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Bitvavo has rejected an offer by Digital Currency Group to pay part of the €280 million ($297 million) owed by its beleaguered crypto lending subsidiary Genesis, the Dutch crypto exchange said on Tuesday.

Bitvavo’s statement revealed that DCG offered to pay at least 70% of the loan. The Dutch exchange, however, refused the offer — citing the firm’s ability to repay the total amount owed within the agreed-upon payment timetable.

The exchange also stated that a corporate restructuring within DCG could aid a favorable out-of-court settlement for lenders — echoing crypto exchange Gemini’s appeals for similar changes. Gemini president Cameron Winklevoss called for DCG CEO Barry Silbert to step down yesterday, accusing the latter of misleading the public about the company’s financial health. Gemini is another of Genesis’s creditors, with $900 million currently stuck with the troubled lender. 

Bitvavo’s statement also assured customers that their funds were safe. The exchange maintained that Genesis going into bankruptcy would not affect the loan repayment process. 

© 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.

Fearing identity theft or becoming the target of hackers, creditors in the BlockFi bankruptcy proceedings have requested that their personal information remain secret.

However, U.S. Department of Justice official Andrew Vara argued that “disclosure is a basic premise of bankruptcy law” and necessary. The issue will be considered at a hearing scheduled for Jan. 17.

The battle from BlockFi creditors comes after hundreds of thousands of Celsius users had their details published as part of the bankrupt crypto lender’s bankruptcy proceedings.

© 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.

Henson Orser, a Nomura veteran who spent two years as president of the Japanese bank’s crypto project, Komainu, is now leading Dubai’s dedicated virtual assets regulator.

The so-called Virtual Assets Regulatory Authority (VARA) was set up in March 2022 and is responsible for granting licenses to crypto operators and regulating the sector in the Emirate of Dubai.

Orser becomes the organization’s first CEO after taking the reins on Jan. 3, amid a broader push to establish Dubai as a hub for crypto and metaverse operators.

“It’s the first purely virtual asset regulatory authority,” he told The Block, adding that VARA aims to deliver a framework that is “gold standard, tier one and even passportable to other jurisdictions,” as well as compliant with guidance on crypto regulation published by the Financial Action Task Force.  

Most jurisdictions — including the U.S., UK, Switzerland and Singapore — have moved to regulate the crypto sector through existing bodies. VARA is unusual in that it was formed specifically to oversee crypto firms.

From Sept. 2020, Orser spent nearly two years as president of Komainu, the crypto custodian formed as a joint venture between Nomura, CoinShares and Ledger. Before that, he spent some six years in senior roles at Nomura, including stints as head of global markets sales in the Americas and global head of wholesale SRM.

VARA is currently working towards the start of its Minimum Viable Product (MVP) phase, meaning any crypto business that wins a license may not yet offer regulated services in the region. Licensed firms will be able to begin offering regulated products once the MVP phase is operationalized, according to VARA’s website.

Late last year, VARA dished out provisional licenses to Binance, Komainu and Hex Trust. It had also granted an MVP license to a subsidiary of FTX, the collapsed crypto exchange run by Sam Bankman-Fried. That license was revoked in November.

Orser told The Block that finalized rulebooks for crypto firms will be published on VARA’s website “within weeks.”

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.

ConsenSys will let go of as many as 100 or more employee,  CoinDesk reported, citing a person familiar with the matter.

The exact number of employees that could be laid off is not clear, as the reductions have yet to be finalized, the source told CoinDesk.

ConsenSys joins a number of companies that have laid off workers due to the bear market. Coinbase and Huobi each recently reduced headcount by 20%, and Genesis this month laid off 30% of its staff. 

© 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.

ConsenSys, the blockchain infrastructure platform behind Metamask and Infura, opened a private beta testnet for a new scaling and privacy technology called zkEVM that’s built on top of Ethereum.

ConsenSys is using the testnet to explore the potentially disruptive technology that could improve Ethereum’s speed and transaction costs by over 100x.  ZkEVM stands for zero-knowledge Ethereum Virtual Machine. It allows developers to build applications using the same tooling and coding language they are accustomed to on Ethereum, but without having to learn the cryptography and math skills needed to code in zero-knowledge.

The ConsenSys testnet has received over 150,000 applications since December.

Participants in the beta can bridge assets between the Goerli testnet and the zkEVM to test smart contracts, dapps, infrastructure and wallets. Goerli testnet is a popular test network used to launch and experiment with new applications prior to launching them in a live environment.

“We intend to learn whether the developer experience of the zkEVM has the potential to accelerate innovation in web3,” ConsenSys said when it announced the testnet.

ZkEVMs, while promising, are still unproven in a live environment. Many are expected to launch this year, including zkSync and Polygon Hermez, which are both further along in their testnet phases.

ConsenSys has been working on its zkEVM network for several years, and it released the technical specifications at the Ethereum DevCon Bogota conference last year.

© 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 Tuesday, with 16 gaining and the other three declining.

Bitcoin rose 1.3% to $17,459 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.

Trading firm Group One bought a 13.5% stake in MicroStrategy.

The firm scooped up 1,261,744 shares of Class A common stock, according to a document filed with the U.S. Securities and Exchange Commission. Microstrategy shares were up 6.5% as of 3 p.m. ET. 

MicroStrategy is one of the largest holders of bitcoin, with a total of about 132,500 BTC as of Dec. 28. 

Based in Chicago, Group One has been in business since 1989 and mostly operates in the options trading market, it says on its website. It maintains a physical presence on the Chicago Board Options Exchange, New York Stock Exchange Amex and Arca and Nasdaq PHLX.

The firm didn’t immediately respond to a request for comment. 

With the move, the company has become one of MicroStrategy’s biggest shareholders, next to Capital International Investors, Vanguard and BlackRock, according to Nasdaq.

© 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.

Gemini told clients in an email today that it is terminating customer loan agreements with Genesis Global Capital as it winds down its Earn program.

Gemini said it will prioritize the return of customer funds and “operate with the utmost urgency.” 

“We are writing to let you know that Gemini — acting as agent on your behalf — has terminated the Master Loan Agreement (MLA) between you and Genesis Global Capital, LLC (Genesis), effective as of January 8, 2023,” notes the email. It goes on to declare the termination of the Earn program and that Genesis must “return all assets outstanding in the program.”

Existing redemption requests and the capacity of Gemini to seek a resolution to recover its customers assets, are not impacted by the loan agreement’s resolution, the company said in its email. 

Gemini said to expect updates on Tuesday and Friday of each week, at a minimum, “until a resolution has been reached,” the company said.

The collapses of FTX as well as hedge fund Three Arrows Capital caused Genesis to temporarily pause withdrawals, which forced Gemini to lock down funds in its Earn program.

In an open letter posted to Twitter on Tuesday Gemini President Cameron Winklevoss blasted Genesis parent company Digital Currency Group (DCG), accusing Gemini’s former lending partner of defrauding over 340,000 Earn users and misleading them regarding DCG’s solvency. Winklevoss also called for the ouster of DCG CEO Barry Silbert. 

Silbert responded to the accusations from Winklevoss, and said funds were never commingled among DCG subsidiaries, and that its relationship with Three Arrows Capital was limited to a lending and trading agreement.

Three Arrows Capital had separately invested in a number of Grayscale products, Silbert said.

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.

An LLC linked to billionaire Peter Thiel is among a list of FTX equity holders filed by FTX Trading Ltd. and its affiliated debtors as part of its Chapter 11 bankruptcy proceedings. The famous tech entrepreneur and investor is the latest major name linked to FTX. 

The list, which was filed on Jan. 9, outlines the names of equity holders and the number of shares they hold from a variety of FTX subsidiaries, including West Realm Shires Inc, FTX Trading Inc, Clifton Bay Investments and more.

The list also includes details of the holdings of NFL quarterback Tom Brady, supermodel Gisele Bundchen, American TV personality, investor, and paid FTX spokesperson Kevin O’Leary, and several well-known venture capital and investment firms.

Details of the holdings of former FTX CEO Sam Bankman-Fried’s inner circle are also included in the filing. 

Silicon Valley investor Peter Thiel’s Rivendell Trust, which is Thiel’s family trust, and his venture capital arm Thiel Capital are mentioned in the filing linked to an investment vehicle “2021-015 Investments LLC.” The vehicle received 245,000 shares from West Realm Shires Inc. and 57,230 from FTX Trading Ltd.

Requests for comment sent to the Thiel-related addresses were not returned before publication. 

Thiel’s investment in FTX was not previously known. It was revealed in November 2022 that the billionaire had invested in collapsed crypto lender BlockFi through Valar Ventures, a venture arm tied to Thiel. BlockFi, which brokered a $680 million deal with FTX US, filed for Chapter 11 bankruptcy protection following the exchange’s collapse.

The list of equity holders is based on information that is currently available to debtors and will be updated as proceedings continue. 

“The Debtors’ investigation continues regarding the individuals and interests listed on the Equity Holders Lists,” said the counsel for the debtors and debtors-in-possession.

Notable names

Key players from FTX Ventures are missing from the list. Amy Wu, who was the head of the ventures arm, and Ramnik Arora, who was a partner in the ventures arm and also operated as head of product from FTX, are not mentioned in the unredacted list of names.

Brett Harrison, the former FTX US president, is also not mentioned. Earlier this week, Harrison said he would share information on FTX US “in time.”

The document also reveals the shares held by prominent spokespeople for the exchange. Brady, the NFL star, has 1,144,861 shares and model Bundchen has 686,761 shares from the FTX Trading subsidiary. TV personality and investor O’Leary’s production company is listed as owning 183,791 shares from two subsidiaries.

The filing also shows significant holdings from investment firm BlackRock across a number of FTX subsidiaries as well as holdings from other publicly known investors such as Coinbase Ventures, Third Point Ventures, Multicoin and Paradigm. 

FTX raised $1.8 billion from more than 90 investors since 2018.

FTX’s inner circle

Many names still remain redacted in the publicly available document, with lawyers for the U.S. government as well as other journalism outlets pushing for a more comprehensive public listing of top creditors to the failed crypto empire.

But the new court documents provide some insight into the workings of Bankman-Fried’s inner circle revealing the number of shares held by top executives across various subsidiaries.

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.

The Financial Services and Markets Bill, which sweeps parts of crypto into financial regulation, came under scrutiny in the UK Parliament, where members of the House of Lords called for greater regulation for crypto assets after a turbulent year in the sector.

“The recent collapse of FTX has demonstrated both the volatility of the market and the vulnerability to fraud,” said Alan Smith, a member of the House of Lords, and one of the voices calling for greater crypto regulation. He compared crypto to online gambling.

The FSMB gives more power to UK regulators, like the Financial Conduct Authority, to supervise crypto assets. The bill also regulates stablecoins used for payments, and sets restrictions on advertising crypto to UK citizens. The second reading session on Tuesday evening gave the upper house lawmakers the opportunity to flag concerns on the bill, and draft amendments.

Some members noted that crypto will need a whole new regulatory approach. “The constant evolution of digital assets represents not just a financial revolution, but also a technological and conceptual revolution that will not fit simply into existing regulatory categories and approaches,” said Jonathan Hill, a member of the upper chamber. 

“Managing emerging innovation opportunities while preventing abuse is going to pose some really serious capacity and structural challenges to the regulator. Candidly, I have my doubts if the FCA is really ready for this,” he added.

Other Lords members, like George Bridges, voiced concerns over lack of sufficient accountability regimes for the regulators, which will be granted extra power through the bill.

Earlier on Tuesday, Treasury Minister Andrew Griffith told the House of Commons that he intends to build a regime for crypto assets and stablecoins “that foster growth and innovation” in 2023, though he suggested that no new legislation is likely to come out this year.

The UK government will publish a consultation report on crypto regulation in the coming weeks, Griffith said in the meeting. The minister hinted that unlike the consultation will include provisions for decentralized finance, contrary to the European Union’s Markets in Crypto Assets regulation which largely excludes it. 

© 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.