Is your money safe from the Crypto winter?
As the contagion spreads right across the sector every day, it becomes clearer and clearer.
We do not know how deep these problems run.
I'm Joel Flynn.
Welcome to The Daily Forkast, July 7th, 2022.
Sam Bankman-fried owes more than we knew to Voyager Digital.
Genesis could be on the hook for hundreds of millions of dollars and Celsius continues
to fight for its survival.
This is what's happening from Asia to the world.
Join thousands of NFT traders who already start their day on CryptoSlam.
How much money does your crypto exchange owe right now?
That is a question that every crypto investor is asking as the extent of borrowing across
the sector continues to shock us.
The latest twist today involves a man increasingly at the center of the crypto contagion story.
Sam Bankman-fried.
It has just become clear that one of his companies owed $377 million to Voyager Digital.
Voyager yesterday, of course, filed for bankruptcy.
What ultimately brought it down was the fact that it owed US$650 million to the bankrupt
Three Arrows Capital.
In the wake of Voyager's problems, Bankman-fried's Alameda Research gave Voyager a credit line
of US$500 million.
SBF also has a vested interest in ensuring Voyager survives, though not only does this
loan also obligate them, but Alameda and its venture arm own almost 10% of Voyager's shares.
A huge amount of exposure there.
Those were suspended by the Toronto Stock Exchange yesterday following the bankruptcy
filing of Voyager Digital.
The shares in Toronto could imminently be delisted.
Meanwhile, Genesis loans to 3AC and Babel Finance could cost it hundreds of millions
of dollars as well.
Genesis boss Michael Moro has said the company was forced to sell collateral and take other
steps to offset those costs.
That of course, was in the wake of 3AC not meeting a margin call on some of its crypto
bets and ultimately potentially infecting most of the industry, it seems at this point.
Officially, the amount loaned to 3AC by Genesis hasn't been made public yet, so we don't know
that for sure.
But Genesis parent company, Digital Currency Group, is stepping in to help absorb some
of these staggering losses.
Here is the takeaway from all of this.
Crypto firms everywhere have been lending astronomical amounts of money to each other,
and in some of these cases, it was money they didn't have.
The questions now that we have are who else is involved?
Does this go further than crypto?
And how much of your money is at risk?
Igneous Terrenus from crypto exchange Bybit told Forkast he reckons there is much more
to come.
There could be more institutions, platforms, insolvent.
They are just not showing it yet.
They are just soldiering on or, you know, link linking on some of them just because
kind of they are able to kind of fly under the radar.
They might be able to kind of become a zombie for months, for years to come, so long as
they can just find enough money to keep the lights on.
It is vital we stay as informed as possible during all of this uncertainty.
Forkast is where you will find out what is happening.
Head to our website Forkast.News to find out more.
There is a link in the description below like this video and subscribe to stay updated every
day on the latest on the contagion on the crypto winter and what it all means for you.
Celsius is one of those fighting for its survival.
The embattled crypto lender has just reshuffled its board of directors.
That is according to a filing published on Wednesday.
Forkast's Monika Ghosh has the details.
Celsius Network's filing with the UK's Companies House shows that David Barse and Alan Jeffrey
Carr were appointed to its board at the end of June.
Barse is the founder and CEO of Xaut Capital, a company which specializes in identifying
companies whose stocks should be removed from indices.
And Carr is the founder and CEO of Drive Train, which helps financially distressed companies
restructure.
The filings also show that three directors were terminated in late June.
Among them, John Steven Dubel and Gilbert Nathan, both of whom had only been appointed
less than two weeks prior to Bell, who lasted just eight days, is the founder of Dubel and
Associates, which also provides restructuring services to underperforming companies.
The reshuffle follows Celsius halting withdrawals and transfers on June 13.
The platform's native CEL token has fallen almost 10% in 24 hours, trading at US$0.83
at 2 p.m. Hong Kong time today.
I'm Monika Ghosh for Forkast.
Well, much of Crypto's problems right now stem from the collapse of Terra Luna.
As we know, that is still reverberating.
It's just been reported that South Korean fintech startup Uprise lost 99% of client
funds in the collapse.
The total was just over US$20 million, in addition to US$3 million of its own money.
The losses come from a short bet against Luna Classic at the time, of course, just called
Luna.
Uprise says it is looking at how to compensate investors.
Meanwhile, South Korea's Justice Minister has met with US officials to talk about cooperating
on crypto crime, according to local media, that includes sharing data on cases like Tara
Luna.
South Korean prosecutors are looking into possible fraud charges over the collapse.
The US Securities and Exchange Commission, of course is also looking into criminal charges
for TerraForm Labs co-founder Do Kwon.
And finally, fashion shows have been moving from the exclusive catwalks of Paris and Tokyo
into the metaverse that potentially opens them up to millions.
And influencers in places like China are leading the way.
Forkast's Jenny Ortiz takes a look.
Xiaohongshu is China's equivalent of Instagram with over 140 million daily users.
And it's developing niche services for fashion bloggers who want to show off their stuff
in virtual clothes based on NFT.
But how is this possible?
Vlogger Lin Er San, who has 13,000 followers, shared his experience of buying and wearing
virtual NFT clothes.
She explained how she sent the unique code for her virtual dress NFT along with her photo,
which the designer used to show her wearing the dress.
The silvery white dress called Galaxy Heart costs almost ¥400 or about US$60.
Lin Er San's video got 20,000 likes, while her photo wearing the dress received 1500
reactions.
Xiaohongshu, who has seized the opportunity it sees in NFT clothes by recruiting virtual
fashion designers since May, it also began promoting new clothes on the NFT marketplace
every Friday.
Yanie Durocher, co-founder of Pompom, a Shanghai based marketing firm for fashion brands, also
sees opportunity in NFT fashion.
Imagine you're a Gen Z and you're all the time on TikTok or whatever.
There is actually a bigger value to show your product to 500,000 people rather than maybe
you're in a physical evening with 20 people, you can only show it to 20 people.
Over 130 virtual fashion designers have already put out around 300 items on Xiaohongshu's
NFT Marketplace and Chen Peng Studio is one of the pioneers.
Speaking to Forkast, designer Chen Peng said he used 3D modelling tools to get a preliminary
experience of digital fashion.
He added that with digital fashion he was more able to express the understanding and
possibilities that their brand wants to convey.
However, the downside is that vloggers have noted there's much to improve on where the
virtual garments live.
Lin Er San explained that after being photographed, the garments lifespan has been exhausted and
current metaverse costumes can only be worn on a still photo, which is limiting.
Another vlogger, Jane Xu, argues a virtual fashion can be improved by shortening the
time to put on the clothes.
She said what makes the consumer happiest is to wear the newly bought item immediately,
not after a 3 to 7 day waiting time.
I'm Jenny Ortiz for Forkast.
All right.
That is it for The Daily Forkast.
Make sure you follow us on Twitter for the latest updates @Forkast_News.
There is a link to that down below.
I'm Joel Flynn.
I'll see you next time.