The three biggest crypto stories from the past week

Finance firms • January 14, 2023, 8:31AM EST

Quick Take

This week we saw Gemini continue to face off with Digital Currency Group, FTX’s new leadership said it located $5 billion of assets and bitcoin rallied.

Crypto is never short for news. This week we've seen Gemini continue to face off with Digital Currency Group, FTX's new leadership said it located $5 billion of assets and crypto prices rallied.

DCG vs. Gemini continues

Gemini President Cameron Winklevoss and DCG CEO Barry Silbert traded open letters on Twitter this week as their feud heated up.

Crypto exchange Gemini's yield program has been frozen since Genesis's lending unit temporarily halted redemptions after the collapses of FTX and crypto hedge fund Three Arrows Capital. Since then, relations between Silbert and Winklevoss have soured.

On Jan. 10, Gemini's Winklevoss demanded the removal of Silbert in an open letter, alleging that Genesis and its parent company DCG defrauded Gemini and users of its Earn program.

Notably, the letter laid out a list of accusations involving DCG and failed crypto hedge fund Three Arrows Capital (3AC). In the letter, Winklevoss claimed that Genesis lended "recklessly" to 3AC because the crypto hedge fund was using the cash for its Grayscale net asset value trade. He said that the money helped balloon the AUM of the Grayscale Bitcoin Trust and thus the fees earned by its sponsor, another DCG subsidiary.

It didn't take long for Silbert to release his own open letter, in which he rebutted the list of accusations made by Winklevoss. He also claimed that DCG never co-mingled funds with any of its subsidiaries, as suggested by the Gemini president in early January. Silbert did concede that Genesis had a "trading and lending relationship" with the collapsed crypto hedge fund that later defaulted on its loans.

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Shortly after Silbert's letter was released, Gemini terminated its loan agreements with Genesis Global Capital and officially ended its Earn program.

FTX finds $5 billion

Collapsed crypto exchange FTX located $5 billion in assets this week, tied up in cash and liquid crypto. FTX attorney Andy Dietderich said during a bankruptcy court hearing in Delaware on Wednesday morning that the firm had located the assets.

Currently, FTX's new leadership is prioritizing the sale of four of its entities: LedgerX, Embed, FTX Japan and FTX Europe.

While names of major equity holders in FTX, including venture capitalist Peter Thiel and celebrities Tom Brady and Kevin O'Leary have become public in court, Judge John Dorsey decided to keep most customer and creditor names private for at least three more months.

Crypto says new year, new me

Rather than plummeting in price, cryptocurrencies began trading higher during the tail end of the week. Underpinned by heightened activity in the digital asset futures market, the price of Bitcoin was trading at $20,692 at 6:35 a.m. ET Saturday.

Elsewhere, Solana was trading up more than 30% over the last 24 hours, while ether was trading up 7.7%. Crypto's rally is also tracking with upticks in traditional U.S. markets, notably the S&P 500 and Nasdaq.

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.

About Author

Tom is a deals reporter at The Block covering venture capital, fundraises, fintech and M&A. Before joining, he was an editorial intern at the FT-backed platform Sifted where he reported on neobanks, payment firms and blockchain startups. You can reach him by email at [email protected] or Telegram @tommatsuda.