GM. This is the Milk Road. The daily crypto newsletter that makes you think, laugh, and (sometimes) cry all in 5 minutes or less .
Let's get caught up on the latest FTX drama.
It's official. The FTX series is longer than Fast & Furious. Sorry, Vin.
#1: FTX CONTAGION SPREADS
The FTX contagion is spreading fast.
The latest victim? Genesis.
It's a crypto trading company that's owned by Digital Currency Group (DCG).
Genesis isn't small potatoes either. They're the Super-Size-Me from Mcdonald's.
They had $2.8b in total active loans at the end of Q3 2022.
And last night Genesis hit their customers with a "hey. u up? can we talk?" text.
What's up at Genesis? π
β The Milk Road (@MilkRoadDaily)2:04 AM β’ Nov 16, 2022
You know you're in trouble when you get that late-night message.
And this morning Genesis dropped the truth bomb. They held a conference call with investors to tell them they have paused withdrawals and stopped initiating any new loans.
Today Genesis Global Capital, @GenesisTrading's lending business, made the difficult decision to temporarily suspend redemptions and new loan originations.
β Digital Currency Group (@DCGco)1:12 PM β’ Nov 16, 2022
Funny how things can change in a week...
Last week: Genesis said they had "no material net credit exposure" to FTX
This week: They hired advisors and are 'exploring all possible best options'.
Why should you care?
- DCG owns CoinDesk, Foundry, Luno, and Grayscale
- Grayscale has 17 crypto ETFs and is one of the largest holders of Bitcoin (own ~$11b worth)
- Jason Yanowitz from Blockworks says that almost every big whale gives big money to Genesis
- They are at the center of crypto. They custody funds and help institutions earn yield
Call it trust issues, but I'm getting my money off all these lending/borrowing platforms right after hitting send on this email.
P.S - It's being reported that Binance might be looking to buy out Genesis' portfolio. CZ looking for Black Friday discounts.
P.P.S - Gemini might be next. There are reports that the main sites have been down this morning and users haven't been able to withdraw funds.
#2: MORE QUESTIONS SURROUNDING FTX'S BALANCE SHEET
Yesterday, Samuel tweeted out where FTXs balance sheet stands today:
- Liquid: -$8b
- Semi: +$5.5b
- Illiquid: +$3.5b
We tried googling "semi-liquid" and nothing popped up...
Before we spent time analyzing the FTX balance sheet, our good friend Matt Levine dropped a 5,000-word piece on it.
Hereβs the best from Mattβs piece:
- There was a negative $8b entry described as a βhidden, poorly internally labeled βfiat@β accountβ
- An obscure $7m holding called βTRUMPLOSEβ
- FTXs two largest holdings were $5.9b of $FTT (market cap of $500m) and $2.5b of $SRM (market cap of $65m). Aka illiquid tokens
Not only were both of these tokens illiquid, but they were both issued by FTX. Matt puts it best here...
#3: LEAKED TERM SHEET AND MR. WONDERFUL IS IN
The term sheet FTX was sending potential investors over the weekend leaked...
Samuel and co. were asking for $6b-$10b.
And they created something called the βAll Together (AT)β set where investors can pool their money together to reach $6b.
Gotta respect the creativity.
And hey, Sam, you already got one investor.
Mr. Wonderful from Shark Tank says that he would invest in Samuel again calling him, "one of the most brilliant traders in the crypto universe."
You cannot make this stuff up... @kevinolearytv from the television show Shark Tank was asked by @cryptomanran if he would invest in SBF again...you WILL NOT believe his response. He was also a paid spokesperson for FTX...and an investor in FTX. He is also lobbying in DC. π€‘π
β mleejr (@MLeeJr)6:32 PM β’ Nov 15, 2022
Brilliant = bankrupt. What a world we live in.
#4: DAVE PORTNOY & SAMUEL INTERVIEW COMING SOON?
This interview with @SBF_FTX would break the internet.
β Dave Portnoy (@stoolpresidente)1:20 PM β’ Nov 16, 2022
I know I'd watch.
TODAY'S EDITION IS BROUGHT TO YOU BY EVALUATE.XYZ
Now Iβm taking my talents to the NFT world. And I just found the best platform to help meβ¦
Introducing Evaluate.xyz - it lets you meet other NFT collectors, negotiate deals, and live swap NFTs . You can:
- Match with potential trading partners in seconds
- Swap your existing NFTs for new ones in secure trading lobbies
- Negotiate trades directly on the platform using live chat. Say goodbye to all those Discord, Twitter, and Facebook messages!
Manage your NFT portfolio & shop across other NFT marketplaces. All in one platform!
Evaluate is the safest, fastest, and easiest way to trade NFTs. And 1m+ collectors have already used it to manage NFTs on Flow and Ethereum.
Start meeting new collectors instantly and swap NFTs by visiting Evaluate.xyz!
MILKY MEMES TO MAKE IT ALL BETTER
Enough bad news. Let's wash it all down with some Milky Memes.
β πΈπΈπΈ (@itsALLrisky)3:02 AM β’ Nov 14, 2022
And the cherry on top? An AI-generated picture of Samuel getting arrested in the Bahamas.
That's a wrap for today. Stay thirsty & see ya tomorrow!
If you want more, be sure to follow our Twitter (@MilkRoadDaily)
INTERESTED IN ADVERTISING ON THE MILK ROAD?
Click here to fill out this survey and we'll get back to you soon!
What'd you think of today's edition?
Login or Subscribe to participate in polls.
A ROADERS REVIEW
VITALIK PIC OF THE DAY
Peaceful vibes in this violent market
β The Milk Road (@MilkRoadDaily)5:48 PM β’ Nov 16, 2022
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
