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Crypto trading firm Cumberland and investment firm Mirana Ventures complained of inaccuracies in Genesis Global’s bankruptcy filing, describing it as “misleading and incorrect” and “sloppy.”

The lending arm of trading firm Genesis filed for Chapter 11 bankruptcy protection late Thursday. The filing included a list of its top 50 unsecured claims, totaling more than $3.6 billion. The claims feature several high-profile crypto firms, including $30 million owed to Plutus Lending, a division of the crypto platform Abra, and a $53 million to VanEck’s New Finance Income Fund.

The creditor contact for the fifth largest claim, Jonathan Allen, however, called the filing “sloppy” and full of inaccurate information. Allen, who is a managing partner for Mirana Ventures, is listed as the contact for the Mirana Corporation’s $151 million claim.

“Mirana Ventures is not a creditor and has no exposure to this. I have no connection to Mirana AM and much of the info including the amount is incorrect,” said Allen on Twitter, noting that Mirana Asset Management and Mirana Ventures are two separate entities under the Mirana investment arm. He declined to comment further when contacted by The Block.

Bybit connection

Sean Tan has been most recently listed as running Mirana Asset Management. It’s described as one of the largest proprietary digital asset portfolios globally. ByBit and Tan did not immediately respond to a request for comment.

Crypto exchange Bybit’s CEO Ben Zhou said on Twitter that Mirana is the investment arm of Bybit and that it only manages company assets. Mirana Ventures is listed online as a venture partner to Bybit and BitDAO. 

“Client fund is separated [and] Bybit earn product doesn’t use Mirana,” Zhou said. He also highlighted that around $120 million of the $151 million were collateralized positions that had been liquidated.

Genesis Global and its lawyers also did not immediately respond to a request for comment on the claims.

It was a similar story for trading firm Cumberland, who said the filing contained “misleading and incorrect” information. The firm said it paid down a Genesis loan from $18 million in November to just over $46,000 by surrendering its collateral. 

“We have established no further borrows from Genesis and have no additional exposure,” the firm said in a statement Friday.

© 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.

Bitcoin mining stocks tracked by The Block were higher on Friday, with 15 gaining and the other four declining.

Bitcoin rose 5.3% to $22,216 by market close.

Here is a look at how the individual miners performed today:

© 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 U.S. Securities and Exchange Commission charged Avraham Eisenberg, who is known as Mango Avi, with orchestrating an attack on Mango Markets and draining $116 million from the crypto trading platform. 

The SEC said Eisenberg manipulated the MNGO token, a governance token that the SEC said was offered and sold as a security. Eisenberg was arrested and detained in Puerto Rico and will be transported to appear before the Southern District of New York.

Eisenberg also faces charges from the Department of Justice and the Commodity Futures Trading Commission, as previously reported. 

Investigations into other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing, the agency said in a statement on Friday. Mango Markets is inoperative, the SEC said in the complaint. 

The SEC said beginning on Oct. 11, 2022, Eisenberg engaged in a scheme to steal about $116 million worth of crypto from the Mango Markets platform. Eisenberg allegedly used an account that he controlled on Mango Markets to sell a large number of crypto derivatives for MNGO tokens and used a separate account on the platform to buy those same derivatives.

Eisenberg then engaged in a series of large purchases of the thinly traded MNGO token to artificially raise the price of the MNGO token relative to the crypto USD Coin, the agency said.  

The price of MNGO crypto derivatives on Mango Markets increased as a result of those transactions. Eisenberg used the increased value of his MNGO derivatives position to borrow and withdraw about $116 million worth of various crypto from the platform — effectively draining all available assets from the Mango Markets platform, the SEC said.  

© 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.

Coinbase had its corporate family rating and guaranteed senior unsecured notes cut by Moody’s, with the ratings agency citing “challenging conditions in the crypto asset operating environment” for the downgrade. 

Coinbase’s outlook was listed as stable, driven by its “currently healthy liquidity position that is absorbing the ongoing cash flow drain the firm is experiencing,” Moody’s said, while also giving a nod to the company’s recent job cuts. 

Moody’s downgraded Coinbase’s corporate family rating to B2 from Ba3, while notes fell to B1 from Ba2. The move “reflects Coinbase’s substantially weakened revenue and cash flow generation capacity” as a result of the current state of the crypto market. 

Another factor contributing to the rating is uncertainty coming from possible regulatory changes following the collapse of FTX.

“A sudden tightening of regulations and related oversight could have a credit negative impact on Coinbase’s revenues as well as increase its cost base,” said Moody’s.

Path to upgrades

Coinbase could see upgrades to its ratings by way of increased regulatory clarity that doesn’t impact on the company’s bottom line if restructuring efforts result in reliable profitability, and if it diversifies into sustained non-transactional based revenue streams, said Moody’s.

However, if Coinbase’s liquid position rapidly declines, fails to return to healthy cash flow, encounters an unfavorable regulatory environment, or incurs significant regulatory penalties it could lead to additional rating downgrades by Moody’s.

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

© 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.

White shoe law firm Sullivan & Cromwell can represent FTX debtors in the trouble exchange’s bankruptcy case, a Delaware bankruptcy court judge ruled.

“There’s no evidence of any actual conflict here,” Judge John Dorsey said, overruling a pair of FTX customers who objected to the law firm’s role in the case over its previous work with the exchange.  

Court documents show FTX paid Sullivan & Cromwell $8.5 million for its work on 20 individual matters. FTX General Counsel Ryne Miller was previously a partner at Sullivan & Cromwell, and FTX lawyer Tim Wilson was also an associate at the law firm. 

Sullivan & Cromwell has said it will not investigate matters pertaining to itself or its former associates, and will instead allow another law firm to handle those issues.

Dan Friedberg, the former FTX compliance chief who was wrapped up in the Ultimate Bet poker scandal in 2008, filed a last-minute declaration against Sullivan & Cromwell on Thursday afternoon. Dorsey said Friedberg’s declaration was “full of hearsay, innuendo, speculation” and “rumors,” and would not allow Friedberg to testify via Zoom because he did not appear in person in Delaware.

FTX, once valued at $32 billion, collapsed after a run on its utility token. Founder Sam Bankman-Fried is facing criminal fraud charges in a separate case.

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.

© 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.

Cryptocurrencies were mostly higher after the U.S. open, with bitcoin trading back above $21,000.

Ether was up 1.3% to around $1,553, as of 9:40 a.m. ET.

Traditional markets were also in the green, with S&P 500 up by 0.2% and the Nasdaq 100 higher by 0.7%.

BTC/USD chart by TradingView

FTT held on to gains from yesterday when it jumped about 30% on the news that FTX’s new CEO was considering restarting the exchange. It was trading at around $2.30.

FTT/USD Chart by TradinfView

Crypto stocks also traded up, with Silvergate shares gaining 3.3%. MicroStrategy was up by a more modest 0.3%, Block by 1.7% and Coinbase by 2.5%.

© 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.

Genesis has a roadmap to exit bankruptcy and hopes to do so as “quickly and efficiently as possible,” interim CEO Derar Islim told clients this morning in a letter obtained by The Block. 

“Our goal is to move through the Chapter 11 process as quickly and efficiently as possible while reaching the best outcome and emerging well-positioned for the future,” Islim wrote in the letter hours after the company filed for Chapter 11 bankruptcy protection. 

The firm owes its top creditors $3.6 billion, according to its bankruptcy filing. 

Redemptions and new loan originations at the lending business remain suspended, and all client claims will now be addressed through the Chapter 11 process, according to the letter. Islim noted the firm “intends to establish a customary claims process for clients.” The Chapter 11 process means there’s an automatic stay that prevents Genesis from paying out on any claims to its lending customers.

The firm took a financial hit following the collapses of the crypto hedge fund Three Arrows Capital and the FTX exchange last year — which Islim highlighted in his letter.

The firm halted withdrawals and new loan originations from its lending affiliate on Nov. 16. Genesis told clients on Jan. 4 that it was continuing to work toward finding a solution for the troubled borrowing and lending unit and that it needed more time to do so.

© 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.

Virtual world platform Decentraland has not one but three of its executives and founders listed among the 50 largest non-insider unsecured claims against Genesis Global, the crypto lender that filed for bankruptcy protection on Thursday.

Decentraland CFO Santiago Esponda drew attention after his Decentraland email address was listed in court filings as the contact for Heliva International, a Panama-based company owed $55 million by Genesis. But a closer look reveals that Decentraland’s two co-founders are also listed in the documents with non-Decentraland email addresses.

Esteban Ordano, a Decentraland co-founder who now acts as an adviser, is listed as the contact for an entity called Winah Securities. Genesis owes Winah, which is located on the same floor in the same building as Heliva, almost $27 million. Ordano told The Block that Winah has no relationship with Decentraland.

Gaming company Big Time Studios is owed $20 million. It’s run by Ari Meilich, Decentraland’s other co-founder. He started Big Time in 2020 but also remains a Decentraland adviser. Meilich declined to comment. 

Ripio link

Another link with Decentraland is through Cayman Islands-registered Ripio, a credit company that launched a mortgage service for purchasing Decentraland virtual land in 2018.

Genesis Global, the lending unit of Digital Currency Group’s Genesis brokerage, filed for bankruptcy protection late yesterday after failing in a bid to raise fresh cash. The firm had frozen customer funds in November following the collapse of crypto exchange giant FTX. 

Genesis owes more than $3.6 billion to its top 50 creditors. 

© 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.

Web3 game studio InfiniGods’ debut game InfiniMerge came out of beta and is available to the public.

A free-to-play merge game set in an ancient Greek landscape, the company said it has attracted more than 1,000 players since coming out of beta. The game is available on desktop with full mobile support coming later this year.

Merge games are a type of casual puzzle game. Inspired by the likes of Candy Crush, Triple Town and City Block but with integrated blockchain technology, InfiniGods players can generate their own in-game power-ups usable for gameplay or tradable with other players.

“Merge games are popular for their simple mechanics and straightforward progression and InfiniMerge combines all this with web3 elements like digital collectibles and play-to-own rewards. We believe that web3 gaming will only reach its potential if games are fun and accessible, and that’s the objective we’ve sought to achieve with InfiniMerge,” said Damon Gura, co-founder and CEO of InfiniGods.

The company launched last year, raising $9 million in seed funding from investors including Pantera Capital, Framework Ventures and Animoca Brands.

The launch is one of several the web3 gaming industry has seen so far this year. Australia-based Illuvium introduced its third game earlier this month, while Yuga Labs has gamified NFTs with its newest offering, Dookie Dash. 

© 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.

Former FTX.US president Brett Harrison has raised $5 million from investors including Coinbase Ventures and Circle Ventures to build out his latest venture: Architect. 

The new firm—which Harrison has been developing in stealth since he left FTX in September—will provide software trading tools in the decentralized finance space for large investors and institutions, according to Bloomberg News. 

Other investors in the round include Anthony Scaramucci, who previously invested in Harrison’s former employer, FTX. SV Angel, Third King Venture Capital and Motivate Venture Capital are also backers of the new firm. 

Previously head of semi-systematic technology at Citadel Securities, Harrison was tapped to lead FTX’s American off shoot in 2019. He has recently distanced himself from disgraced former billionaire and FTX founder Sam Bankman-Fried for his stewardship of the now bankrupt firm. 

“There was tremendous pressure not to disagree with Sam, but I did so anyway,” Harrison said in a tweet on Jan. 14, referring to his disagreements with Bankman-Fried. “At that time, and for all of my time at FTX US, his influence over the media, FTX’s partners, the venture capital industry, and the traditional finance industry was pervasive and unyielding.”

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.

© 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.