The 5 Crypto Stories You Need to Know This Week (21 January 2023)

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1. Former FTX Chief Regulatory Officer Claims Conflicts of Interest with Law Firm Sullivan & Cromwell in Bankruptcy Case (Court Listener)

This declaration is definitely one of the most interesting developments in the entire FTX collapse saga.

According to the former Chief Regulatory Officer of FTX, Daniel Friedberg, there are serious conflicts of interest with the law firm Sullivan & Cromwell acting in the FTX bankruptcy. What’s worse is that the law firm may have precipitated the bankruptcy of FTX. The declaration is definitely worth a read.

However, this did not convince the court as the judge rejected the motion to dismiss Sullivan & Cromwell on Friday.

2. 1 out of 3 Members of Congress Received Cash from FTX (Fortune)

This demonstrates once again how engrained FTX and its leadership were with U.S. lawmakers and policymakers on both sides of the aisle.

The question now is what are these lawmakers going to do with that donation amount? Will they donate it to charity? Will they return it to FTX creditors?

An interesting development to follow!

3. Nexo Pays $45 million to Settle SEC and State Charges for Failing to Register Its Lending Product (The Block)

The SEC press release was interesting, as there are a number of takeaways.?

First, such an earn product is seen as a security by the regulators.?

Second, the SEC considered the remedial actions taken by Nexo, especially when Nexo announced in December 2022 that it was voluntarily ceasing the offering of its earn product to U.S. investors after competitor BlockFi was fined $100 million for the same activity.

This was a big week for Nexo, which also decided to sue the Cayman regulator (CIMA) after CIMA argued that Nexo’s business model did not meet the required risk profile. Nexo argued that the decision was procedurally unfair and breached constitutional and statutory duties by not informing them of the detailed reason for the rejection.

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4. Genesis Files for Bankruptcy; Owes Top 50 Creditors More Than $3.6 Billion (Wall Street Journal)

Whilst the bankruptcy of Genesis has been expected for many days now, it will be important to see what its impact will be on its parent company, DCG.

The public spat between the CEO of DCG, Barry Silbert, and the CEO of Gemini, Tyler Winklevoss, has been quite lively and we should not be surprised to see the animosity increase as Gemini is by far the biggest creditor of Genesis, according to the list of top 50 creditors issued.

5. China Enables Smart Contract Functionality for its e-CNY CBDC via Meituan, One of the Country’s Largest Food Delivery and Lifestyle Apps (CoinDesk)?

Whilst there are a lot of retail CBDC experimentations, very few use smart contracts in live projects. The e-CNY from China’s PBOC is unique in this way.?

When a user places an order with the app and pays for it with the digital yuan, the smart contract is triggered and looks for certain keywords in the list of goods purchased along with the merchant's name.

If a user happens to have some of those keywords, which change daily, the smart contract will allocate a portion of the 8,888 RMB to his or her digital yuan wallet.

Will be interesting to see if we see other similar initiatives in 2023.

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