- Stocks are moving higher following a promising December jobs report. The S&P 500 gained 1.56%, while the Nasdaq was up 1.49%. The jobs report showed the U.S. economy added 223k jobs last month, higher than the 200k expected, but wage growth was lower than the expected 0.4%, growing only 0.3%. Despite a historically low unemployment rate of 3.5%, investors hope the Fed can thread the needle on a soft landing and bring inflation down without a severe recession. Treasury yields are falling, with the U.S 10 Year and 30 Year decreasing by 3.82% and 2.63%, respectively. $BTC continues to move with subdued volatility, trading flat over the last day near $16,800. $ETH gained 0.89% to trade around $1260. Liquid staking provider Lido’s $LDO has risen 42.6% over the last week, the largest gain among the top 100 coins by market cap. The move follows increased optimism on withdrawals from Ethereum staking being enabled. Withdrawals could catalyze growth in TVL and revenue for liquid staking providers as investors and the platforms see additional liquidity from previously locked assets. Lido has been neck and neck with MakerDAO for the top TVL by protocol, currently at ~$6.2 bn. The protocol also dominates the $ETH liquid staking derivative market with over ~70% market share.
- The New York state attorney general announced a lawsuit against the former CEO of defunct crypto lender Celsius. Attorney general Letitia James claims Alex Mashinskey "promised to lead investors to financial freedom but led them down a path of financial ruin." The lawsuit alleges Alex Mashinskey misled clients and investors about the platform's operations, stating it was safer than a bank and only invested in low-risk assets. After reaching a peak of $20 billion in deposits, the lender froze withdrawals in June and declared bankruptcy in July last year amid losses from bets on Terra and loans to defunct crypto hedge fund Three Arrows Capital. Before freezing withdrawals, Mashinskey made claims to downplay the extent of their losses, claiming the platform had "very small losses" and "billions in liquidity" in an attempt to avoid a bank run, despite taking a $935 million loss after Terra's and Three Arrows' downfall. Celsius entered bankruptcy with $1.75 billion in crypto assets, far below the $4.7 billion owed to customers. A judge recently ruled that under Celsius' terms and conditions, assets on interest-bearing accounts belonged to the bankruptcy estate, as the agreement made it clear they turned over control of their assets.
- Huobi Global is the latest exchange in a string of insolvency rumors after the company announced it would lay off 20% of its staff and cut year-end bonuses. The speculation began earlier this week after an internal employee communications channel was shut down. This followed protests of a transition in compensation from fiat to USDT and USDD stablecoins. Justin Sun, the founder of Tron protocol and adviser to the exchange, recently posted on Twitter to de-escalate the situation. On-chain data shows over $100 million in outflows from the exchange in the past week, $60 million of which was in the last 24 hours. Justin Sun was seen on-chain depositing a similar amount of stablecoins in what could be a liquidity crunch. Notably, 32% of the exchange's holdings are in its own token, $HT, while they hold 81% of the circulating supply, or 131.6 million out of 162.2 million. The situation is reminiscent of FTX's blow-up from its position with $FTT, as they also had a large portion of their native token making up an outsized portion of their balance sheet. While the rumors of insolvency are unconfirmed, crypto investors have learned that when there's smoke in crypto, there tends to be fire.
NY State Sues Former Celsius CEO, Huobi Global Under Scrutiny
Jan 6, 2023
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