blockbank Crypto News Desk #58
A Week of Triumph for Fideum Group at Mastercard Lighthouse
It’s been a week since Fideum Group’s significant victory at the Mastercard Lighthouse, securing People’s Choice & Baltics Class Winner Awards, and the sense of achievement is still palpable. Our team, brilliantly led by Anastasija Plotnikova, Kelghe D’Cruz, Darren Franceschini, and Vilnius Gudavicius, has set a new benchmark in innovation and dedication. This achievement is a shared success, thanks to our partners’ unyielding support and the community’s unwavering belief in us. Reflecting on this momentous week, we’re grateful for the support and ready for the exciting challenges ahead. Fideum Group continues to forge a path of excellence with gratitude and determination!
Bitcoin Mining Hits Record Annual Highs
The Bitcoin mining community reached a new annual peak on November 12, 2023, by earning over $44 million in a single day from block rewards and transaction fees. This milestone, last achieved in April 2022, represents a significant upswing in the cryptocurrency sector.
This resurgence follows a challenging period between April 2022 and November 2023, marked by a prolonged bear market and regulatory challenges. However, 2023 has seen a positive shift, driven by increasing market prices and a growing public interest in cryptocurrencies. These factors collectively contributed to a year-long rise in revenue for Bitcoin miners.
Notably, the mining firm Marathon Digital Holdings reported a 670% surge in revenue in the third quarter of 2023, reflecting the sector’s robust growth. Additionally, countries like Bhutan have been increasingly involved in Bitcoin mining, utilizing sustainable methods like hydropower, indicating a global trend towards more environmentally friendly mining practices
The Rise of Bitcoin Millionaire Wallets in 2023
2023 has witnessed a striking growth in the number of Bitcoin millionaire wallets. According to BitInfoCharts, the count of Bitcoin wallet addresses holding over $1 million surged from 23,795 at the beginning of the year to 81,925, marking a staggering 237% increase in just 11 months.
It’s important to note that these millionaire wallets are not exclusively owned by individual users. Many belong to crypto exchanges and financial institutions, highlighting the broadening institutional interest in Bitcoin.
Additionally, the number of “wholecoiners” — wallets holding at least 1 BTC — saw a modest rise of 4%, totaling 1,018,015 addresses. This growth is notable considering the broad price declines and industry challenges witnessed in the previous year.
The current market momentum, with Bitcoin trading around $37,100, up 38% over the past month, is further buoyed by the anticipation of spot exchange-traded fund (ETF) products. Analysts from Bloomberg predict a 90% chance of a spot Bitcoin ETF approval by early January, which could potentially trigger a significant price rally.
ARK Invest’s Strategic Move: Selling $6M of Grayscale Bitcoin Trust Shares
Cathie Wood’s ARK Invest made a notable move by selling over 200,000 shares of the Grayscale Bitcoin Trust (GBTC) on November 10, 2023. This sale amounted to $6.03 million and was part of the firm’s Next Generation Internet ETF (ARKW). Despite this sale, GBTC remains ARKW’s largest holding, comprising approximately 9.97% of its portfolio, valued around $132 million.
The decision to sell these shares came amidst a significant rally in GBTC shares, which saw nearly a 10% increase last week, reflecting a robust year for the trust with nearly a 250% rally in 2023. This performance significantly outpaced Bitcoin’s own impressive 123% rise this year.
The timing of this sale is particularly interesting, given the ongoing developments in the cryptocurrency sector. Grayscale Investments, the parent company of GBTC, recently won a legal victory against the U.S. Securities and Exchange Commission, enhancing the prospects of converting GBTC into a spot Bitcoin ETF. The SEC’s recent engagement in talks with Grayscale could be a precursor to significant changes in the cryptocurrency investment landscape, which ARK Invest seems to be strategically navigating.
$100 Million Crypto Heist at Poloniex Exchange
Poloniex, a prominent digital asset exchange, fell victim to a massive security breach on November 10, 2023. Attackers drained over $100 million from a wallet associated with the exchange. Initially estimated at around $60 million, further investigation revealed the staggering extent of the exploit.
CertiK, a blockchain security firm, indicated that the incident likely involved a compromise of private keys. The stolen funds were transferred to four externally owned accounts, with some being converted into Ether (ETH). Following the suspicious outflows, Poloniex disabled the affected wallet but has yet to release an official statement.
Justin Sun, who acquired Poloniex in 2019, assured that the exchange would fully reimburse affected users and is in pursuit of collaborations with other exchanges to recover the funds. Sun also offered a 5% bounty to the hacker for the return of the funds within seven days, signaling a proactive approach to resolving the incident.
FTX Estate’s Billion-Dollar Legal Battle Against Bybit
The FTX bankruptcy estate, led by CEO John J. Ray III, has initiated a billion-dollar lawsuit against Bybit and its investment arm, Mirana, along with various executives. This legal action aims to recover nearly $1 billion in funds and digital assets withdrawn by Bybit just before FTX’s collapse. The lawsuit accuses Bybit of utilizing “VIP” access and connections with FTX staff to facilitate substantial withdrawals from Mirana and Time Research, another entity linked to Bybit, at a critical juncture for FTX.
The lawsuit further alleges that Bybit imposed restrictions on the FTX estate, hindering the withdrawal of assets over $125 million on the Bybit exchange. This move is purportedly a strategic leverage to recover a $20 million balance that Bybit couldn’t withdraw prior to FTX’s collapse.
In a complex turn of events, the lawsuit also addresses a dispute over BitDAO, now Mantle. A Bybit executive disclosed in October 2021 that despite public portrayal as a decentralized entity, BitDAO was controlled by the company. Following FTX’s rejection of a proposal to reverse a transaction involving BitDAO’s BIT tokens and FTX’s FTT tokens, BitDAO rebranded as Mantle and restricted FTX’s token conversion, a move allegedly influenced by Bybit executives.
This billion-dollar lawsuit is pursuing both compensatory and punitive damages against Bybit, spotlighting intricate entanglements in the crypto industry’s operational and legal domains.
Genesis Proposes Drastic Reduction in 3AC Claim to $33 Million
Genesis, a bankrupt cryptocurrency lender, is seeking court approval for a proposed settlement agreement with the collapsed crypto hedge fund Three Arrows Capital (3AC). In an unexpected move, Genesis aims to reduce 3AC’s claim from a staggering $1 billion to just $33 million. This reduction accounts for merely 3.3% of the original claim amount.
The settlement agreement outlines that the 3AC debtor would receive an allowed general unsecured claim against Genesis for $33 million, satisfying the over $1 billion in claims. This agreement was crucial for Genesis, as 3AC’s claims were among the largest in the Chapter 11 cases related to the FTX exchange collapse.
Genesis also proposes to relinquish all claims to AVAX and NEAR tokens in favor of 3AC, suggesting a mutual release from liability between the two firms. This step is part of Genesis’s strategy to facilitate its Chapter 11 reorganization plans and mitigate litigation risks and expenses.
The proposed settlement, pending approval by Judge Sean Lane, is aimed at streamlining Genesis’s reorganization process, ensuring timely distributions, and reducing uncertainties associated with lengthy legal disputes. This news comes as the cryptocurrency industry marks the one-year anniversary of the FTX exchange collapse, an event that significantly impacted companies like Genesis and 3AC.
The Block’s Strategic Pivot with Foresight Ventures Investment
The Block, a prominent crypto-focused media company, has embarked on a new chapter by selling a majority stake to Singapore-based venture capital firm Foresight Ventures, valued at $70 million. This move results in Foresight Ventures acquiring an 80% stake in The Block for $60 million, ensuring the media company’s continued operation as an independent entity.
Larry Cermak, CEO of The Block, remains the second-largest shareholder, with Foresight CEO Forest Bai stepping in as chairman and partner Tony Cheng taking a board seat. Cermak views this transition as a “fresh start” for the company. Tony Cheng’s vision for the deal is to expand user engagement from Asia, tapping into a growing market segment.
This development is significant as it allows The Block to distance itself from the FTX scandal. The company’s previous majority shareholder, Mike McCaffrey, had come under scrutiny for receiving loans worth millions from Sam Bankman-Fried, founder and former CEO of FTX.
As part of the agreement, Foresight Ventures will invest an undisclosed amount in advertising with The Block during the first year. The capital from this deal predominantly addresses the stake previously held by McCaffrey, alongside a change of control clause. Foresight Ventures, holding stakes in several Asian crypto media organizations, aims to leverage this network to support The Block’s growth, particularly in a challenging bear market that has led to significant layoffs, including nearly 33% of The Block’s staff earlier this year.
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