FTX’s new chief executive officer, John J. Ray III, has said he established a task force to explore restarting FTX.com, the company’s main international exchange, as he works to return money to the failed company’s customers and creditors.

Cryptocurrency lender Genesis, which is part of cryptocurrency conglomerate Digital Currency Group, has filed for Chapter 11 bankruptcy protection in a Manhattan federal court. The firm listed over 100,000 creditors and aggregate liabilities ranging from $1.2 billion to $11 billion.

Cryptocurrency lender Nexo has agreed to pay $45 million in penalties to the U.S. Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) after failing to register the offer and sale of its Earn Interest Product.

 Top stories in the Crypto Roundup today:

• New FTX CEO Explores Restarting Exchange
• Genesis’ Lending Businesses File for Bankruptcy
• Crypto Lender Nexo Agrees to Pay $45 Million in Penalties to SEC
• Stablecoin Market Cap Dominance Rises

New FTX CEO Explores Restarting Exchange

FTX’s new chief executive officer, John J. Ray III, has said he established a task force to explore restarting FTX.com, the company’s main international exchange, as he works to return money to the failed company’s customers and creditors.

In an interview, Ray said that “everything is on the table,” and that “if there is a path forward on that, then we will not only explore that, we’ll do it.” The new FTX CEO said he would look into whether reviving FTX.com would recover more value for the company’s customers than simply liquidating its assets or selling the platform.

According to the Wall Street Journal, even if FTX retorts and gets traction, the outlook for FTX’s customers remains highly uncertain, as earlier this week the exchange identified “substantial shortfalls” of digital assets on its U.S. and international exchanges, relative to how much it owes customers.

The CEO’s new task is now to find any remaining sources of value that can help make up for a shortfall at FTX, the size of which has not been revealed. John J. Ray III has experience in restructuring struggling companies, and is famous for returning billions to Enron’s creditors.

FTX’s former CEO and co-founder, Sam Bankman Fried, who faces federal fraud and other criminal charges, has criticized the new CEO’s approach, saying it was a mistake for FTX to file for chapter 11 bankruptcy protection.

Ray’s forensics team is reportedly combing through more than 30 terabytes of FTX’s data to find information that could lead them to find more money for creditors. Last week, FTX disclosed it found $5 billion of liquid assets and a $4.6 billion investment portfolio.

Genesis’ Lending Businesses File for Bankruptcy

Cryptocurrency lender Genesis, which is part of cryptocurrency conglomerate Digital Currency Group, has filed for Chapter 11 bankruptcy protection in a Manhattan federal court. The firm listed over 100,000 creditors and aggregate liabilities ranging from $1.2 billion to $11 billion.

Three separate petitions were filed for Genesis’ holdings companies. In a statement, the firm noted the companies were only involved in Genesis’ lending business, with its derivatives and spot trading businesses continuing unhindered.

Genesis interim CEO Derar Islim said in a statement:

“We look forward to advancing our dialogue with DCG and our creditors’ advisors as we seek to implement a path to maximize value and provide the best opportunity for our business to emerge well-positioned for the future.”

The company listed a $765.9 million loan payable from Gemini in the bankruptcy filing. Last week, the U.S. Securities and Exchange Commission sued both Genesis and Gemini over the latter’s “Earn” lending program, saying it was an unregistered securities offering.

Gemini co-founder, Cameron Winklevoss, initially responded to the news on social media, saying they have been “preparing to take direct legal action against Barry [DCG’s CEO], DCG, and others.”

Crypto Lender Nexo Agrees to Pay $45 Million in Penalties to SEC

Cryptocurrency lender Nexo has agreed to pay $45 million in penalties to the U.S. Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) after failing to register the offer and sale of its Earn Interest Product.

According to a statement from the SEC, Nexo agreed to pay a $22.5 million penalty and cease its unregistered offer to U.S. investors, while an additional $22.5 million will be paid in fines to settle similar charges by state regulatory authorities.

The SEC stated that in their settlement negotiations with Nexo, they considered the company's level of cooperation and the steps they took to quickly address their shortfalls as a mitigating factor.

Nexo did not explicitly admit or deny the findings from the SEC's investigation, but reached a settlement after a cease-and-desist order agreement prohibiting the company from violating any provisions of the Securities Act of 1933.

Stablecoin Market Cap Dominance Rises

The market capitalization of stablecoins, which currently stands at $138 billion, has grown to comprise 16.6% of the total crypto market capitalization, up from 6.76% at the beginning of 2022.

Tether remains the largest stablecoin with a market capitalization of $66.2 billion, but its market share has decreased as Circle's USDC and Paxos' BUSD have grown in popularity. Decentralized stablecoins have seen less growth compared to centralized stablecoins, with DAI and FRAX, the largest in the sector, experiencing a 43.6% and 43.0% decrease in market capitalization to $5.06 billion and $1.02 billion, respectively.

Read more on CryptoCompare’s 2023 Q1 Outlook.

State of the Crypto by Top Tier Exchange Volume

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