Bankruptcy

Hut 8 agrees to develop mining site to build equity with Celsius creditors

Hut 8’s new mining site in Cedarvale, Texas, will house almost 66,000 miners and be powered by more than 215 MW of energy.

The Canadian Bitcoin (BTC) mining firm Hut 8 has signed an interim agreement to launch a new mining site in Cedarvale, Texas, in connection with the Celsius Network bankruptcy proceedings.

Announcing the news on Dec. 18, Hut 8 said that the mining site will house almost 66,000 miners and be powered by more than 215 megawatts (MW) of energy.

Hut 8 president Asher Genoot said that the agreement targets a “twofold” goal, which is to build equity with creditors of Celsius while also growing the strength of the managed services business. “We anticipate having more than 895 MW of infrastructure under our umbrella once the site is up and running,” the executive noted.

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FTX and Alameda move $23.59M in assets to Binance, Coinbase, OKX

The latest transfer of $23.59 million was spread across 19 tokens, including ETH, ALEPH, CRV, AVAX, LINK, DOGE, MATIC, UNI and SOL.

Over four days, wallets linked to defunct crypto trading firms FTX and Alameda Research moved $23.59 million worth of digital assets to top cryptocurrency exchanges.

Blockchain analytics firm Spot On Chain identified the movement, estimating that the defunct entities have transferred $591 million since Oct. 24 using 59 different cryptocurrency tokens.

The wallets linked to FTX spread the latest transfer of $23.59 million across 19 tokens: 3,150 Ether (ETH) worth $6.8 million, 59.6 million Aleph.im (ALEPH) worth $6.41 million, $2.48 million of Curve DAO (CRV) tokens, $990,000 of Avalanche (AVAX) and $848,000 of Chainlink’s (LINK).

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FTX to submit revised reorganization plan in mid-December

Bankrupt crypto exchange FTX is preparing to present an updated reorganization plan to the court in mid-December.

The Official Committee of Unsecured Creditors has written a reply to the FTX 2.0 Customer Ad Hoc Committee, providing insights into the details of its proposed amended reorganization plan. Scheduled for mid-December, the plan is expected to reshape the fate of unsecured creditors.

In the letter, recognizing differing perspectives on asset valuation and distribution, the Committee of Unsecured Creditors highlighted the proposed plan’s capacity to maintain a balance among stakeholders’ interests.

However, ongoing activities, including a potential acquisition by financial services firm Perella Weinberg that may unfold during the bankruptcy proceedings, will be formally submitted via a court motion for approval. Concepts like recovery rights tokens — referenced in the FTX 2.0 Customer Ad Hoc Committee’s letter — are presently under evaluation by both the Official Committee and potential transaction participants.

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Core Scientific explains its latest bankruptcy plan ahead of court date

If approved, the third version of the plan will go into effect on Jan. 5, 2024, and see the company add 372 MW in capacity by 2027.

Bitcoin (BTC) miner Core Scientific has released a presentation outlining its plans to emerge from bankruptcy in early January 2024. The presentation is based on the third amended joint Chapter 11 bankruptcy plan filed in a United States bankruptcy court on Nov.

Common shareholders and holders of two series of convertible notes are being planned for separately.

Planned Core Scientific indicators through 2027. Source: Core Scientific

Noteholders will receive $1.628 on every $1 of face value for notes due in April and $1.201 per $1 face value for notes with an August due date.

If it reaches agreements with key shareholders, Core Scientific will emerge from bankruptcy with $709 million in net debt and $791 million in equity value on Jan.

Related: ‘Unjustly enriched’ — Core Scientific knocks back $4.7M claim from Celsius

Core Scientific operates seven facilities in five U.S.

Core Scientific filed for bankruptcy in late December 2022.

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FTX and Alameda transfers another $22M worth of crypto asset

Following their most recent move, FTX and Alameda Research have transferred another significant amount of digital assets, amounting to an impressive $22 million.

Blockchain analysis firm Lookonchain reported that cryptocurrency powerhouses FTX and Alameda Research are actively engaged in a substantial transfer of digital assets, amounting to an impressive $22 million.

Following their bankruptcy declaration, FTX and Alameda Research have actively maneuvered in cryptocurrency, another bouquet of digital assets, transferring significant amounts to prominent exchanges.

In their most recent move, a transfer of $10.8 million transpired on platforms such as Wintermute, Binance, and Coinbase. The latest transfer of $10.8 million was spread across eight tokens: $2.58 million in StepN’s GMT, $2.41 million in Uniswap’s UNI, $2.25 million in Synapse’s SYN, $1.64 million in Klaytn’s KLAY, $1.18 million in Fantom’s FTM, $644,000 in Shiba Inu’s SHIB and small amounts of Arbitrum’s ARB and Optimism’s OP.

On Oct. 24, the FTX and Alameda wallets transferred $10 million to a single wallet address, which was later redistributed to Binance and Coinbase accounts.

Report: Ex-FTX execs team up to build new crypto exchange 12 months after FTX collapse: Report

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Celsius faces hurdle as judge hints at new vote for Bitcoin mining shift

Judge Martin Glenn reportedly said that the firm’s proposed transformation into a Bitcoin mining business deviates significantly from the deal creditors initially voted on.

Celsius Network, a cryptocurrency lending platform, might need to secure a fresh vote from creditors for its planned shift to a Bitcoin mining venture, suggested a U.S.

The crypto lender provided details on Nov. 30, of its plan to only mine Bitcoin (BTC) once it emerges from bankruptcy, a scaled-down business that reflects guidance from regulators.

According to a report, Judge Martin Glenn, responsible for Celsius Network’s Chapter 11 proceedings, voiced displeasure on Nov.

Judge Glenn reportedly highlighted that the proposed transformation into a Bitcoin mining business deviates significantly from the deal creditors initially voted on, potentially encountering considerable resistance from creditors.

Celsius recently announced a scaled-back post-bankruptcy strategy, narrowing its focus to Bitcoin mining due to the U.S.

Celsius attorney Chris Koenig reportedly contended during the Nov.

As per the report, two customers, proceeding without legal representation, expressed dissent toward the agreement in the court documents, contending that Celsius should undergo complete liquidation instead.

Related: Celsius grants access to withdrawals for eligible crypto holders

Celsius filed for Chapter 11 protection in July 2022, one of several crypto lenders to go bankrupt following the industry’s rapid growth during the COVID-19 pandemic.

Under the new proposal, Celsius creditors are projected to receive a 67% recovery, surpassing the 61.2% under the previous Fahrenheit arrangement, according to court records.

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Celsius grants access to withdrawals for eligible crypto holders

Eligible participants can withdraw 72.5% of their cryptocurrency holdings minus transaction fees.

Bankrupt cryptocurrency lending platform Celsius has started withdrawals for select users in a crucial development for the company and its clients amid financial instability and legal issues.

According to a filing in the United States Bankruptcy Court for the Southern District of New York, participants in its custody program falling under “Class 6A General Custody Claims” and “Class 6B Withdrawable Custody Claims” are now eligible for fund withdrawals, with a deadline for withdrawals set for Feb.

Eligible participants can withdraw 72.5% of their cryptocurrency holdings minus transaction fees.

Following its bankruptcy filing in July 2022, the platform has navigated various legal obstacles.

Related: Zipmex proposes to pay creditors 3 cents per dollar

In a subsequent update, creditors approved the company’s reorganization plan in September, paving the way to distribute around $2 billion in Bitcoin (BTC) and Ether (ETH). 20 announcement, Celsius said the core business of the NewCo company proposed under its restructuring plan will be Bitcoin mining rather than staking.

Celsius has been maneuvering through bankruptcy proceedings and legal challenges from multiple regulatory entities.

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Former US Secret Service asst. director: Keep personal info of FTX users private

Jeremy Sheridan claimed FTX users could become the targets of physical harm as well as attacks through online scams if their information was disclosed.

Jeremy Sheridan, former assistant director of the United States Secret Service Office of Investigations, has warned that certain FTX customers could become targets if their personal information were to be made public.

In an April 20 declaration filed with the U.S. Bankruptcy Court for the District of Delaware, Sheridan supported a motion from the debtors that would withhold “certain confidential information” of FTX users. According to Sheridan, who is currently a managing director for FTI Consulting, releasing the names of customers associated with the failed crypto exchange imposes “a severe and unusual risk of identity theft, asset theft, personal attack, and further online victimization.”

“If Individual Customer Names are made public in these Chapter 11 Cases, such information will provide potential malefactors an itemized list of vulnerable targets,” said Sheridan. “In particular, it will provide malefactors with a menu of potential targets via disclosure of the Debtors’ schedules of assets and liabilities list. […] And each of the Debtors’ customers’ respective cryptocurrency holdings.”

FTX users holding large amounts of crypto, according to Sheridan, would effectively have “a target on their back” and could be victims of fraud by scammers looking at their wallets. He cited examples of common online scams conducted through email and social media, including building fake business and romantic relationships, SIM swaps and phishing attacks:

“Perpetrators of frauds and online attacks are emboldened by, motivated from and attracted to high profile cases like the Chapter 11 Cases. Adding to this environment is the fact that cryptocurrency is already an attractive target for malefactors because it is easy to liquidate, instantaneous, global and pseudo anonymous.”

The legal team representing FTX debtors released a list of creditors owed money by the exchange in January. However, the roughly 10 million users’ names and personal information had been redacted. A group of media outlets, including Bloomberg and The New York Times, has objected to the redaction, claiming that the press and public had a “right of access” to the information.

Related: FTX CEO says he is exploring rebooting the exchange: Report

Judge John Dorsey extended the time that customer information could be redacted until April 20, also expressing concern that users could be put “at risk” with their names going public. FTX debtors and the committee of unsecured creditors filed a motion when the extension was set to expire requesting the bankruptcy court revisit the redaction order. The matter is scheduled for a May 17 hearing, depending on objections filed.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

3AC founders’ OPNX exchange claims to be funded by AppWorks, SIG, MIAX Group

DeFi firm Nascent was also claimed as a backer, but it has clarified that it only bought FLEX tokens from the company’s previous incarnation.

OPNX, an exchange jointly founded by members of the Three Arrows Capital (3AC) and Coinflex teams, has revealed the venture capital firms purportedly backing it. An April 21 video posted by the company featured CEO Leslie Lamb thanking some of the major backers of the project, including AppWorks, Susquehanna (SIG), DRW, MIAX Group, China Merchant Bank International, and Token Bay Capital.

OPNX has been heavily criticized in the crypto community for its association with Su Zhu and Kyle Davies, founders of the bankrupt 3AC hedge fund. Some firms have claimed they may refuse to associate with anyone who helps fund the new exchange. But the company behind the project has defended itself, arguing that it will help make customers of failed crypto ventures whole again.

OPNX will allow traders to buy and sell claims against bankrupt firms such as 3AC and FTX, according to early fundraising documents.

According to the video uploaded on April 21, the backers of OPNX have previously funded various tech and financial projects. SIG was one of the early backers of TikTok, and MIAX Group owns a U.S.-regulated equities and options exchange. AppWorks is also listed on Crunchbase as a partial owner of Uber.

At least one of the firms mentioned in the video has denied funding the project. DeFi trading firm Nascent stated that it bought Coinflex tokens issued by the company’s previous incarnation but did not participate in a funding round for OPNX.

Three Arrows Capital was a crypto hedge fund founded in 2012. In June, it was issued a notice of default by Voyager Digital after allegedly failing to pay 15,250 Bitcoin (BTC) and 350 million USD Coin (USDC) that had been loaned to it. The hedge fund filed for bankruptcy on July 1, and some creditors have accused the founders of being “on the run” or hiding from the bankruptcy court.

FTX has recovered $7.3B in assets, will consider rebooting exchange

Sam Bankman-Fried’s failed cryptocurrency exchange filed for bankruptcy in November 2022 and has since been mired in court proceedings.

Cryptocurrency exchange FTX may be considering restarting in the future, according to the legal team behind the debtors.

In an April 12 hearing in the United States Bankruptcy Court for the District of Delaware, lawyers with Sullivan & Cromwell representing FTX said the crypto firm had recovered roughly $7.3 billion in liquid assets. A March filing from the debtors reported the four FTX company silos had roughly $4.8 billion in scheduled assets as of November 2022, with an investigation into the assets ongoing.

According to the legal team, FTX will also consider restarting its crypto exchange operations sometime in the second quarter of 2024 — suggesting a reboot as early as April. FTX CEO John Ray was reportedly mulling reviving the bankrupt exchange in a January interview.

The price of the FTX Token (FTT) surged from $1.32 to $2.80 at roughly the same time lawyers announced the potential reboot of the exchange — an increase of more than 112%. The token price had largely stayed between $1 and $2 since the firm’s bankruptcy filing.

At the same hearing, the bankruptcy judge denied a motion that would have allowed the court to prioritize reimbursing former FTX CEO Sam “SBF” Bankman-Fried’s legal fees. He left the door open for SBF to present evidence to the court in the future regarding the motion.

“Frankly, I have zero evidence to establish cause here,” said Judge John Dorsey. “Mr. Bankman-Fried did not put out any evidence whatsoever as to the balancing of the equities here, what harm is going to occur to him. I don’t know what other insurance policies he has access to, I don’t know what other assets he has access to privately that would allow him to cover these costs and then recover them later under this policy.”

Related: SBF says Sullivan & Cromwell contradicted itself with insolvency claims

The bankruptcy court proceedings followed the debtors’ announcement that a Swiss court had granted a petition allowing the sale of FTX Europe AG, the firm’s European arm. FTX Europe AG, along with 133 other subsidiaries, was part of FTX’s Chapter 11 filing in U.S. bankruptcy court in November 2022.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

Update (April 12 at 6:17 pm UTC): An earlier version of this article said FTX would consider rebooting in the second quarter of 2023, which was incorrect. The correct year is 2024.