Alameda Research sues Voyager Digital / South Korea launching a crypto-tracking system / Judge offers clarity on SEC v. LBRY verdict

Also, Greenidge Generation reduces debt by $61M

Inside.com Part of   Network January 31, 2023

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Embattled crypto investment firm Alameda Research filed a lawsuit against Voyager Digital to recover $445.8M in repaid loans.  Lawyers managing the FTX and Alameda bankruptcy case filed the suit in a Delaware court on Jan. 30. More:  FTX admits that Alameda used FTX customer deposits and claims that Voyager and other crypto lending firms also "knowingly or recklessly" funneled customer funds toward Alameda with "little or no due diligence." "Voyager's business model was that of a feeder fund."  Voyager claims that all loans were fully repaid before FTX and Alameda filed for bankruptcy late last year. Alameda paid Voyager almost $249M in September and $194M in October, including a $3.2M interest payment in August. To make matters worse, FTX.US had won the bid to acquire Voyager and was also one of Voyager's shareholders.

The Ministry of Justice in South Korea is launching a crypto-tracking system to counter money-laundering activities. The "Virtual Currency Tracking System" is designed to monitor transaction history and the source of funds before and after the remittance.  More:  The ministry plans to launch its tracking system during the second half of 2023. In the meantime, it will use third-party software to monitor illicit transactions. "In response to the sophistication of crime, we will improve the forensic infrastructure (infrastructure). We will build a criminal justice system that meets international (global) standards." The South Korean police are currently collaborating with five local crypto exchanges, including Upbit, Bithumb, Coinone, Corbit, and Gopax, to monitor criminal activities.  Bithumb is being probed for tax evasion and price manipulation.  Prosecutors have raided the company's offices to gather evidence over price manipulation allegations.  The tokens that are being probed include Pixel Coin and GoMoney2. South Korean lawmakers also want to move forward with crypto regulations by drafting the Digital Asset Basic Act.  The country's judiciary has also started delisting tokens that fail to provide proper disclosures.

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Greenidge Generation, a Bitcoin miner, has reduced its debt by $61M by landing a deal with NYDIG. Greenidge Generation (GREE) and B. Riley Financial (RILY) have reached an agreement to assist in restructuring by offering an $11M promissory note that is owed.  More:  Greenidge Generation, a crypto mining fir,m was hit hard during last year's market turmoil due to the company's reliance on natural gas which caused its margins to drop 20%.  In efforts to prevent a potential bankruptcy situation, the company has finalized its debt restructuring plan, which includes raising $1M in a stock sale underwritten by B. Riley.  This also includes a $1.9M principal payment on the note, reducing the balance to $9M.  To save additional cost. Greenidge will offload some of its real estate footprint in the South Carolina mining facility.  Other conditions include paying off $6M or more before June, then monthly payments that will be reduced to $400,000 instead of $1.5M.

Last year a court reached a verdict in the SEC v. LBRY case for offering unregistered securities. The court ruled in favor of the SEC, claiming that the company was offering unregistered securities.   More:  The SEC claimed that LBRY raised over $11M in crypto, which it argued was an investment contract and should be classified as a security. LBRY rejected the SEC's argument by saying the token, LBC, is not a security since it had no initial coin offering (ICO). The SEC won the case on Nov. 7, 2022, after a judge sided with the SEC and deemed the token a security.  LBRY wrote in a statement on Twitter soon after the verdict was passed, saying the company "will likely be dead in the near future." LBRY appealed on Jan. 30, 2023.  Judges made it clear that the judgment was only for selling the project's token directly; the LBRY v. SEC verdict will likely drive a more anticipated ruling in the XRP lawsuit.

Chris Tyrer, head of digital assets at Fidelity Investments, has departed the firm. He served as president of Fidelity Digital Asset Management before leading the institutional side.  More:  Fidelity launched its crypto-focused institutional custody and trading platform, Fidelity Digital Assets, in 2018. The firm is one of the first financial services firms to offer crypto trading services. Tyrer's led his team to launch Fidelity Crypto, a commission-free trading product for retail investors to buy and sell Bitcoin and ether on the platform. The platform also offers zero-commision trading for Bitcoin and Ether.

Judge Lewis Kaplan in Manhattan ruled in favor of media outlets to reveal the names of people who enabled SBF's $250M bond. The names of individuals will remain undisclosed until Feb. 7. The former FTX founder is currently living at his parents' home and under house arrest.  More:  SBF's attorneys previously declined to reveal the names arguing they would suffer from harassment.  For instance, Bankman-Fried's parents have received multiple threats and communications that they will "suffer physical harm."  However, Judge Lewis Kaplan ordered that the public has the right to access to "all information related to SBF's bail." The judge allowed the defense up to Feb. 7 to appeal the decision.

QUICK HITS This year, try a resolution that sticks — going to therapy with BetterHelp. Save 25% off your first month.* Tax season is coming soon, and here is a guideline for reporting your crypto gains.  Oxford Student who stole £2M worth of cryptocurrency has been jailed.  Dogecoin and Shiba Inu rose as the price of Bitcoin stalled. Automation is your finance team's best productivity strategy. See five finance tasks you should be automating today.* *This is a sponsored post.

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Gia Mattu is based in Calgary, Alberta. She is an entrepreneur with experience in climate technology, drones, AI, machine learning, and blockchain technology. When she's not working, she loves to hike the Canadian Rockies, try new cuisine, and travel.  Editor Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords.

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