🗓💊 FTX Wounded Warriors: Silvergate Bank
Daily Bullets - Thursday, March 9th
Today’s newsletter is 1531 words, a cool 5-1/2 minute read.
The crypto market is looking red out there! Bitcoin continues sliding and has now reached ~$21k with ETH struggling to hold $1500. All on the back of Silvergate collapsing and continued regulatory uncertainty.
All of this has pushed the total crypto market cap back under $1T. Rough stuff.
What time do you prefer to receive this newsletter?
Today we’re looking at:
- 🏥🤕 FTX Wounded Warriors: Silvergate Bank
- 🤡💩 3AC Co-Founders Are Back
- 🌋🆒 Mt. Gox Ain’t Selling! (Rumor)
- ✅ Daily Bullets
- 📊 Market Dashboard
- 📚 Research/Reads
- 📝 Good Tweets
Twitter Space Announcement
Biden's new proposed budget to include doubling capital gains tax and looking to end ways of tax loss harvesting. What does this mean for you? We’re hosting a Twitter space with Koinly to break down this and so much more you need to be aware of this tax season. Set a reminder and join.
@koinly is joining @0x_illuminati to run down the tax strategies you need to be aware of to save money and avoid penalties this tax season
Save yourself the headache and join the conversation
🗓 Thu March 9th 2023
⏰ 6 PM EST (11 PM UTC)
— M6 Labs (@M6Labs)
Mar 8, 2023
🏥🤕 FTX Wounded Warriors: Silvergate Bank
Quick Take: Silvergate Capital Corporation will wind down operations and voluntarily liquidate Silvergate Bank, one of crypto's most prominent banks.
- Silvergate provided banking services to crypto companies since 2013 and launched its own settlement tool
- Cites recent industry and regulatory developments
- Liquidation plan includes full repayment of all deposits
- Appears to be the first major bank collapse since October 2020 and possibly the largest bank to fail since 2009
Significance: Silvergate's ties to FTX and Alameda Research have been a cause for concern and their collapse raises questions about how the sector will be regulated, how crypto firms will access the banking system, and the challenges for new startups.
It’s getting tougher for crypto companies to bank and banks may be hesitant to work with crypto companies due to the increased compliance costs and more frequent bank regulator checks.
People will start to feel the pain if more fiat on and off ramps start shutting down.
🤡💩 3AC Co-Founders Are Back
Quick Take: Coinflex rebranded to Open Exchange (OPNX) following the approval of its restructuring plan and is the latest play of Kyle Davies and Su Zhu, the founders of Three Arrows Capital.
- Intended to tokenize bankruptcy claims and trade derivatives related to funds stuck on failed exchanges (FTX)
- Leslie Lamb appointed as new CEO
- Intends to acquire CoinFLEX's assets, including the FLEX token, which will become the exchange token
- Users can trade perpetual futures using their bankruptcy tokens as collateral, but direct lending and borrowing are not allowed
- U.S. citizens are excluded from the platform, and participants must pass KYC requirements
- Raised $25M in seed money
- Over 20M people affected by crypto bankruptcies, with an estimated $20B owed
Significance: The basic idea here is “we screwed many of you hard but now you can trade and degen your bankruptcy claims on our new grift”
This was honestly inevitable. You could smell it coming a mile away. Crypto is filled with grifters who know that people have the memory of a goldfish and with a little time, redemption arcs can be mounted.
The 3AC founders have infamy status (similar to Do Kwon and SBF) - why wouldn’t they use that powerful command over the attention economy to start a new venture. Screwed up too hard? Doesn’t seem to be a thing in crypto.
🌋🆒 Mt. Gox Ain’t Selling! (Rumor)
Quick Take: The largest creditor of Mt. Gox plans to hold, rather than sell, their recovered Bitcoin due to be disbursed to it this year.
- The Mt. Gox Investment Fund purchased claims against the bankrupt digital-asset platform and chose an early payout in September instead of waiting for all litigation to be resolved
- Will receive 90% of what's collectible in a ratio of roughly 70% Bitcoin and 30% cash
- Mt. Gox creditors now have until April 6 to decide whether to choose the September payout or wait longer to recover a higher percentage of their claims
Significance: We want to be on alert for any sign that Bitcoin sell pressure may hit the market. Whether this comes in the form of creditors receiving assets they’ve waited years to receive and dumping on the open market or major crypto banks failing.
You should always try and be aware of what both potential buyers and sellers are up to. The fact that a good chunk of creditors are claiming they won’t be liquidating their holdings is promising.
✅ Daily Bullets
- Silvergate Bank will halt operations and undergo liquidation
- Biden's proposed budget to include closing tax loss harvesting and double capital gains
- Mt. Gox registration and repayment deadlines postponed to April 6
- Bankrupt Mt. Gox’s largest creditor, Mt Gox Investment Fund, plans to keep returned Bitcoin
- Coinflex rebranding to Open Exchange (OPNX), 3AC co-founder’s latest crypto venture
- Gemini refutes claim JPMorgan is ending banking relationship
- Bitcoin miner Marathon Digital terminates credit facility with crypto bank Silvergate
- Coinbase introduces Wallet-as-a-Service product to simplify web3 onboarding
- Binance may become the first global crypto exchange to enter the Korean compliance market
- 10k Yuga Labs Otherdeed NFT holders to participate in 2nd gamified test of Otherside platform
- Planet Hollywood deal with Animoca Brands to launch NFT club in L.A.
📰 Crypto News
- FTX reaches $45M deal to sell interest in Sequoia to Abu Dhabi's investment arm
- Celsius Network has exclusive right to prepare for exiting bankruptcy until the end of March
- Airbit Club founders and executives plead guilty to $100M fraud scheme
- BitMEX co-founder Arthur Hayes proposed Bitcoin-based stablecoin
- Voyager agreement to reserve $445M after Alameda suit may decrease customer recoveries
- Celsius allocates $25M for withdrawals and burns $500M in WBTC
- Germany's finance watchdog hasn’t found any NFTs that can be classified as a security
- Gate.io launching Visa crypto debit card in Europe
- Bitstamp US partners with Prove Identity to offer document-free, rapid onboarding
- Vitalik Buterin donated $15M for research into airborne pathogens
- MAYC characters enlisted as villains for Dungeons & Dragons Web3 Game 'The Glimmering'
- Immutable makes C-suite hires from Meta, Ava Labs
- Bitget became the official sponsor of the Italian Juventus women's football team
- UK FCA tightens control on unregistered crypto ATMs
- Parataxis Capital new fund with a long/short relative value trading strategy and $25M to $50M
- DeFi platform Maverick Protocol unveiled its Uniswap rival DEX with Lido integration
- Goerli is moving to Shapella
- Trader Joe live on BNB Chain & updates to sJOE staking
- Lido proposal to sunset on Polkadot and Kusama liquid staking protocols
- Balancer proposal to deploy on Avalanche
- Cardano’s DeFi TVL touches new all-time high of $341M
- Gearbox V3 launching Q2, 2023
- Iron Bank unpaused Alpha Homora’s accounts on Optimism, Avalanche and Fantom
- NFT collection Quadratic Funding - Vitalik Buterin hand-signed documents
- Mirror introduces Subscribe to Mint
- Instadapp launches Avocado - next-gen smart contract wallet
- Code Canvas will allow creators and collectors to mint and trade generative art NFTs on Solana
- Stargate Finance will be delisted by Coinbase ahead of the platform's migration to version 2
- Ceramic releases tool that awakens its ‘storage for web3’ protocol
- SpiritSwap to introduce concentrated liquidity
- Numoen V1.0 live on Celo and Arbitrum
- Whitehole Finance testnet is now live
- Introducing Polynomial Power Perps (P³)
- Introducing Escher, a platform for the fine art edition landscape
- Introducing viem – a TypeScript Interface for Ethereum
📊 Market Dashboard
Chart of the Day - CME FedWatch Tool
- Market is currently pricing in a ~ 76% probability of the Fed raising interest rates by 50 bps at the next FOMC meeting. Oh how the turn tables. Not too long ago the market was Confident the Fed was going to pivot.
- Don’t Fund Long-duration Assets with Fickle Crypto Deposits | Silvergate Capital: Fall from Grace - source
- A Step-by-Step Timeline | The History of Bitcoin NFTs - source
- 50% or even 100% + in annualized returns without directional market exposure? | Can you run a profitable delta-neutral strategy fully on-chain using perpetuals? - source
- DeSci - permissionless capital formation for scientific research | The Future Of Medicine Is Tokens - source
- Overview of blockchain nodes | Light nodes and their benefits - source
📝 Good Tweets
HIEN TOKYO with an overview of the NFTFi ecosystem
1/ General landscape of #NFTFi
#NFT is gaining popularity and is simple for users to understand. I believe #NFTFi will be a major trend, similar to #DeFi summer.
A deep-dive thread about #NFTFi👇🧵
— HIEN TOKYO | Researcher (@Hienfromvn)
Mar 8, 2023
Airdrop Official - Despite Coinbase confirming no plans for a token, degens will do degen things
🧵 Testnet Guide: Base Layer 2
There is no confirmation of a native token or airdrop for that matter, as it's built on the Optimism stack, which already has a native $OP token.
But, let's not miss out on future benefits and try it early on👇
— Airdrop Official (@its_airdrop)
Mar 8, 2023
Thor Hartvigsen covering the most shillable projects in the next few months
30 protocols with strong catalysts in the coming months⚡️
Bookmark this list🧵
— Thor⚡️Hartvigsen (@ThorHartvigsen)
Mar 9, 2023
What should we cover more of?