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The Treasury is still adamant it will regulate digital assets like financial services but its plans will rely on parliamentary support.

Some $2 million worth of NFTs have been exchanged in the past 24 hours.

Exchange blames third-party payment providers, and says that credit as well as debit cards can still be used.

The team overseeing the bankruptcy of FTX, Alameda Research and the over 100 other companies affiliated with Sam Bankman-Fried’s failed business empire are suing the former FTX CEO, FTX co-founder Gary Wang, and former FTX senior executive Nishad Singh over what they say was a wildly overpriced acquisition just weeks before the exchange’s implosion.

In a suit filed in U.S. Bankruptcy Court for the District of Delaware on Wednesday, FTX’s current leadership claims that Bankman-Fried and other executives knew that Alameda Research, the investment fund also owned by Bankman-Fried, was insolvent when it finalized a nearly $250 million deal to buy stock clearing platform Embed. 

The lawsuit claims that Bankman-Fried and others knowingly used fraudulent funds taken from FTX customers for Alameda’s acquisition of the company. On top of targeting former FTX/Alameda leadership, separate suits also seek to claw back funds from Embed’s founder and former CEO Michael Giles, as well as early investors who sold their stakes to Bankman-Fried and company, including Propel Venture Partners, a venture capital firm that has backed several other notable tech startups, including Coinbase and Docusign. 

Unlike Bankman-Fried and others, Giles and Embed shareholders named in a parallel separate suit are not accused of criminal wrongdoing. 

Lawyers representing the failed FTX crypto empire want to claw back money on the grounds that Alameda was already insolvent when it finalized the deal in late September, and that the investment fund and sister company West Realm Shires, also controlled by Bankman-Fried, paid an inflated price for Embed. The suits are an attempt to maximize pay back to FTX and Alameda’s own creditors within the bankruptcy process. 

Allegedly terrible deal

Aside from allegations of fraud and self-dealing using customer funds – also alleged in criminal proceedings brought by U.S. prosecutors – FTX’s bankruptcy stewards also accuse Bankman-Fried and company of making a terrible deal. Lawyers representing FTX in the bankruptcy process put Embed up for bidding but now say that the platform is near-worthless compared to what Bankman-Fried and company paid for it. 

On June 27, after the acquisition was agreed to but had not been finalized, two senior employees noted in internal messages quoted in the filing that “Embed platform’s inability to handle approximately 600 new user accounts as part of the gradual release of FTX Stocks,” though a release plan called for Embed to handle 10,000 new accounts. 

The company had approximately $37 million in assets and made $25,000 profit as of March 31, 2022, the filing claims. 

On top of that the company gave Embed’s founder and CEO, named in a separate suit along with other equity holders who sold their stakes to Alameda, a $55 million retention bonus, to be paid in five installments beginning on Sept. 30, 2022, that did not require him to stay with the company past deal closing. 

‘Almost no due diligence’

“They performed almost no due diligence on Embed and accepted the significant terms proposed by Giles, Embed’s founder, CEO, and sole representative during the negotiation, who personally received approximately $157 million in connection with the acquisition,” FTX bankruptcy lawyers argue. “As a consequence, WRS paid far more than fair or reasonably equivalent value for Embed, and awarded Giles an extravagant and unwarranted retention bonus as an incentive to complete the acquisition quickly.”

FTX’s bankruptcy representatives argue that the retention bonus was an “unusual arrangement” because it only tied Giles to Embed through the closing of the deal, rather than keeping him on to run the company afterwards. He also received over $100 million for his equity as Embed’s largest shareholder. 

In communications between Embed employees, included as part of the lawsuit filing, two of them note the speed that Alameda hoped to close the deal while talking about whether they needed to prep for any sort of due diligence around the purchase. 

“I get a sense that they are [cowboy emoji] over there[.],” replied one. 

‘Essentially worthless’

FTX’s lawyers say that after trying to sell the company only months after the acquisition of Embed, no one wants to buy it for anywhere near what Bankman-Fried and others paid for it.  

Giles himself submitted the highest bid during a process held earlier this year, seeking to buy back the company for $1 million “subject to potential reductions at closing.” 

Giles did not immediately respond to a request for comment. 

“The result of the bidding process—including Giles’ own bid of $1 million, or 0.45% of the purchase price that WRS had paid just a few months before—leaves no doubt that the $220 million paid by WRS to acquire Embed was wildly inflated relative to the company’s fair value, which Giles well knew,” lawyers representing FTX’s caretaker leadership argue in the suit. “The bidders had figured out what the FTX Group and FTXInsiders did not bother to assess prior to the Embed acquisition, namely, that Embed’s vaunted software platform was essentially worthless.”

© 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.

PLUS: We really need to see the Hinman emails.

To bring crypto into the mainstream, you need to have fun…shower and be generally presentable… and dress like a wizard. Oh, and then send bitcoin to the moon.

Those were among the ideas batted around at the Bitcoin Builders Conference in Miami today, ahead of the Bitcoin 2023 Conference.

“People in crypto are not the most hygienic, I don’t know why,” Udi Wertheimer, co-founder of Taproot Wizards, said jokingly. “It’s just not always a very good experience to be next to crypto people. So we thought it’s time to fix it. If we want to go mainstream and we want people to adopt crypto, we need to be presentable. We were like, ok, let’s get people to take showers and we asked people, in order to get into the Taproot Wizard community, we asked them to take a shower, wearing a wizard costume.”

Ordinals and BRC-20 were the talk of the event, with attendees saying new developments can bring some of the fun back that had some people turn to other blockchains over recent years.

Fun is also a good way to go mainstream, enthusiasts agreed. The crypto industry is also eager to find new adopters amid a slide in interest, with cryptocurrency prices nowhere near their 2021 highs and the industry digesting a spectacular parade of corporate collapses.

The Block’s George Calle, Meltem Demirors, chief strategy officer at Coinshares, Muneeb Ali, CEO Trust Machines

Ordinals recently led costs to spike and concerned some over the cluttering of the blockchain.

There were also very serious discussions at the Bitcoin Builders event, where panels included chats about rollups and ZK proofs.

Aubrey Strobel, host of the Aubservation, Udi Wertheimer, co-founder of Taproot Wizards, Joe Vezzani, co-founder & CEO of LunarCrush, Danny Yang, founder, OnChainMonkey,

Wizards in the shower

Earlier this year, Taproot Wizards, an NFT collection, gave people the opportunity to complete quests to acquire a Taproot Wizard. One included dressing up as a wizard and filming yourself in the shower.

Wertheimer, speaking on a panel, estimated they received about 4,000 submissions.

“I actually really like what’s happening with Taproot Wizards and BRC-20s,” said Meltem Demirors, chief strategy officer at Coinshares. “There are all these incredible things that are happening that are driven by people having fun, and it’s funny, yesterday, someone asked me, what’s it going to take to get a dramatic leap forward in Bitcoin adoption? And I said, ‘Honestly, it’s probably going to be something silly that looks and feels like a toy, that makes people feel like Bitcoin is fun.’”

“Bitcoin’s becoming fun again. We’ve got people taking showers fully dressed to try to get a Taproot Wizards,” Demirors said on a panel.

Joe Vezzani, co-founder & CEO of LunarCrush, agreed.

“It’s all about fun,” he said. What’s his project? He’s sending bitcoin to the moon in the form of an address carved into a lunar rover “about the size of a dog.”

The question is: Chihuahua or Great Dane?

© 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.

The conversation was initiated to promote more decentralization within the dYdX ecosystem ahead of its v4 upgrade.

Bitcoin Frogs surpassed Bored Apes as the most traded non-fungible token collection during the last 24 hours, in what is a milestone for the upstart Ordinals market. The collection has generated more than $2 million in trading from nearly 700 transactions.

Comparatively, the Bored Ape Yacht Club, the most-valuable NFT collection in the world by market share, has ranked third during the last day with about $1.3 million in volume, the CryptoSlam! data also shows.

So far this month Bitcoin Frogs NFTs have registered $5.9 million in trading, according to CryptoSlam! data. The collection generated about $52,000 in trading in April.

Crypto Twitter has been quick to react to what seems like an historic, if not potentially short-lived, milestone.

“An ordinals collection just became the highest volume NFT collection across all chains for the first time,” @LeonidasNFT posted to Twitter. “Don’t sleep on Bitcoin,” the account with nearly 70,000 followers added.

Bitcoin Frogs are “10,000 unique frog collectibles minted directly on the Bitcoin Blockchain,” according to the collection’s Twitter account. On Discord, the collection is described as a “free-to-mint” project meant to “encourage adoption of Ordinals.”

© 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.

Failed crypto lender Voyager Digital could start liquidating on Friday, aiming to begin returning cash and crypto to customers by June 1. 

A bankruptcy court judge approved Voyager’s liquidation procedures during a hearing on Wednesday, 10 months after Voyager filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York 

“We are working with Voyager to go effective under the plan as soon as possible (as early as this Friday),” the Voyager Official Committee of Unsecured Creditors said on Twitter. “We are still working towards making initial distributions available no later than June 1.” 

Voyager’s liquidation comes after Binance.US pulled out of a court-approved deal to buy the firm’s assets last month. The plan included a liquidation “toggle” option in the event that Binance.US walked away, which Voyager then initiated. The deal had faced government scrutiny. Binance.US blamed the U.S. regulatory environment when it terminated the plan. 

Customers are expected to initially recover nearly 36% of their claim amounts, according to Voyager, although that percentage could eventually increase depending on the success of a claim dispute between Voyager and the failed crypto behemoth FTX. Voyager customers can receive their recoveries in cash, supported coins, or via USDC for unsupported coins and Voyager’s VGX token. 

© 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.

Amid climbing transaction fees and increased development activity, bitcoiners are warring over the future of the network. Is this a replay or a result of the so-called Blocksize Wars.