The biggest crypto news and ideas of the day |
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Hello and welcome to The Node. This is Daniel Kuhn and Xinyi Luo, here to take you through the latest in crypto news and why it matters. In today's newsletter: |
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Genesis Lending Unit Halts Customer Withdrawals in FTX's Wake: The lending arm of crypto investment bank Genesis Global Trading is suspending redemptions and new loan originations following the collapse of FTX. Last week, Genesis disclosed that its derivatives unit had about $175 million in locked funds in its FTX trading account. The firm had $2.8 billion active loans in Q3. - "This decision impacts the lending business at Genesis and does not affect Genesis's trading or custody businesses," Digital Currency Group's Communications VP Amanda Cowie said. Last week, DCG (which owns CoinDesk and Genesis) injected $140 million to backstop losses made in the lending division.
- Meanwhile, crypto lender BlockFi is preparing a potential bankruptcy filing due to its "significant exposure" to FTX, according to the Wall Street Journal, while bankrupt crypto lender Celsius Network told a court Tuesday it had $12 million in outstanding loans to Alameda Research, the trading wing of Sam Bankman-Fried's crypto empire.
FTX's Bahamas Arm Files for Bankruptcy in US: FTX Digital Markets (FDM), the Bahamas arm of the now defunct crypto exchange, has filed for Chapter 15 bankruptcy proceedings in New York, days after the rest of the organization filed for Chapter 11 reorganization. The latest legal maneuver may face challenges considering FDM was set up to distance SBF's empire from U.S. markets, and so may not have jurisdiction. Big Banks, NY Fed Start to Test Digital Tokens for 'Wholesale' Transactions: The Federal Reserve Bank of New York is leading a program to test the use of a "digital dollar" to improve settlement between institutions. Citigroup, HSBC, BNY Mellon, Wells Fargo and Mastercard are among the participants in the central bank digital currency (CBDC) pilot. |
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Putting the news into perspective |
(Photo courtesy Bureau of Prisons/Getty Images) The FTX Blow Up Looks a Lot Like Enron The collapse of FTX will likely go down in history as one of the largest financial frauds ever, but it's a story we've seen before, David Z. Morris writes. There are striking similarities to Enron – the Texas-based energy company that cooked its books, erected shell companies and played games with its stock – and the relationship between FTX and Alameda Research. In particular, Morris notes, is how both firms made liberal use of an equity-like asset – the FTT token and ENE stock, to be precise. Read the full story here. |
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As the fallout from FTX's collapse cascades across crypto markets, how can you minimize your crypto tax burden and stay above water? For Tax Week presented by Koinly, CoinDesk presents a series of guides, features and interviews covering practical tax questions. Use Your Crypto Losses to Turn the Tables Against the IRS If you're a high earner or someone who lives in a high-tax state, you should look into tax-loss harvesting. You may be able to save up to 50% on your capital gains tax bill. Crypto Can De-Escalate the Tax War The transparency and immutability of blockchain transactions could allow for tax assessment and collection to be vastly more efficient than the status quo. |
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Overheard on CoinDesk TV... |
"[FTX's collapse] created all kinds of obstacles to regulation." – Former SEC Enforcement Branch Chief Lisa Braganca, discussing regulation for the crypto industry following FTX's collapse, on CoinDesk TV's "First Mover" |
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- Special Report: FTX's Bankman-Fried begged for a rescue even as he revealed huge holes in firm's books (Reuters)
- FTX's Digital Coin Was at Heart of Crypto Exchange's Fall (WSJ)
- The Curious Case of FTX's 'Company Therapist' (VICE)
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Genesis Lending Unit Halts Customer Withdrawals