Genesis Files Lawsuit Against Gemini, $100 Million Heco Chain Breach
Market Update
- Equities are continuing the November rally, with the Nasdaq and S&P gaining 0.6% and 0.5%, respectively. The yield on the U.S. 10-Year Treasury dropped below 4.4% for the first time in two months, in spite of the recent FOMC minutes suggesting that the policy will stay 'restrictive' until there is a clear trend of inflation heading towards the Federal Reserve's target of 2%. BTC is recovering to trade at $37k after tapping $35.6k following Binance's settlement with the U.S. Department of Justice, where it acknowledged violations related to anti-money laundering, unauthorized money transmission, and breaching sanctions. Binance has also reached settlements with the CFTC, FinCEN, and OFAC. As per the settlement terms, Binance will pay penalties and forfeitures totaling $4.3 billion, withdraw entirely from the U.S. market, and maintain an independent compliance monitor for three years. Additionally, CZ, who admitted guilt in contravening the Bank Secrecy Act and awaits sentencing in February, resigned as CEO and is barred from any involvement with Binance for a three-year period. The role of CEO will now be assumed by Richard Teng, Binance’s head of regional markets and a former regulator in Abu Dhabi. ETH is trading above $2k after a brief sell-off, outperforming BTC over the last day with ETHBTC gaining 2.24%.
- Genesis Global Capital, a cryptocurrency lending company, has filed a lawsuit against Gemini Trust seeking to recover over $689 million in alleged "preferential transfers." The lawsuit claims that amidst market turmoil caused by Terraform Labs and Three Arrows Capital, Gemini made sizable loan repayments and withdrawals from Genesis before it declared bankruptcy. These actions allegedly put other creditors at a disadvantage and depleted funds that could have gone to repaying loans. The lawsuit portrays the transfers as "unfair" and is asking the court to intervene. This latest legal battle builds on months of tensions between Genesis and Gemini stemming from the FTX collapse. It adds to ongoing scrutiny from US authorities, including the SEC accusing both companies of selling unregistered securities. With Genesis in bankruptcy and the New York Attorney General alleging Gemini and its partners defrauded investors out of over $1 billion, the lawsuit alleges Gemini sought repayment from Genesis while aware of its worsening financial troubles. By initiating withdrawals during Genesis's 90-day preference period before bankruptcy, the lawsuit claims Gemini obtained preferential treatment over other creditors owed funds.
- Cryptocurrency exchange HTX and blockchain network Heco Chain were hacked for a total of $97 million in stolen tokens, according to Justin Sun, an investor in HTX. Sun confirmed that the exploits targeted both HTX and Heco Chain in a post on Wednesday. HTX has temporarily suspended deposits and withdrawals while the remaining funds are secure. Sun stated that HTX will fully reimburse any losses originating from the exchange. The causes of the hack are still under investigation and services will resume once the issues have been identified. Earlier on Wednesday, blockchain security firm Cyver had flagged suspicious transfers worth $85 million, suspecting a private key leak that enabled access to the Heco bridge which facilitates token transfers between Heco Chain and Ethereum. While Heco Chain was set up and is maintained by HTX, a spokesperson clarified that the two entities operate independently. This incident comes after HTX faced a smaller $8 million exploit in October where hackers stole 500 ether from the exchange. As with the previous hack, HTX covered all losses from the latest breach.
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
Chainlink has managed to show positive performance during a day when many Cryptocurrencies are lower. As daily LINK 4.36% charts show, the early day weakness proved short-lived before a push back to above $15.50, which represents the highest daily close in over seven days. The area near $16 has importance and generally resulted in a slowdown as this was roughly double of the area of the breakout last month. Over the next 1-2 months, further strength looks likely despite the current overbought state, and rallies up to $23.50 look likely with an outsized chance that this moves to $29 which would represent a 50% retracement of the entire selloff from May 2021 peaks. Pullbacks should find ample support near $12.50 but breaching that level would temporarily derail the rally while LINK pulls back to $10. Overall, LINK is technically attractive here and Tuesday's gains likely could jumpstart the move over $18 in the weeks to come.
Daily Important Metrics
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All metrics as of November 22, 2023 1:50 PM
All Funding rates are in bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $727B | $37,202 | ↑ 0.80% | ↑ 125% | |
 ETH | $248B | $2,061 | ↑ 4.32% | ↑ 72% | ↓ -53% |
 SOL | $24B | $56.44 | ↑ 5.73% | ↑ 470% | ↑ 346% |
 ADA | $13B | $0.3763 | ↑ 2.76% | ↑ 52% | ↓ -72% |
 DOGE | $11B | $0.0757 | ↑ 1.88% | ↑ 7.92% | ↓ -117% |
 LINK | $8.1B | $14.47 | ↑ 4.89% | ↑ 161% | ↑ 36% |
 MATIC | $7.2B | $0.7711 | ↑ 3.41% | ↑ 1.17% | ↓ -123% |
 DOT | $6.8B | $5.22 | ↑ 5.00% | ↑ 20% | ↓ -104% |
 NEAR | $1.8B | $1.84 | ↑ 2.49% | ↑ 44% | ↓ -80% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| GBTC | ↓ -8.85% | $29.77 | ↑ 1.93% | ↑ 259% | ↑ 134% |
| BITW | ↓ -25% | $22.40 | ↑ 0.13% | ↑ 317% | ↑ 193% |
| ETHE | ↓ -11% | $17.14 | ↑ 4.38% | ↑ 260% | ↑ 136% |
| BTCC | ↑ 0.30% | $6.80 | ↑ 0.59% | ↑ 124% | ↓ -0.15% |
News
QUICK BITS
The Block Meet Richard Teng. A primer on the new CEO of world’s largest crypto exchange Richard Teng was named CEO of Binance on Tuesday after Changpeng Zhao stepped down following criminal charges in the U.S. |
Coin Telegraph Celsius entity to focus only on mining under proposed reorganization plan The lending firm has been in bankruptcy court since its Chapter 11 filing in 2022, while the SEC filed a lawsuit again... |
MARKET DATA
The Block Mt. Gox to start repaying creditors in cash ‘shortly’ this year, trustee says Defunct exchange Mt. Gox plans to commence cash repayments this year and will likely continue repaying into next year. |
REGULATION
Decrypt.co Grayscale Met With SEC to Discuss Spot Bitcoin ETF Bid According to a memo published by the SEC, officials from the Division of Trading and Markets met with Grayscale's CEO and other principals. |
HACKS, EXPLOITS, AND SCAMS
CoinDesk Justin Sun Confirms HTX, Heco Chain Exploited After $100M in Suspicious Transfers HTX withdrawals and deposits have been temporarily suspended, and all losses will be covered by the exchange, Sun said. |
CryptoPotato Genesis Files $689 Million Lawsuit Against Gemini to Recover ‘Preferential Transfers’ The lawsuit claims Gemini made preferential transfers during market turmoil caused by Terraform Labs and Three Arrows Capital. |
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