SBF has its day in court; Barry Silbert accused of freezing frozen funds

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After Sam Bankman-Fried was turned over to US authorities last month, his top lieutenants Caroline Ellison and Gary Wang had already cooperated with the federal government. The two pleaded guilty to a slew of charges and agreed to help the Southern District of New York investigate FTX and their former boss. SBF spent its day in court on January 3 and pleaded not guilty to all criminal charges.

As the saga surrounding SBF and FTX escalated, crypto capital market firm Digital Currency Group faced its own issues. Its CEO, Barry Silbert, has been accused of stalling over frozen funds.

This week, Crypto Biz dissects the latest news on SBF, Digital Currency Group (DCG), and Core Scientific.

Sam Bankman-Fried pleads not guilty to all counts in federal court

SBF has pleaded not guilty to all criminal charges related to FTX’s collapse, paving the way for what is expected to be a four-week trial beginning Oct. 2, 2023. The now-bankrupt exchange’s disgraced founder makes faces eight criminal counts and more to 115 years in prison for his alleged role in defrauding investors and money laundering. We know that FTX co-founder Gary Wang and former Alameda CEO Caroline Ellison have previously pleaded guilty to similar charges that were actually carried over to SBF, presumably for more favorable sentences. The SBF saga has only just begun. Prepare accordingly.

Sam Bankman-Fried has arrived in court for his arraignment. He was told he would plead not guilty to all charges against him. pic.twitter.com/yakSLkOus8

Connell McShane (@connellmcshane) January 3, 2023 Cameron Winklevoss writes an open letter to Barry Silbert about funds blocked by Geminis

Barry Silbert was slammed this week by none other than Cameron Winklevoss in an open letter written on January 2. Cameron’s rebuke comes from crypto lending firm Genesis Global, part of Barry Silberts Digital Currency Group. At the time the letter was written, withdrawals from Genesis had been halted for 47 days, effectively preventing Gemini from recovering $900 million in funds it had lent to Genesis under the Gemini Earn program. Every time we ask you for a tangible commitment, you hide behind lawyers, investment bankers and processes, Winklevoss said. Gemini has its own issues after being sued by investors for fraud and violating securities laws.

DCG did not borrow $1.675 billion from Genesis

DCG has never missed an interest payment to Genesis and is current on all outstanding loans; the next loan maturity is May 2023

DCG delivered a proposal to Genesis and your advisors on December 29 and received no response

Barry Silbert (@BarrySilbert) January 2, 2023 Grayscale ETH trust nears record 60% discount as nerves continue over DCG

Grayscale, another Digital Currency Group company, continues to rattle investors after its Ethereum Trust (ETHE) traded at a nearly 60% discount to the underlying value of its assets. A discount to net asset value, or NAV, typically occurs when demand is low and supply is large, causing the market price to fall below the NAV. In December, Grayscales Bitcoin Trust (GBTC) saw its discount hit 34% amid insolvency rumors surrounding Digital Currency Group. Some commentators have said that DCG may wait for Bitcoin price to recover. If so, we could be waiting a long time.

Each grayscale trust and their respective bounty percentage pic.twitter.com/TYQf5FmeXt

db (@tier10k) Jan 3, 2023 Core Scientific shuts down 37K mining rigs it hosted for Celsius

The crypto contagion has begun to spread to the Bitcoin mining industry, with Core Scientific filing for Chapter 11 bankruptcy in Texas last month. Core Scientific may have gotten a reprieve this week after bankrupt crypto lender Celsius Network, which collapsed epically last July, agreed to let the miner shut down more than 37,000 of its rigs. . From what we know, Core Scientific was hosting tens of thousands of mining rigs on behalf of Celsius and the end of this deal should provide the miner with an additional $2 million in monthly income as long as Bitcoin stays around $16,700. Of course, there is no guarantee that Bitcoin has found its bottom just yet.

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