- After retracing significant gains at the close yesterday, traditional indices are roughly flat on the day, while US Treasury yields are turning higher. Many are looking forward to Thursday’s CPI report release, which will have large implications on the Fed’s interest rate decisions on February 1st. Crypto markets are continuing their constructive week, with BTC and ETH rising 0.72% and 0.67%, respectively. The total crypto market cap is up for the third consecutive day, rising to $811 billion (+0.64%). In addition to liquid staking derivatives outperforming this week, alt layer-1 Aptos (APT) has shown impressive returns, gaining over 42% this week and being the best performer in the top 100 tokens over the last 24 hours (+7.20%).
- In the latest episode of the Genesis/DCG and Gemini saga, Cameron Winklevoss, the co-founder of Gemini has released a second open letter to the board of DCG. Winklevoss directly accuses Genesis and DCG of making false statements and misrepresentations to Gemini and the public regarding Genesis's solvency and financial health. Winklevoss alleges that Genesis and DCG committed accounting fraud when DCG bailed out Genesis following the collapse of 3AC. The letter addresses two main issues with how DCG and Genesis handled the situation. The $1.2 billion in liabilities that DCG was taking on for Genesis was through a promissory note due in 2032. The promissory note was characterized as a “current asset” on DCG’s balance sheet, which generally refers to cash, cash equivalents, or other assets that can be exchanged for cash within one year. Winklevoss argues that the promissory note clearly doesn’t qualify as a current asset, as it is due in 2032. Secondly, he argues that the note should not be valued at $1.1 billion and rather should be heavily discounted to represent the present value of the note. For those two reasons, Genesis’s financial health seemed much rosier than it truly was. Winklevoss goes on to ask the DCG board to remove Barry Silbert as the CEO of DCG and immediately install a new leader who can and will work with Gemini to develop a mutually beneficial solution.
- Coinbase (COIN), the popular crypto exchange, is continuing its cost-cutting efforts amid the bear market, announcing about a 20% reduction in its workforce. Coinbase had previously cut jobs back in June and is now cutting another 950 jobs, which should help reduce the company’s operating expenses by 25% for the first quarter of 2023. CEO Brian Armstrong said, “it became clear that we would need to reduce expenses to increase our chances of doing well in every scenario” and that cutting more jobs was absolutely necessary. In addition to reducing headcount, Coinbase will be shutting the doors on some of its projects with a lower probability of success. The cost-cutting efforts are not unique to crypto companies, as multiple other large tech firms, such as Amazon and Salesforce have announced layoffs in recent weeks. Investors are reacting positively to Coinbase’s efforts, with shares rising 5.02% today.
Genesis and DCG Accused of Accounting Fraud, Coinbase Cuts More Jobs
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