January 10, 2023

🥛 The Godfather is back in crypto

GM. This is the Milk Road. We’re the Bounty of Crypto – we’ll be your Quicker, Picker, Upper.

Here’s what we got for you today:

  • The Feds have another FTX bone to pick

  • The Godfather is back in crypto

  • The SEC & DOJ investigate DCG


Samuel's "locked up".

FTX, his bankrupt exchange & bank, is in shambles.

And 4 of its subsidiaries are up for grabs.

  • 117 parties are interested in buying at least one of them as lawyers move forward with bankruptcy proceedings

  • 59 confidentiality agreements have been signed between FTX and interested buyers

The businesses are the belles of the ball currently;

They’ve got too many names on their dance cards.

(If you didn’t get that, you need more Bridgerton in your life.)

There’s a problem, though: A US Trustee filed an objection on Saturday against plans to sell the entities.

Why? If the companies sell, so will their business records, which might have important information about FTX’s bankruptcy.

The trustee wants an independent review of the subsidiaries, but the auction is slated for Feb. 27.

And the quicker they’re sold, the better; their value might slip over time, which would be bad for stakeholders.

So who are our lovely contestants? Let’s meet them.

1/ Embed

Behind door No. 1 is Embed, the company that FTX acquired in June 2022.

Embed is an equities clearing firm whose technology helped FTX with its crypto stock trading offerings for users.

Embed enjoys FINRA (the Financial Industry Regulatory Authority), APIs, and getting caught in the rain.

2/ LedgerX

(Not to be confused with the hard wallet firm Ledger; that’s different.)

The regulated derivatives exchange was baby’s first acquisition in October 2021.

FTX changed its name to FTX US Derivatives at the time.

And at least 50 parties are interested in LedgerX and Embed specifically.

You might call them the Diamonds of the ton.

3/ FTX Japan and FTX Europe

Both units had their operations suspended back in December.

That means debtors have to work a bit harder to get them ready for auction i.e. compiling “diligence materials.”

About 40 parties are interested in these two. ^

Fewer than the others, but not everyone can be the crown jewel.

So what does FTX say about all this?

The company said in December that the units it wanted to sell are fairly separate from the main FTX group.

Different customer accounts, etc.

Yeah, we’ve heard that before.


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The Godfather has returned. And no, we ain’t talking about Don Corleone.

We’re talking about the malware that targets banking apps & crypto exchanges. And Germany’s financial regulator (BaFin) is warning everyone that the Godfather malware is back.

Here’s everything you need to know:

  • The Godfather malware infects a device and displays fake websites that look identical to popular banking apps & crypto exchanges

  • It collects user login data & can steal two-factor authentication codes. Bada-bing! Just like that.

  • It has attacked 400+ banking & crypto apps. (More than half of them are banking apps from the United States.)

  • It’s unclear how the malware actually infects devices or who is behind the attack. I know it was you, Fredo.

  • The Godfather was first discovered in 2021 but recently went through significant code upgrades. It’s back, and badder than ever.

If we had to describe it all in one pic, here it is.

In the great words of Don Corleone…

“The lawyer with the briefcase hacker with malware can steal more than the man with the gun”

P.S – We’re also hearing the next malware will be called… The Tony Soprano.


Partnership of the Day: Gala Games is partnering up with The Rock & Mark Wahlberg to create 2 new films together. Pain & Gain Part 2?

The Investigation Heats Up: The SEC and DOJ are investigating DCG over its relationship with Genesis. Stay tuned, the drama continues.

Another Deal Down the Drain: Ferrari cuts $30m/yr sponsorship deal with Velas blockchain. Crypto sponsorships are breaking down like a 2002 Chrysler.

Sorry, We’re Closed: The Metropolitan Commercial Bank announced its shutting down its crypto-related services. They hit crypto with the “Bye Felicia.”

Market Mover of the Day: Jim Cramer. Over the weekend, Jim advised people to “get out of crypto now”. Fast forward to today, many altcoins are seeing highs they haven’t seen in months. The Reverse Jim Cramer Strikes Again.



That's a wrap for today. Stay thirsty & see ya tomorrow! If you want more, be sure to follow our Twitter (@MilkRoadDaily)


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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.