© Provided by TheStreetAlthough cryptocurrency prices have recently shown life, investors are still suffering from fraud and losses.
Cryptocurrency prices have shown signs of life as investors sort through the wreckage of industry failures and scandals.
Bitcoin ( ~BTCUSD ) is down 1% from $18,120.31 on January 12, according to data company CoinGecko, but is up 7.2% this week.
The parent currency of the Ethereum blockchain, Ether, fell 1.2% to $1,383.85 but gained 10% for the week, while Dogecoin fell 1.8% to $0.077114, up 5.3% in the past seven days.
"It looks like bearish sentiment has returned to highs this week," said James Edwards, crypto expert at Finder. "This week saw the biggest price rally since the FTX crash, driven by a dog-like cryptocurrency called Bonk."
Crypto investors are reeling from the collapse of FTX and other high-profile failures, including the Celsius Network, which filed for bankruptcy in July.
David Lesperance, managing partner of immigration and tax advisory firm Lesperance & Associates, said cryptocurrency investors are getting bad news from failed companies like Celsius.
Judge Martin Glenn, United States Bankruptcy Judge for the Southern District of New York, ruled that the percentages, not the investors, own the assets in their accounts.
"The judge found that Celsius' terms of service (long agreements posted on many websites but read by few consumers) made the crypt assets the property of Celsius," Lesperance said.
"Other platforms have similar terms of service to Celsius, so this precedent sets the tone for how other failed crypto companies' assets will be named ."
Crypto failure costs investor privacy
Celsius had about 600,000 accounts in the Earn program, and its accounts were $4.2 trillion on July 10, 2022, according to Glenn's decision.
New York State Attorney General Letitia James on January 5 filed a lawsuit against Celsius Networks founder and CEO Alex Mashinsky, accusing him of "repeatedly making false statements and misrepresenting the security of the Celsius platform in order to induce investors to pour billions of dollars into the digital asset platform".
Winston Ma, an associate professor at the New York University School of Law, said that the FTX case will have a new unintended consequence: Crypto failures will take investors away from anonymity.
Blockchain and Web3 Author Ma, Building Cryptocurrency, Privacy and . Metaverse security base.
Hundreds of thousands of Celsius customers have lost their identities as a result of the Chapter 11 filing, after a court in September forced them to reveal the names and amounts of account holders.
Using Delaware bankruptcy court records, CNBC assembled a larger group of high-profile investors and top financiers than previously disclosed, including Alibaba founder Joe Tye, New England Patriots owner Robert Kraft and billionaire hedge fund manager Paul Tudor. , among others.
A public discussion between participants in the cryptocurrency crash will reveal more details, he said. In the past, lenders with little knowledge - small depositors - were ordinary people.
Crypto investor Genesis owes $297 million.
"They'll talk to the press, broadcast their own videos, scan highlight sessions, or interrupt court breaks to play music," he said. Their names have been released, but many local and international donors have not been identified.
According to Ma, in the new year, even big actors are talking on Twitter and other public channels. He cited Cameron Wincliffes, co-founder of cryptocurrency exchange Gemini, who accused billionaire cryptocurrency group CEO Barry Silbert of accounting fraud.
Finder Edwards says FTX is old news and DCG is "the new multi-billion dollar elephant in the room."
"The outlook for the overall cryptocurrency market will focus on how the company handles indebted subsidiaries, including Genesis, a lender that owes $1.1 billion to Gemini," he said.
"Gemini Earn used Genesis to generate 8% returns for its users, and on Tuesday Gemini officially wrote off its debt to Genesis to force it to pay."
The problem, Edwards added, is that “it's an open secret that Genesis struggles to make payments on time, given the current market conditions and the fragility of the cryptocurrency banking landscape.
"Gemini is also frustrated by the collective action its users are taking through Earn," he said.
In response, Edwards said, Wycliffe posted open letters and tweets targeting Silbert, urging him to fire the board and blame him for Genesis' mismanagement and ultimately user suffering. by Gemini.
"Dutch exchange Petfau is bloodthirsty," said Genesis, which owes $297 million. "DCG has stated that the proposed payment plan is unacceptable and that it is fully liquidated and has the ability to repay the two Genesis loans."