SBF comments on FTX’s fate; Nexo faces criminal allegations

On Jan 12, 2023

The biggest news in the cryptoverse for Jan. 12 saw former FTX CEO Sam Bankman-Fried comment on a possible FTX recovery and tell his side of the story. Elsewhere, Nexo has been accused of financial crimes and has had its offices raided. Lido is accumulating staked ETH, while Binance is doubling down on Fetch.ai. Plus, research on Genesis and its GUSD stablecoin — alongside reports that the company owes creditors $3 billion.

CryptoSlate Top Stories

FTX recovery possible if sold as a going concern according to SBF

Sam Bankman-Fried confirmed that he still believes there is a future for FTX in a tweet reply to Twitter user WassieLawyer. SBF said: “I think that [customers] being made substantially whole is a real possibility.”

SBF was agreeing with the Twitter user who said “a sale of the FTX exchange as a going concern is viable” and they were “bullish on recovery” in relation to FTX.

SBF said that selling FTX as a functioning business “is and always has been the best recovery scenario for customers.” He also referenced the ongoing argument that FTX.US should be able to return funds to customers as it was allegedly solvent at the time of the Chapter 11 filing.

SBF reveals his side of the FTX story, blames CZ, targeted attack against FTX

Former FTX CEO Sam Bankman-Fried (SBF) launched a Substack report in which he detailed his version of accounts of what happened at FTX.

SBF claimed that “no funds were stolen” and attributed the collapse to Alameda’s inability to hedge against a market crash adequately.

Nexo co-founder calls financial crimes allegations ‘absurd’

Nexo’s co-founder and managing partner Antoni Trenchev confirmed that authorities are present at one of Nexo’s offices in Bulgaria following local reports that the Sofia office was raided in relation to “financial crimes.”

Trenchev told CryptoSlate that “Bulgaria is the most corrupt country in the EU” and called the allegations “absurd” as Nexo is “one of the most stringent entities with regards to KYC/AML.”

Nexo offices raided on allegations of financial crimes

Nexo’s Sofia offices were raided by authorities and “foreign agents” in relation to financial crimes, according to local media outlet Standart News.

The report claims investigations into Nexo began several months ago after “foreign services” alerted Bulgarian authorities to suspicious transactions. It added that the nature of these transactions related to sidestepping Russian sanctions.

Standart News also made the claim that the company owners have appropriated users’ funds to the tune of billions of dollars.

Nexo-linked addresses see outflows of nearly $9M amid rising FUD

On-chain data shows that addresses related to crypto lender Nexo are recording outflows following news of financial crimes investigations by the Bulgarian government.

Crypto intelligence platform Arkham Intelligence dashboard showed that the crypto lender had seen outflows of roughly $9 million since the news broke.

A breakdown of the transactions showed that Nexo’s address, 0xFfe, saw the majority of the withdrawals.

DCG scrambling to raise funds to cover Genesis’ $3B debt burden

Embattled crypto lender Genesis owes over $3 billion to its creditors, the Financial Times reported on Jan. 12, citing sources familiar with the matter.

The lender owes $900 million to users of Gemini’s Earn program, over $303 million to Dutch exchange Bitvavo, as well as money to users of crypto savings firm Donut.

On Jan. 10, Bitvavo rejected DCG’s proposal to repay 70% of its debt.

Genesis is in talks with investment bank Moelis to explore its options but external funding attempts have failed so far. Genesis’ parent company Digital Currency Group (DCG) is seeking to unload its venture capital portfolio to raise funds, according to the FT report.

Staked Ethereum surpasses 16M, over 70% stakers at a loss

The amount of staked Ethereum (ETH) has risen by 18% to over 16 million since the network completed its transition to a proof-of-stake (PoS) network last year, according to CryptoSlate data.

The 16 million staked ETH equates to roughly 13.28% of ETH’s total supply — worth $22.42 billion — 500,213 total validators and 87,121 distinct depositor addresses, according to Dune analytics data.

Lido is the dominant staking platform, controlling 29.08% of staked Ethereum. Around 4.65 million ETH — worth $6.8 billion — have been staked through it, according to the offical Lido website,

FET becomes reserve asset for Binance as AI token popularity rises

Fetch.ai (FET)has become a listed token on Proof of Reserves (PoR) for a number of exchanges, including Binance, Huobi and Bitfinex, according to Glassnode data.

Artificial Intelligence (AI) token popularity surged over the last three months — leading to significant increases in AI token price and active addresses, according to CryptoSlate data.

Research Highlight

Research: Gemini, GUSD start losing followers as metrics hit all-time lows

Glassnode data analyzed by CryptoSlate shows that the U.S.-based crypto exchange Gemini and its stablecoin Gemini Dollar (GUSD) are starting to lose followers and the community’s trust as metrics fall to all-time lows.

The number of active addresses that hold GUSD has slumped back to its 2020 levels. The chart below represents the active wallet number since the beginning of the year 2019.

The number of wallets started to increase at the end of 2020 and reached almost 1200 towards the end of 2021. Since then, active addresses that hold GUSD fell by 91.6% and retreated back to 100 in January 2023.

BUSD balance on exchanges also recorded a significant decrease. The chart below demonstrates the BUSD balance held on exchanges since the beginning of 2019.