🤔 who owes whom?
3AC enters liquidation, CoinFlex tussles with Roger Ver over margin call, Unizen raises $200M and more.
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Crypto Market Update 📈
The global cryptocurrency market cap stood at $854.18B, falling 4.80% over the last 24 hours. The total crypto market volume rose 3.63% to $64.93 billion during the same period.
Bitcoin (BTC): $19,034.63 (-4.92%)
Ethereum (ETH): $1,017.07 (-8.66%)
Tether (USDT) : $0.99 (-0.01%)
Binance Coin (BNB): $208.29 (-4.83%)
Top Stories 📰
1. Court orders 3AC to liquidate
A collapse that came barely a month after Terra's meltdown has put the entire crypto market in its most volatile position ever. And this week, the company behind it has finally entered liquidation.
On Monday, a British Virgin Islands (BVI) court ordered the troubled-crypto venture Three Arrows Capital (3AC) into liquidation. While the company remains headquartered in Singapore, it's incorporated in BVI.
Global consultancy firm Teneo will manage 3AC's insolvency. The firm has appointed two operatives for the process, and will now create a website wherein creditors can make claims against 3AC.
What is 3AC? It's a high-profile crypto hedge fund founded by Zhu Su and Kyle Davies in 2012 that placed highly leveraged bets on several digital currencies, including stablecoins like TerraUSD. The firm once had $18 billion of assets under management. But the recent drop in crypto prices, stETH collapse, and its overleveraged bet on Grayscale Bitcoin Trust have led the firm into a liquidity crisis.
The 3AC meltdown has sparked contagion risks within the crypto market. Digital asset lending firms like Genesis and Babel Finance now face potential losses into “hundreds of millions.” Recently, firms like Voyager Digital and BlockFi have also borrowed millions in loans from crypto exchange FTX to remain solvent.
But the cascade of liquidations doesn't end here.
In a Forbes interview, FTX chief Sam Bankman-Fried said that there are some third-tier exchanges that are already "secretly insolvent,” adding that certain exchanges won’t have anyone to save them.
Why it matters? The implosion of 3AC has brought the crypto market to its knees, with research firm FSInsight accusing the founders of engaging in an “old-fashioned [Bernie] Madoff-style Ponzi scheme.” It also said that 3AC recklessly borrowed from new investors to pay old investors while making no returns.
2. CoinFlex vs Bitcoin Jesus
As the harsh crypto winter sends companies rushing to find ways of soothing their liquidity woes, it has created a lot of confusion regarding who owes what to whom.
On Tuesday, CoinFlex CEO Mark Lamb accused Roger "Bitcoin Jesus" Ver that he failed to pay $47 million of stablecoin USDC as part of a margin call. He said that Ver had been with a default notice and cited him as the reason for the crypto exchange halting customer withdrawals last week.
But less than an hour before, Ver denied all such rumours and instead alleged that the lending platform owed him the money.
Who’s Roger Ver? He's one of the earliest and most controversial investors in crypto. To date, he has invested in various blockchain projects such as Ripple, Kraken, purse.io, and Blockchain.com.
While under normal circumstances, CoinFlex would've liquidated the insolvent position, in this case, it chose not to due to the “stringent personal guarantees” put forward by the counterparty, or Ver.
So, in order to monetize its liability, CoinFlex created a new token called Recovery Value USD token (rvUSD)…talk about coincidence lol! According to the released white paper, the company will issue $47 million worth of the token, offering 20% interest. The token issuance has already begun and will run until July 1.
But the crypto community remains skeptical about this solution, with some calling it a Ponzi scheme.
Why it matters? While the company initially planned to resume customer withdrawals by June 30, Lamb said that they need more time. But this isn't surprising as CoinFlex had previously said in its blog post that it would start withdrawals only when the rvUSD token issuance is fully subscribed.
Deal Street 🤑
CeDeFi exchange Unizen raises $200M
Unizen, a Liechtenstein-based centralized-decentralized finance (CeDeFi) exchange, has secured a $200 million investment from private equity group Global Emerging Markets. The funding is a "capital commitment," meaning that Unizen will receive a part of it up front, while the rest to be provided based on achieved milestones. Launched in 2021, Unizen runs on the BNB Chain (formerly Binance Smart Chain) and aims to find the most cost-efficient trades across centralized and decentralized exchanges like Binance and Uniswap. The latest funding will be used to grow its core team, bolster its innovation and marketing pipeline, and accelerate its trade aggregation ecosystem. In addition, Unizen is also launching ZenX Labs to help develop decentralized applications and will offer incentives and rewards to the native $ZCX token holders.
PolySign nets $53M in Series C
Blockchain fintech firm PolySign has raised a $53 million Series C funding round at an undisclosed valuation from investors including Cowen Digital, Brevan Howard, and GSR. In addition, the company also secured a $25M credit facility with Boathouse Capital. Founded in 2018, PolySign provides blockchain-enabled technologies to institutional investors via its subsidiary, Standard Custody & Trust Company. It also provides fund administrations through its newly-acquired company, MG Stover. In May last year, the Oakland-based company raised a $53 million Series B led by Cowen Digital. PolySign manages nearly $35 billion in assets and has more than 200 clients representing more than 400 different funds. With this latest capital infusion, PolySign intends to accelerate growth and expand operations.
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