The world of cryptocurrencies continues to reap victims: on one side there is silvergate who communicated that he had suffered a real one hemorrhage of deposits, on the other there is genesis for which the theme of bankruptcy it gets closer. it's still theDomino effect which started with the bankruptcy of Ftx.
Silvergate: deposits have decreased by 8 billion. The stock loses 46%
silvergate, company that supplies financial infrastructure to the world of digital assets, announced yesterday that in 2022 the deposits are dropped from $11,9 billion to $3,8 billion (-68%) and announced the cut 200 employees, equal to 40% of its workforce. To meet customer withdrawals and raise cash, Silvergate sold $5,2 billion worth of debt at a loss of $718 million, which resulted in a 46% drop in the stock on the Stock Exchange.
La company charges capital flight to “una crisis of confidence throughout the ecosystem” crypto, which has led “many institutional traders to withdraw their money from these trading platforms”. In the last few years silvergate has grown from a small local financial institution into aleading cryptocurrency bank and was instrumental in provide services to Sam Bankman-Fried's empire, the founder of ftx. After the collapse of Sbf (now under house arrest thanks to a bail of 250 million dollars, pending a trial in which he will have to answer to 8 counts of accusation for which he however pleads not guilty) Silvergate has also ended up in the spotlight. In particular, some US senators have asked for clarification on his role in accepting deposits for Alameda Research, the Ftx trading company.
“In response to the rapid changes in the digital asset industry, we have taken adequate steps to ensure the maintenance of liquidity in order to meet the potential outflow of deposits and we maintain a cash position in excess of deposits linked to digital assets,” he said L'managing director Alan Lane, adding that the sector experienced a "significant over-leverage that started to unravel" last year, citing the collapse of companies such as Celsius, Voyager and Three Arrows Capital.
It was also disclosed that at the end of 2022, silvergate held $4,6 billion in cash and equivalent, "in excess" compared to $3,8 billion of deposits remaining, and $5,6 billion of debt guaranteed by US governments and agencies, which will be “in part” sold by the beginning of the year. Silvergate has finally interrupted the plans for the launch of a digital currency and stated that in the fourth quarter it will bear a burden of write-down of 196 million of dollars linked to blockchain payment assets purchased by Diem, the crypto payment project originally backed by Meta.
Genesis also reappears in the Ftx domain.
Genesis Global Trading, the crypto lending giant that is part of Barry Silbert's DCG galaxy, has laid off 30% of its staff and the Wall Street Journal has again reported rumors that it is considering filing for bankruptcy. The hypothesis had already emerged in November, shortly after the announcement of the bankruptcy of Ftx.
genesis is working with investment bank Moelis & Co. to evaluate options for the future, including a potential Chapter 11 filing. A Genesis spokeswoman said the firm was working with its advisors to preserve clients' assets and moving the business forward: “As we continue to face unprecedented challenges in the industry, Genesis has made the difficult decision to reduce the number of employees globally. These measures are part of our ongoing efforts to advance our business,” the spokeswoman said.
Genesis loans to Alameda Research and Three Arrows Capital
Genesis suffered heavy losses in relation to loans made to Alameda Research, the trading company of Sam Bankman Fried and the cryptocurrency hedge fund Three Arrows Capital: a $2,4 billion loan with 50% guarantee is known for the latter. Then both Alameda and Three Arrows filed for bankruptcy protection, and Genesis CEO Michael Moro resigned.
However, Genesis had the biggest problems in relation to the bankruptcy of Alameda Research, to which he is said to have lent several hundred million dollars. On November 16, Genesis stopped making new loans and stopped repayments. As a result, $900 million of client funds from Gemini, the cryptocurrency exchange of twins Cameron and Tyler Winklevoss became trapped in Genesis. Derar Islim, interim CEO of Genesis Global Trading, said in the past few hours that the company needs more time to resolve the financial crisis of its lending business.
Genesis is controlled by Digital Currency Group (DCG), a galaxy also featuring crypto asset manager Grayscale Investments, crypto industry news site CoinDesk, mining and staking firm Foundry, cryptocurrency exchange Luno, data platform TradeBlock, wealth management firm HQ and DCG Real Estate.
Dcg it is considered one of the three pillars of the crypto industry. The others are Binance, the world's largest crypto exchange headed by Changpeng Zhao, called CZ, e Tether, the most widely used stablecoin globally with a capitalization of $66,2 billion.
Bitcoin is still falling: a key support is approaching on the charts
Bitcoin price fell further today, breaking the psychological threshold of $16.000 at $15.925,43, down 0,41%. In the last month it has lost 2,41% and in the last six months it has lost 21,01%. According to the technical analysts, the breakup of threshold psychological of 16.000 is not so important, but the one just after and not far away becomes decisive of 15.600: from a graphical point of view, "the yielding of this threshold could provide a new bearish signal".
