Last week was relatively quiet in the crypto world, but there were still some key developments.
Chief among them was the collapse of Galaxy Digital’s planned acquisition of BitGo, which may lead to a messy lawsuit. There were also several important hires and exits. Plus, FDIC issued FTX a cease-and-desist order.
Galaxy and BitGo deal falls apart
At the start of the week, Galaxy said it was terminating its long-awaited acquisition of crypto custodian BitGo. It claimed that BitGo had failed to deliver audited financial statements for 2021 within the requirements of its agreement. It also said that no termination fee would be payable.
BitGo saw it differently. It's lawyer said blaming the fallout on BitGo was “absurd.” The company remained defiant, saying that it intends to take legal action, either seeking a stated $100 million break fee or more in damages.
Big hires and fires
Let’s start with the good news. Adam White, former president and COO of bitcoin custody provider Bakkt, has joined Blackstone as a senior adviser. He will help the firm and its portfolio companies' executives understand and think critically about the crypto world. This comes just after BlackRock — which originally launched under the Blackstone umbrella — pushes further into the crypto space through a partnership with Coinbase and the launch of a bitcoin-focused trust fund.
On top of this, Arbitrum has hired its first chief marketing officer. Andrew Saunders, former head of Amazon’s global brand marketing team, will lead and oversee all marketing and communications efforts worldwide. This comes shortly after Arbitrum's launch of Arbitrum Nova, a chain focused on scalability for gaming and social applications.
Now for the bad. In July it was revealed that Genesis lent $2.36 billion to now-bankrupt firm Three Arrows Capital, a move that resulted in a claim for $1.1 billion of assets. Genesis CEO Michael Moro stepped down last week to make way for new leadership. The company is also cutting 20% of its staff.
FDIC Vs FTX
On Friday, the Federal Deposit Insurance Corporation (FDIC) issued cease-and-desist letters to FTX US and four other crypto companies for allegedly making "false and misleading statements" about federal deposit insurance, wrote Aislinn Keely.
The key issue was over statements that said FTX US deposits were held in FDIC-insured accounts. The FDIC said these statements implied that the crypto products and services were themselves insured — which it said was not the case.
The letter directs FTX US to immediately remove any and all statements that suggest the exchange and any funds deposited with it are FDIC-insured.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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