Crypto USDC discussion

Looks like Celsius was a Ponzi. See below, after the Twitter comments.

Basically they were borrowing crypto and lending it out for dollars, but didn’t hedge so when they had to pay interest in crypto to their customers, they got screwed if crypto rose and it cost more to buy those coins they promised with the dollars received (even when everything went well otherwise. Why they didn’t hedge this huge short BTC/ETH/etc-long-USD position is beyond me, but they didn’t and just ignored it even after losing hundreds of millions this way…

https://www.bloomberg.com/opinion/articles/2022-07-11/the-price-of-not-buying-twitter

Throughout 2020 and 2021, crypto-assets such as bitcoin and ether substantially appreciated compared to the dollar. Yet Celsius failed to update its ledger in order reflect the increased dollar value of its liabilities at least at any time before 2021. The accounting error masked hundreds of millions of dollars in liabilities that Celsius was not prepared to pay out. When Jason Stone left Celsius, Celsius had a $100-$200 million hole on its balance sheet that it could not fully explain or resolve. Despite this balance sheet insolvency, Celsius continues to take on more customer assets, which means it continues to accrue considerable liabilities to the detriment of its current creditors.

In January 2021, the crypto-markets began a bull cycle which caused Celsius (who had recklessly and fraudulently failed to hedge its investments) to suffer severe exchange rate losses…

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I just talked to my friend. He was able to get all of his USDC converted to USD and out of Voyager, and he was able to get most of his BTC out. But at the time of the shutdown, he still had 0.39 BTC in there. ~$15k at the time they shutdown withdrawals. ~$20k today. I have no idea what his cost basis on that 0.39 BTC was. I’m curious what method he needs to use to figure it out if he ends up having to write it off.

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About that 3AC debt…

https://www.bloomberg.com/news/articles/2022-07-11/three-arrows-founders-whereabouts-unknown-stymying-liquidators

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Three Arrows

It’s a good thing that everyone in crypto got rich enough to buy their own islands because they’ll need places to flee to:

The founders of bankrupt crypto hedge fund Three Arrows Capital haven’t been cooperating in the firm’s liquidation process and their whereabouts were unknown as of Friday, according to court papers.

Representatives tapped to liquidate Three Arrows by a British Virgin Islands judge had “not yet received any meaningful cooperation” from Kyle Davies and Zhu Su, lawyers said in US bankruptcy court filings. Advisory firm Teneo is attempting to round up and preserve the assets of the hedge fund. …

The liquidators spoke with lawyers for Davies and Zhu via videoconference last week, according to court papers, but did not speak to the founders directly.

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Celsius is going bankrupt.

Voyager Digital stock reopened after their bankruptcy and traded around 15c as VGYVQ (previously VYGVF). I’m short some. It was about a buck and then run to $30, and now back to new lows.

image

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Nice attention and quick reaction. Congrats.

Set your voyager losses for music

Cash you can keep, your crypto is toast.

Judge Michael Wiles of the U.S. Bankruptcy Court in New York, who is overseeing Voyager’s bankruptcy, ruled on Thursday that the company provided “sufficient basis” to support its contention that customers should be allowed access to the custodial account held at Metropolitan Commercial Bank. Voyager had about $270 million in the account when it filed for bankruptcy, the bank has said.

but it said the roughly $1.3 billion in digital assets on Voyager’s platform belongs to the bankruptcy estate that will be shared by all creditors

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