January 6, 2023

🥛 Twitter subpoenas, CEO lawsuits, & seized shares

GM. This is Milk Road, the newsletter that makes understanding crypto easy, breezy, lemon shqueezy.

Here’s what's on the menu today:

  • 3AC subpoenas, Mashinsky lawsuit, & other legal stuff

  • Silvergate sold assets at massive loss

  • Genesis layoffs

  • Milky Meme


There’s football season, an NFL fan’s favorite time of year.

There’s wedding szn, Owen Wilson and Vince Vaughn’s favorite time of year.

Right now, it seems to be crypto legal season. And lawyers are lovin’ that BHB.

No, that’s not a new crypto token. We’re talking about those Billable Hours Baby.

Yesterday there were 3 major moves in the legal crypto world.

Here’s the Milk Road rundown:

1/ Celsius CEO Alex Mashinsky is sued

New York Attorney General Letitia James filed a lawsuit against the executive for allegedly defrauding investors.

Here are the allegations:

  • Mashinky made false and misleading statements about Celsius’s safety to encourage investors to deposit billions of dollars onto the platform.

  • As Celsius was losing everything, Mashinsky concealed it all.

  • He also failed to register as a salesperson for Celsius and as a securities & commodities dealer.

The A.G. seeks to ban Mashinky from doing business in New York and wants him to pay damages, restitution, and disgorgement. (That is: He allegedly stole a lot of money, people went broke, now he needs to pay for it.)

She says Mashinsky promised to lead investors to financial freedom but led them to financial ruin instead.

** mic drop **

2/ 3AC founders are subpoenaed

For months, 3AC liquidators have been trying to get in contact with the founders: Su Zhu & Kyle Davies.

For months, they’ve failed. Yesterday they added a fresh twist:

They served subpoenas via Twitter.

Check it out, they even made a 3ACLiquidation Twitter profile. The bio? Official account for the court-appointed Joint Liquidators of Three Arrows Capital, Ltd (in Liquidation). I’d swipe right…

No one knows where Su Zhu & Kyle Davies live IRL, but we all know where they live virtually… our favorite bird app.

3/ U.S. DoJ will seize FTX-linked Robinhood shares

Remember when Samuel Bankman-Fried bought 7% of Robinhood?

Well it turns out that was allegedly all customer money. (I’ll be damned… we all owned Robinhood and didn’t even know it.)

Now the DoJ is looking to step into FTX’s bankruptcy and seize the $465m worth of Robinhood shares that SBF bought.


U.S. Government: 4303438, Crypto Investors: 0.

Another L for the crypto investors.


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You’ve heard of Watergate. Deflategate.

Coming soon to a theater near you is Silvergate.

The bank might be the next crypto domino to fall:

  • Investors withdrew $8.1b from it after the FTX mess

  • So Silvergate sold its debt to cover those funds… and lost $718m

  • That figure ^ is more than the total profits the bank generated since 2013

  • It’s also laying off 200 people (40% of workforce)

Its shares were down 42% yesterday.

Oh, and remember when it paid Facebook $200m for the technology behind its failed Diem network?

So it could start its own digital currency project?

It has to scrap that, too.

Womp womp.

Silvergate was the bank that FTX used to move people’s funds to Alameda. (It’s facing a lawsuit because of that.)

It’s what’s known as a bridge. It helps investors move holdings off of crypto platforms and transfer them into fiat.

Burning one means we’re one step further from mass adoption.


Crypto Lender Genesis lays off 30% of staff after its $175m exposure to FTX and suspending withdrawals in November.

Billionaire investor Mark Cuban said he thinks wash trades (illegal pump and dumps) will be the biggest crypto scandal of 2023.

Shopify’s NFT owners can now mint and list them directly on the platform’s storefront instead of going to Magic Eden. Woot woot.



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.