBTC), the largest publicly traded crypto fund, hit record lows in the wake of the FTX collapse. The fund was trading at nearly a 50% discount on the underlying Bitcoin asset, as holders rushed to sell off their GBTC holdings.

This was not helped by Grayscale's response to those in crypto who were pushing Grayscale to follow suit with some other crypto platforms and publish proof of reserves. Grayscale announced that "due to security concerns, we do not make such on-chain wallet information and confirmation information publicly available through a cryptographic Proof-of-Reserve, or other advanced cryptographic accounting procedure". They did not elaborate on what these "security concerns" might be, and stoked fears in some that the company might not have the backing they ought to have.

Grayscale published a letter from Coinbase that basically said "we have Grayscale's assets, we promise", which did not seem to assuage the fears that have formed around centralized entities promising they have the assets they claim. This is understandable, given that FTX made similar promises, only to collapse.

Coinhouse suspends "savings accounts" due to Genesis suspension due to FTX collapse

The French crypto broker Coinhouse announced that they would be suspending withdrawals from their crypto "savings account" product. Coinhouse partners with Genesis to offer the service, and Genesis recently suspended their service due to the FTX collapse. As a result, services that relied on Genesis, including Gemini and now Coinhouse, are halting their own services as the dominoes continue to fall.

No JavaScript? That's cool too! Check out the Web 1.0 version of the site to see more entries.