FTX clawbacks, Genesis silver lining? – CryptoNewsTo

FTX clawbacks, Genesis silver lining?

Remember when Sam Bankman-Fried admitted to being a significant donor to the Democratic and Republican parties? Well, the recipients of the tainted money have been formally requested to return the funds to FTX’s creditors. So far, we know of three prominent Democratic groups — the DNC, the Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee — that have returned SBF-linked donations in December 2022. Will the rest follow? 

As FTX seeks clawbacks, the Digital Currency Group and its bankrupt subsidiary, Genesis Global Trading, have agreed to a restructuring plan. The good news is that Genesis account holders will get most of their money back if the deal is finalized.

This week’s Crypto Biz revisits familiar stories surrounding FTX and the Digital Currency Group and breaks down crypto’s failure to win public trust.

FTX seeks to claw back political donations by the end of February

The rise and fall of Sam Bankman-Fried was shrouded in extreme controversy after we learned the FTX founder was a massive donor to the Democratic and Republican parties. Now that the bankrupt FTX is recovering cash and liquid cryptocurrencies, the company’s new management wants to recover all political donations from SBF and his cronies. “FTX Debtors are sending confidential messages to political figures, political action funds, and other recipients of contributions or other payments that were made by or at the direction of the FTX Debtors, Samuel Bankman-Fried or other officers or principals of the FTX Debtors,” wrote FTX attorney Andy Dietderich. “These recipients are requested to return such funds to the FTX Debtors by February 28, 2023.”

DCG offloads Grayscale shares to raise capital: Report

Grayscale products were a hot commodity during the 2021 bull market. Now, even Grayscale’s owner is offloading shares to preserve capital and liquidity amid the bear market. Citing United States securities filings, the Financial Times reported on Feb. 7 that Digital Currency Group (DCG) was selling shares of several Grayscale products, including the Ether investment trust, possibly to avoid a deeper liquidity crunch at the holding company. Digital Currency Group confirmed the sale but attributed it to “ongoing portfolio rebalancing.” DCG’s financial problems are well known at this point. Much stems from its subsidiary Genesis, which filed for bankruptcy on Jan. 19, allegedly owing $3 billion to creditors.

Genesis creditors to expect 80% recovery under proposed restructuring plan

Speaking of Genesis, creditors can expect to get 80% of their money back — but only if a newly proposed restructuring plan goes smoothly. On Feb. 6, Genesis announced that it reached an “agreement in principle” with DCG and its creditors, which would eventually pave the way for customers to get back most of their deposits. Under the proposed agreement, DCG will exchange a $1.1 billion promissory note due in 2023 for convertible preferred stock and refinance existing loans to free up $526 million. The Winklevoss twins’ Gemini exchange will also contribute $100 million to Gemini Earn users whose funds are frozen with Genesis. Even if all goes according to plan, the relationship between Gemini and DCG seems irrevocably broken.

Crypto ad deals for Super Bowl LVII fell apart after FTX collapse: Report

Don’t expect a crypto Hail Mary during the Super Bowl this weekend, as the NFL has reportedly scrapped any plans to advertise the industry on game day. According to a report from the Associated Press, the league was considering running four crypto-focused commercials during the Super Bowl. Crypto will now get “zero representation” during the big game because of all the bad press surrounding the industry. It seems like a million years ago, but Super Bowl LVI in 2022 featured commercials from FTX, eToro, Crypto.com and Coinbase. Even comedian Larry David got suckered in to advertise for FTX. He’s now facing a class-action lawsuit for allegedly pumping the crypto exchange without due diligence.

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