The market may be up as the week draws to a close, but crypto turmoil shows no signs of abating. There is more news about Three Arrows Capital (3AC), Celsius (CEL) is back in the spotlight and Voyager's problems get worse. Here are the latest news in the crypto sector
Legal developments of Celsius Yield farming pioneer Jason Stone, CEO of KeyFi, has filed a lawsuit against Celsius, the struggling cryptocurrency lender. Stone's legal team says Celsius did not comply with the contracts and asked a U.S. subsidiary, the New York Supreme Court, to compensate him in an amount that would have been "determined at trial." The deposit claims that Celsius used client funds in an attempt to "manipulate the crypto markets" and states that Celsius "did not establish basic accounting controls," which "endangered those same deposits." Celsius Refunds While Celsius hopes to avoid legal struggles like the above case, it has also been busy trying to stabilize its situation. Data provided by Nansen seems to show that Celsius deposited $500 million worth of wrapped bitcoin (WBTC) on the platform of cryptocurrency exchange FTX, shortly after settling off its debt with credit institution Maker (MKR), claiming $450 million in WBTC collateral.
On Twitter, Nansen joked that "there is nothing to see here." 3AC funds must be "safeguarded" Everyone who has anything to do with the 3AC has followed the events in the British Virgin Islands with great interest. The nation's latest Supreme Court ruling in bankruptcy proceedings includes an order to liquidators to "protect the value of the company's assets from market volatility." This will effectively mean that liquidators will have the power to convert 3AC's crypto holdings into fiat or fiat-pegged stablecoins such as tether (USDT). In addition, the ruling includes a list of creditors, including 3AC co-founder Su Zhu and Kelly Kaili Chen, the wife of his fellow co-founder Kyle Davies. The creditors on the list would be the first in line to receive the repayment, while it is indicated that the two probably invested a large part of their personal fortunes in the company. We are not 3AC, says TPS Over-the-counter (OTC) cryptocurrency trading company TPS Capital has moved to distance itself from 3AC. It previously called itself the "OTC trading arm" of 3AC, but turned to Twitter to issue a statement calling itself "an independent legal entity" whose "operations are separate and distinct from those of 3AC." The company explained: "3AC was a shareholder of TPS for a very short period immediately after the incorporation of TPS in December 2020, but has not held shares in TPS since January 2021. Su Zhu and Kyle Davies each have an indirect stake in TPS." TPS, however, said Zhu and Davies were "passive investors" who "do not manage or have any direct control over [TPS'] day-to-day operations." Voyager's problems get worse Clients of cryptocurrency broker Voyager Digital who were hoping for a break from the US Federal Deposit Insurance Corporation (FDIC) – which insures accounts of up to $250,000 per depositor in the event of a bank failure – may be unlucky. Voyager's banking partner, Metropolitan Commercial Bank, issued a statement on the matter. Economist Frances Coppola, who shared the statement on Twitter, wrote it was "bad news" for customers, as FDIC does not provide protection against Voyager Digital's failure. Voyager declared bankruptcy this week, but the Metropolitan Commercial Bank explained: "The Metropolitan Commercial Bank maintains a specifically designated omnibus account for the benefit of Voyager customers. The omnibus account contains only US dollars. It does not hold cryptocurrencies or any other assets. FDIC insurance does not protect against the bankruptcy of Voyager, any act or omission of Voyager or its employees, or the loss of value of cryptocurrency or other assets. Meanwhile, there have been further developments on the Voyager front, by Alameda Research, the quantitative cryptocurrency trading company founded by FTX chief Samuel Bankman-Fried. happy to return the Voyager loan and get our collateral back whenever works for voyager — Alameda Research (@AlamedaResearch) July 8, 2022 Leading software engineer and crypto trader Eric Wall intervened on the issue.