Genesis reportedly preps for bankruptcy filing; ConsenSys plans layoffs

Rep. Tom Emmer roasts Gary Gensler in fiery speech on the House floor

HSBC to launch custody service for tokenized securities

The biggest news in the cryptoverse for Jan. 18 saw rumors circulate suggesting that Genesis is preparing a prepackaged bankruptcy filing. Meanwhile, Ethereum development firm ConsenSys announced that it will lay off about 11% of its workforce.

Elsewhere, the Hong Kong-based exchange Bitlavo has been seized, the Bank of Spain has approved a euro-pegged stablecoin, the SEC is increasing its crypto actions, and Coinbase is halting its operations in Japan. Tucker Carlson has suggested that Bitcoin’s price pump could be due to ransomware demands. Plus, research on Bitcoin’s spot-to-futures ratio.

CryptoSlate Top Stories

Genesis rumored to be preparing bankruptcy filing as soon as next week

Genesis Trading, the institutional trading platform owned by Digital Currency Group (DCG,) is reportedly preparing a “prepackaged” bankruptcy filing with creditors.

On Jan. 18, Bloomberg reported, “Genesis Global Capital is laying the groundwork for a bankruptcy filing as soon as this week.” The news gives some clarification as to a timeline for creditors to be paid back. However, the halting of dividends on Jan. 17 for DCG investors was perhaps the most significant indicator yet that things are looking dire within the group.

ConsenSys CEO confirms layoffs, firm to focus on scaling core offerings

ConsenSys CEO Joseph Lupin said in a Jan. 18 letter that the firm is focusing on scaling its core offerings and will lay off 96 employees – 11% of its workforce to “adjust to challenging and uncertain market.”

The CEO said: “We are extremely grateful for their contributions and the work they’ve accomplished. Each of the impacted employees will be notified today by their manager.”

The CEO said ConsenSys would provide “generous packages” to assist laid-off employees. This would cover severance packages according to tenure, an extended option exercise window from 12 months to 36 months, customized placement assistance, and healthcare benefits in certain jurisdictions.

Hong Kong exchange Bitzlato seized; founder arrested

Anatoly Legkodymov, the founder of Hong Kong-registered crypto exchange Bitzlato, was arrested in Miami on Wednesday and charged with allegedly running an unregistered money-transmitting business that flouted anti-money laundering laws and facilitated illicit fund transmissions, the U.S. DOJ announced Jan. 18.

Russian national Legkodymov was a majority shareholder of Bitzlato and controlled the exchange.

Additionally, French authorities working with Europol and authorities in Spain, Portugal, and Cyprus, dismantled Bitzlato’s digital infrastructure.

Spanish central bank approves digital Euro token EURM

El Banco de España (Central Bank of Spain) has authorized testing of a digital Euro token EURM.

The token will be issued by Spanish fintech Monei and was developed within the central bank’s digital ‘sandbox’ program.

Spanish news site Cinco Dias reported that the project would be limited to a small group of testing applicants during the initial phase. Applicants are required to enter a phone number and undergo a video-based KYC process before loading their digital wallets with traditional Euros through the Spanish payment app Bizum.

SEC crypto enforcement actions up 50% in 2022 – nearly half against ICOs

The U.S. Securities and Exchange Commission (SEC) brought 30 enforcement actions against crypto market participants last year — the highest since 2013, according to a Cornerstone Research report.

The number of SEC enforcement actions in 2022 was up 50% from the 20 actions launched in 2021, the report stated.

Fox News host credits Bitcoin pump to ransomware hackers

Fox News host Tucker Carlson theorized that recent bullish market moves were due to the U.S. government buying Bitcoin to pay ransomware attackers.

Specifically, Carlson linked the recent grounding of flights by the Federal Aviation Administration (FAA) to a cyber attack, postulating that “almost all ransoms like this are paid in Bitcoin.”

On Jan. 11, the FAA halted nationwide departures, delaying thousands of flights, due to a “computer outage.”

Coinbase to halt operation in Japan

Coinbase announced that it would be halting its operation in Japan due to current market conditions.

The exchange said in a Jan. 18 announcement that it was forced it to “make the difficult decision” to halt operations in the country and conduct a complete revision of its Japanese business.

The decision comes just days after the company announced that it was beginning to wind down its operations in the country. Coinbase’s Vice President for Business Development, Nana Murugesan, said on Jan. 11 that the company wasn’t interested in mergers and acquisitions and won’t sell its Japanese unit.

Every third member of the US Congress received money from FTX

Out of 535 senators and representatives in the U.S. Congress, 196 were found to have taken donations in cash from FTX.

The members of Congress were identified by CoinDesk journalists in a large research effort to shine a light on Congress’ connection to the failed exchange.

Journalists reached out to all 196 members for comments and received responses from just 53 campaigns.

Around 64% of the respondents said they decided to donate the amounts to nonprofit causes, while 38% said they were holding the money and waiting for guidance on how to give it back.

Research Highlight

Research: Bitcoin Spot to Futures ratio shows retail drove price above $20,000

Data analyzed by CryptoSlate showed a strong contrast between Bitcoin and Ethereum Spot to Futures Volume (SFV) trends, with the former’s SFV continuing to rise.

The Spot to Futures Volume metric looks at the ratio of spot volume against futures volume for a particular cryptocurrency.

Spot price refers to the current quote for the immediate purchase of the cryptocurrency and forms the basis for all derivatives markets. Strong spot volume equates to healthy accumulation, leading to sustainable price growth.

Retail buyers typically use spot markets, whereas institutions and experienced, well-financed traders tend to trade derivatives.