Cryptocurrency roundup for January 6: Magic Eden to refund users affected by a technical glitch,... - Moneycontrol

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Last Updated : January 06, 2023 / 09:13 AM IST
Cryptocurrency roundup for January 6: Magic Eden to refund users affected by a technical glitch, Silvergate shares plummet almost 50% in trade, and more
A daily round-up of the most interesting articles on cryptocurrencies like Bitcoin, Ethereum and Tether to help jump-start the day.

Murtuza Merchant

Market Buzz
Technical Glitch On Magic Eden Leads to Refunds for Affected NFT Buyers
A day after Magic Eden suffered a technical glitch that resulted in 25 unverified NFTs being sold as part of verified collections, the nonfungible tokens marketplace on Thursday announced it will be refunding all users who mistakenly bought the unverified NFTs.
> The company said the issue arose due to a bug in the platform’s Snappy Marketplace and Pro Trade tools, which automatically included unverified NFTs in collections without verifying their authenticity.
> Magic Eden said its smart contract was not compromised in the hack, and the issue has now been resolved.

> The platform’s team disabled the Snappy Marketplace and Pro Trade features at 5:00 am Pacific Time in order to eliminate the entry points for unverified NFTs. Full report here.
Big Story
Mango Markets Exploiter Ordered Detention By District Court
Avraham Eisenberg, the individual behind the recent Mango Markets exploit, has been ordered to detention by the United States District Court for the District of Puerto Rico.
> Judge Bruce McGiverin made the decision to detain Eisenberg after a detention hearing, citing several reasons for the order.
> These include the possibility of Eisenberg facing a lengthy prison sentence if he is convicted, his connections outside of the United States, and an unverified background.
> The court also stated that there are no conditions or combination of conditions that would reasonably assure Eisenberg’s appearance as required.

> A detention order, which can be issued at a bail hearing, requires the defendant to remain in custody until the case is finished or until they are released through a bail review. More here.
Withdrawals
Massive Customer Withdrawals Cause Silvergate Capital Shares To Plummet 50%
Shares of Silvergate Capital plummeted by almost 40% on Thursday after the bank released preliminary Q4 results that showed a significant drop in customer deposits.
> Digital asset deposits decreased from $11.9 billion at the end of Q3 to $3.8 billion, representing a decline of approximately 68%.
> The decrease in deposits coincided with the collapse of crypto exchange FTX (CRYPTO: FTT), a Silvergate customer, which raised concerns about the stability of the digital asset industry.
> Silvergate CEO Alan Lane stated that there was a “crisis of confidence across the ecosystem.”

> As of Dec. 31, $150 million of the bank’s deposits were held by customers who had filed for bankruptcy protection. Details here .
Massive Investor Fraud Scheme
Ex-CEO Of Celsius Alex Mashinsky Facing Lawsuit By New York Attorney General For Massive Investor Fraud Scheme
The former CEO of cryptocurrency lending platform Celsius Network, Alex Mashinsky, is being sued by the New York Attorney General, Letitia James, for defrauding hundreds of thousands of investors, including more than 26,000 New Yorkers, out of billions of dollars worth of cryptocurrency.
> The lawsuit alleges that Mashinsky lied to investors, concealed Celsius’s deteriorating financial condition, and failed to register as required by state law.

> Mashinsky, who was Celsius’s public face, is accused of making false and misleading statements about Celsius’s safety, number of users, and investment strategies in order to recruit investors and repeatedly asserting that Celsius was safer than a bank. Full report here.
Three Arrows Capital
Founders of Failed Crypto Hedge Fund Three Arrows Capital Served Subpoenas on Twitter by Liquidators
The founders of the now-defunct cryptocurrency hedge fund, Three Arrows Capital, have been served subpoenas via Twitter by the company’s liquidators.
> Kyle Davies and Zhu Su are believed to have gone into hiding since the collapse of the hedge fund, which was worth over $1 billion, last year.
> Teneo, a financial advisory firm, has been tasked with liquidating Three Arrows Capital in bankruptcy proceedings taking place in the United States, Singapore, and the British Virgin Islands.

> Teneo requested and was granted permission by a court in the Southern District of New York to serve the subpoenas to Davies and Su via Twitter and email due to their refusal to participate in the proceedings. Continue reading.
Market Turmoil
Cryptocurrency Market Turmoil in 2022 Could Lead to Handover to More Stable Companies in 2023, Says Circle’s Dante Disparte
Dante Disparte, the chief strategy officer and head of global policy at Circle, has suggested that the turmoil in the cryptocurrency market in 2022 could mark a handover of the technology to more stable companies in 2023. Disparte stated that the losses suffered by the industry, estimated at over $2 trillion, have led to a loss of trust in the promise of cryptocurrency, which was initially seen as a solution to the issues that caused the 2008 financial crisis. The failures of the year have also validated the concerns of policymakers who warned about the risks of cryptocurrency without implementing proper regulations. Continue reading. Continue reading.
Genesis Trading
Genesis Trading Announces Mass Layoffs as Crypto Industry Struggles
Genesis Trading, an institutional cryptocurrency firm, has announced significant layoffs as part of its cost-cutting efforts.
> The company did not disclose the exact number of employees affected, but sources close to the situation claim that approximately 30% of Genesis Trading’s staff has been laid off.
> A spokesperson for the firm stated that the layoffs were necessary due to the challenges faced by the industry and that the company is working to identify the best solution for its business, clients, and employees in the long term.

> The spokesperson also expressed appreciation for the hard work of the company’s dedicated team. More here.
Digital-Collectibles
Fanatics Sells Most of Its Stake in Digital-Collectibles Company Candy Digital to Group Led by Galaxy Digital and ConsenSys
Sports merchandiser Fanatics Inc. has sold most of its stake in digital-collectibles company Candy Digital to a group that included existing investor Galaxy Digital Holdings and ConsenSys, which was founded by Ethereum co-founder Joseph Lubin.

> Although Fanatics was once Candy Digital’s largest holder, the company did not disclose the terms of the deal. The sale comes at a time when nonfungible tokens are facing challenges. Details here
Digital Asset Stocks
Digital Asset Stocks Take a Hit While Crypto Prices Remain Relatively Stable

> Digital asset-related stocks saw a decline in value as news about ratings and financial results hit the market, while crypto prices remained relatively stable.
> According to TradingView data, bitcoin was trading at around $16,800, a 0.3% decrease, while ether was hovering around $1,240, a drop of approximately 0.8%.
> Other altcoins like Polygon’s MATIC and Ripple’s XRP also saw a decline, falling 2.4% and 2.7%, respectively.
> Silvergate experienced a significant drop, falling 43% after announcing job cuts and an $8.1 billion decrease in deposits in the fourth quarter.> Crypto exchange Coinbase saw an 8.5% decrease in value. Cowen downgraded the stock, but Needham’s John Todaro pointed out that the market has likely already absorbed the impact of declining trading volumes, as those numbers are already public.
The Week on Dalal Street | Expect more pain for Nifty; Banks, IT stocks look vulnerable
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