Wall Street Journal

Non-US FTX customers want private info redacted from bankruptcy filings

The group stressed that publicly revealing the names and private information of customers runs the potential risk of identity theft, targeted attacks and “other injury.”

A group of non-U.S. FTX customers are pushing to have their names and private information redacted from court documents as part of the crypto exchange’s Chapter 11 bankruptcy process.

In a Dec. 28 joinder filing, the “The Ad Hoc Committee of Non-US Customers of FTX.com” (Ad Hoc Committee) stressed that publicly revealing the names and private information of customers runs the potential risk of identity theft, targeted attacks and “other injury.” It said:

“Requiring the Debtors to disclose the FTX.com customers’ names and other identifying information to the general public would cause irreparable harm, further victimizing the FTX.com customers whose assets were misappropriated.”

The group is comprised of 15 people in individual or representative capacities, suggesting there is a far greater number in the group. In total, the Ad Hoc Committee claims to represent people or entities with around $1.9 billion worth of locked assets in FTX.com.

A joinder refers to a type of court filing in which several suits have been joined together, or an additional party has attached itself to another filing.

In this instance, the Ad Hoc Committee is jumping on the “Motion of Debtors for Entry of Interim and Final Orders,” which seeks to withhold confidential customer information, among other things.

“The Ad Hoc Committee submits this Joinder in support of the Redaction Motion’s request to redact names and all other identifying information of the FTX.com customers from any paper filed or made publicly available in these proceedings, including the Creditor Matrix, Consolidated Top 50 Creditors List, and Schedules and Statements,” the filing reads.

The U.S. Trustee has previously filed an objection to the original motion on Dec. 12 however, arguing that keeping information private could threaten the transparency of FTX’s Chapter 11 bankruptcy process and that the public had a “general right of access to judicial records.”

Publications such as The Wall Street Journal (WSJ), The New York Times, Bloomberg and the Financial Times have even called for the information to be disclosed to the public, arguing that’s what usually happens in these types of bankruptcy procedures.

“Bankruptcy courts normally require transparency into the affairs of troubled businesses, including their creditors, in return for the protections of Chapter 11,” WSJ journalist Andrew Scurria wrote on Dec. 29.

A similar incident has already occurred in the Chapter 11 bankruptcy of Celsius, with court documents revealing private information about thousands of customers back in October, much to the dismay of the crypto community.

Meta reportedly plans ‘large-scale layoffs,’ but what of its metaverse division?

As of the end of September, Meta had more than 87,000 employees — a large proportion of which is said to work in the Reality Labs division.

Social media and tech giant Meta is reportedly gearing up for “large-scale layoffs” this week amid rising costs and a recent collapse of its share price.

According to Wall Street Journal (WSJ) report on Nov. 6 citing people familiar with the matter, the planned layoffs could impact thousands of employees in a broad range of divisions across Meta’s 87,000-strong workforce.

It is not currently understood whether the firm’s Reality Labs division, which registered a $3.7 billion loss in the third quarter, would see staff cuts.

Last week, Meta CEO Mark Zuckerberg said that the company would be focusing its investment on “a small number of high-priority growth areas,” including its Artificial Intelligence (AI) Discovery Engine and its advertisement and business messaging platforms in addition to the Metaverse, stating:

“So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year […] In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.”

During the earnings call, the billionaire entrepreneur appeared to double down on the firm’s investments in these areas, saying he believes they’re “on the right track with these investments” and should “keep investing heavily in these areas.”

The report comes only a week after Meta reported its third-quarter earnings, which missed revenue expectations and saw a rise in its operating costs. Its stock price also took a battering, with shares in Meta currently priced at $90.79 — down 7.56% over the last five days and 73.19% year-on-year, according to Yahoo Finance.

The company appears to still be actively hiring into its metaverse division regardless, with its list of job openings revealing 38 of its 413 listings are related to Augmented Reality and Virtual Reality.

Cointelegraph has reached out to Meta for clarification and whether there would be any changes to its metaverse division but did not receive an immediate response.

Meta reportedly plans ‘large-scale layoffs,’ but what of its metaverse division?

As of the end of September, Meta had more than 87,000 employees — a large proportion of which is said to work in the Reality Labs division.

Social media and tech giant Meta is reportedly gearing up for “large-scale layoffs” this week amid rising costs and a recent collapse of its share price.

It is not currently understood whether the firm’s Reality Labs division, which registered a $3.7 billion loss in the third quarter, would see staff cuts.

Last week, Meta CEO Mark Zuckerberg said that the company would be focusing its investment on “a small number of high-priority growth areas,” including its artificial intelligence (AI) Discovery Engine and its advertisement and business messaging platforms in addition to the metaverse, stating:

“So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year […] In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.”

The company appears to still be actively hiring into its metaverse division regardless, with its list of job openings revealing 38 of its 413 listings are related to augmented reality and virtual reality.

Cointelegraph has reached out to Meta for clarification and whether there would be any changes to its metaverse division but did not receive an immediate response.

Contagion: Genesis faces huge losses, BlockFi’s $1B loan, Celsius’s risky model

A leaked investor call from Morgan Creek Digital suggests BlockFi liquidated 3AC for $1 billion, while Celsius reportedly maintained a highly risky assets-to-equity ratio last year that may have caused its recent liquidity woes.

It’s been another day of watching the ripples of contagion spread through the crypto market.

With Three Arrows Capital (3AC) being ordered into liquidation by a British court, details have also emerged on Thursday of BlockFi liquidating a $1 billion loan to 3AC, and the fallout from the insolvency was partly to blame for lending firm and market maker Genesis Trading facing losses of “a few hundred million dollars.”

Withdrawals remain suspended at the possibly insolvent lending and borrowing platform Celsius , which was revealed to have had a highly risky 19 to 1 assets-to-equity ratio before it ran into liquidity troubles this year.

Celsius’ risky business

According to documents reviewed and reported on by the Wall Street Journal (WSJ) on Wednesday, Celsius was operating on very fine and risky margins as it ballooned in value over 2021.

According to documents prepared before the last equity raise, Celsius, which claimed to be a less risky alternative to a bank, had an assets-to-equity ratio of $19 billion to $1 billion midway through last year while also issuing out many loans that were undercollateralized.

The assets-to-equity ratio refers to the proportion of a firm’s assets that have been funded by shareholders. The ratio generally represents an indicator of how much debt a firm has leveraged to finance its operations, with higher ratios often suggesting a firm has utilized substantial financing and debt to remain afloat.

The ratios differ from sector to sector, as do the assets held by the specific entities. However, Celsius’s already high 19-to-1 ratio is seen as extra risky due to the firm’s exposure to crypto, leverage and lending.

Eric Budish, an crypto-versed economist at the University of Chicago’s business school, stated that “It’s just a risky structure,” as he likened Celsius’ operations to that of financial firms in the lead-up to the 2008 housing bubble:

“It strikes me as diversified as the same way that portfolios of mortgages were diversified in 2006. It was all housing— here it’s all crypto.“

Reports also surfaced that Voyager Digital has sent more than $174 million to Celsius over the past few months. The transactions were confirmed by analytics platform Nansen this week. However, the nature of the funding or whether it is a loan is unclear.

Genesis facing hundreds of millions in losses

Digital Currency Group’s market maker and lending firm Genesis Trading is reportedly facing losses in the hundreds of millions, according to sources reported by DCG publication Coin Desk.

The losses relate in part to the company’s exposure to 3AC and the crypto lender Babel Finance. Genesis is putting a brave face on the losses and still has hope of receiving partial repayments, with other losses offset by hedging. CEO Michael Moro said the firm had mitigated losses with “a large counterparty who failed to meet a margin call to us:”

“We sold collateral, hedged our downside, and moved on. Our business continues to operate normally and we are meeting all of our clients’ needs.”

Battle for BlockFi

A leaked investor call from hedge fund Morgan Creek Digital confirmed the liquidation of a large unnamed client by BlockFi on June 16 was 3AC.

During the call, Morgan Creek’s managing partner Mark Yusko and co-founder Anthony “Pomp” Pompliano stated that BlockFi had “reported” to the firm the loan was worth $1 billion and overcollateralized by 30%.

Pomp went on to state that roughly two-thirds of $1.33 billion collateralization was in Bitcoin (BTC) and was immediately liquidated once 3AC was unable to make repayments. The other third was said to be in Grayscale Bitcoin Trust (GBTC) shares worth around $400 million.

Grayscale’s BTC trust is designed to be pegged to the spot value of BTC, however, it often trades for either a premium or a discount.

According to Pomp, BlockFi ran into troubles liquidating the position as the GBTC discount dropped to around 34%, and the price went down as the firm went to sell the holdings.

With FTX reportedly planning to purchase a stake in BlockFi following the issuance of a $250 million revolving credit facility to the firm, the call also discusses how Morgan Creek was looking to raise $250 million to purchase 51% of the firm. Such a sum would give BlockFi a valuation of just $500 million, well below its reported valuation of $5 billion in June 2021.