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Digital Currency Group missed a $630 million payment it was meant to shell out to its subsidiary Genesis Global Capital earlier this month, according to a May 19 update to clients shared by crypto exchange Gemini. 

A creditor to Barry Silbert’s DCG, Gemini said that it is currently working with Genesis and other creditor groups to provide forbearance to DCG to avoid a default. 

DCG — one of the several victims of the credit crisis that swept crypto in 2022 — has been in negotiations with creditors of Genesis Capital, which filed for bankruptcy protection in January. Gemini, which lent customer funds to Genesis as part of its retail high-yield Earn program, has threatened to file a lawsuit against Silbert and DCG.

In total, DCG’s Genesis owes Gemini $900 million. At the beginning of May, Gemini said that DCG was at risk of default if a $630 million debt payment was not made to Genesis’s bankruptcy estate

In Gemini’s latest update, the firm says that if a deal can’t be reached then it will work with Genesis to “to suggest terms for an amended plan of reorganization that could be advanced without DCG’s consensual participation.”

Gemini filed a motion with the bankruptcy court to propose a new reorganization plan which would not require the approval of DCG. 

As per DCG’s last update, the firm is currently in discussions with “capital providers for growth capital and to refinance its outstanding inter company obligations with Genesis.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Tighter price ranges result from markets running into competing influences. Eventually, some narratives take the back seat, paving the way for a volatility explosion.

Wintermute and Cumberland-backed Mangrove plans a mainnet launch of its programmable order book DEX in early June.

Gemini says it is working with Genesis, DCG, and creditors to provide forbearance to DCG in order to avoid a default.

The proposal would revert Tornado Cash’s governance back to token holders, but not everyone in the community agrees that it’s a benevolent plan.

ALSO: Crypto companies and trade organization are spending a fraction of the amount that other industries are allocating for lobbying. That may change.

Marathon CEO Fred Thiel tells CoinDesk in an interview that he wants to make sure development and maintenance of the open-source Bitcoin Core client software are “properly funded.”

U.S. President Joe Biden said he’s keen to strike a deal with lawmakers that would avoid his government from defaulting on its debt obligations but that doesn’t mean he’s willing to ink an agreement friendly to “crypto traders.”

“I’m not going to agree to a deal that protects wealthy tax cheats and crypto traders while putting food assistance at risk [for Americans],” Biden said during the final day of G7 talks in Japan.

This is not the first time in recent weeks that Biden has chosen to take a shot at cryptocurrency investors amid a looming budget crisis. Less than two weeks ago the president took to Twitter to address closing tax loopholes for “wealthy crypto investors.”

Without a new budget deal the U.S. could run out of cash as soon as June 1.

Crypto has clearly been on the president’s mind as he seeks a bipartisan deal that would avoid a potentially catastrophic default. Biden’s proposed budget for next year suggests changing tax policies related to “wash sales” of digital assets, which would eliminate deductions on losses incurred from selling and quickly repurchasing the same or similar crypto investment.

Biden’s budget has floated a 30% tax on energy used in crypto mining operations. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

An attacker managed to get a malicious proposal passed by the Tornado Cash DAO, one that handed them complete control over its governance system.

Tornado Cash is the crypto mixing service that runs on Ethereum and was sanctioned by the U.S. Treasury. Its governance system controls upgrades to the protocol and is run by those holding the project’s native TORN tokens.

The governance system approved on May 20 an upgrade that was purportedly the same as a previous upgrade that had passed. Yet that wasn’t true as the attacker had added an extra function, according to a pseudonymous security researcher known as Samczsun on Twitter. Once the upgrade was passed, the attacker used this function to hand themselves an extra 1.2 million votes, giving them effective control over the entire governance system.

The attacker has already used this control to their advantage. Straight away, they withdrew 10,000 votes in the form of TORN tokens and sold them all for $25,600. Then they drained the remainder of the locked votes, Samczsun said.

In total, 483,000 TORN was taken from the vault, according to on-chain analyst EmberCN. They claimed 6,000 TORN was deposited on crypto exchange Bitrue, that 379,000 was sold on-chain for $680,000 of ether and just under 100,000 TORN remains under the attacker’s control.

Binance said it would stop deposits and withdrawals of TORN, according to Wu Blockchain, while Justin Sun said on Twitter that deposits and withdrawals of the token remain open on Huobi.

Samczsun noted that with the control over the governance system, the attacker can drain all of the tokens in the governance contract and effectively stop the router from working, a core part of how the protocol operates. On the flip side, the reseacher noted that the attacker isn’t able to drain the funds that are held within the protocol — such as ether that’s being used for mixing — except for one pool on Gnosis Chain, which is upgradeable.

The price of TORN fell from a high of $7.3 yesterday to as low as $3.75 today. It has since rebounded to $4.60.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

A malicious proposal allowed an unidentified attacker to take over Tornado Cash, opening up the floodgates to a potential treasury drain.