Crypto Flipsider News – 3AC Accusation; Genesis Arbitration; Italy 26% Tax; Ethereum Activity Falls; SCB Rejects FTX Claims

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Read in the Digest:

• 3AC Co-Founder Alleges that DCG and FTX Attacked Terra LUNA and stETH

• Gemini Client’s File Class Action Arbitration Against Genesis Global Capital

• Italian Parliament Approves 26% Tax for Cryptocurrency Gains in 2023

• Ethereum Mainnet Daily Transactions Drops to Lows Last Seen in April 2020

• Bahamas Regulator Rejects FTX’s Claims About Request to Mint New Tokens

3AC Co-Founder Alleges that DCG and FTX Attacked Terra LUNA and stETH

Su Zhu, the co-founder of the bankrupt fallen hedge fund Three Arrows Capital (3AC), has taken to Twitter to accuse Digital Currency Group (DCG) and FTX of conspiring to attack Terra LUNA and staked Ethereum (stETH).

According to Su Zhu, DCG made profits from the collapse of LUNA but acquired losses from the bankruptcy of 3AC. However, Zhu adds that DCG “magically filled the hole” instead of restructuring from the losses.

In the Twitter thread, he also accused DCG and FTX of misdirection and using various methods to attack 3AC. He alleged that both companies used the collapse of 3AC to take more deposits while insolvent, hoping that the market would go up.

He adds that this was possible because of the closeness shared between Barry Silbert, the CEO of DCG, and Sam Bankman-Fried of FTX.

Flipsider:

• In reaction, the crypto community has called out Su Zhu for blaming others and not taking accountability for the collapse of his hedge fund.

Why You Should Care

The claims of Su Zhu add another twist to the bankruptcy proceedings of 3AC, where liquidators have said that the founders are not cooperating with the investigation.

Gemini Client’s File Class Action Arbitration Against Genesis Global Capital

On December 30th, 2022, three Gemini Earn users represented by Silver Golub & Teitell LLP (SGT) filed a request for class action arbitration against Genesis Global Capital and Digital Currency Group for breach of contract and sale of unregistered securities.

The claimants allege that Genesis initially breached its Master Agreement when the firm failed to notify users when it went insolvent in the summer of 2022. Genesis would fail to reveal its insolvency until November.

According to the filing, instead of notifying users, DCG acquired the right to collect a $2.3 billion debt that the now-insolvent hedge fund Three Arrows Capital (3AC) owed to Genesis for a promissory note of $1.1 billion due in 2033.

The class arbitration filed with the American Arbitration Association (AAA) also asserts that the suspension of the Genesis Earn redemption program due to Genesis freezing withdrawals on November 16, 2022, led to Genesis selling unregistered securities.

Flipsider:

• There is also another lawsuit filed against Gemini by Brendan Picha and Max J. Hastings for offering unregistered securities via its Gemini Earn program.

Why You Should Care

The claimants want all transactions contained in the Master Agreement rescinded because they constitute unregistered sales of securities.

Italian Parliament Approves 26% Tax for Cryptocurrency Gains in 2023

The Italian Parliament has approved a 26% capital tax on cryptocurrency gains above 2,000 euros (approx. $2,060) during a tax period as part of the country’s budget law for 2023.

The new framework was first proposed on December 1st, 2022, and was approved by the Senate on December 24th. Following parliamentary approval, the new tax regime came into effect on December 30th.

To encourage crypto traders to declare their holdings, the parliament approved a 3.5% aliquot for undeclared cryptocurrencies held before Dec. 31, 2021, and a 0.5% fine for each additional year.

The new bill also has an additional incentive that would set a “substitute income tax” for investors at 14% of the value of the assets held as of January 1st,2023, instead of the cost at the time of purchase.

Flipsider:

• As part of the new law, crypto losses over 2,000 euros will count as tax deductions and can be carried over to the next tax period.

Why You Should Care

The crypto tax is part of Italy’s broader effort to create a comprehensive cryptocurrency regulation. Much of the world is doing the same.

Ethereum Mainnet Daily Transactions Drops to Lows Last Seen in April 2020

Ethereum, like most of the crypto market, has shown less volatility over the last two weeks, consistently trading above the $1,200 mark. Despite the new-found stability, Ethereum’s network activity is underwhelming.

According to data from the block explorer for the Ethereum blockchain, Etherscan.io, the daily transactions on Ethereum fell to 742,000 – levels that were last recorded on the mainnet in April 2020.

At the time of this writing, the daily number of transactions on the mainnet is 920k. Despite the slight recovery noted over the past day, the number continues to hover around its lows.

Flipsider:

• Santiment’s price prediction model, based on network activity, suggests that Ethereum still requires “some increased network utility” to justify its current market cap.

Why You Should Care

For the price of Ethereum (ETH) to organically bounce back, the transaction metrics must improve in the coming days.

Bahamas Regulator Rejects FTX’s Claims About Request to Mint New Tokens

The Securities Commission of The Bahamas (SCB) released a statement on January 3rd to correct material misstatements made by the CEO of bankrupt FTX, John J. Ray III, about the value of FTX assets under custody.

The FTX CEO had claimed that FTX was instructed by the Commission, under oath, to mint a substantial amount of new digital assets. The debtors also alleged that the Commission “stole” FTX users’ assets under its control without backing their claim with valid proof.

According to the Bahamian regulator, the public statements made by FTX defamatory as they were based on “incomplete” information, and the debtors failed to utilize their ability to request information from the “Joint Provisional Liquidators.”

The statement ended with the Commission expressing hope that Chapter 11 will be willing to consider the best interest of FTX customers. FTX also disputed SCB’s calculations, saying the digital assets seized in November were worth $296 million and not $3.5 billion.

Flipsider:

• According to the SCB, FTX withholds its record that will allow the Court access to the AWS System, compromising the Commission’s investigation.

Why You Should Care

The statement from the SCB is in response to initial reports that the regulator asked SBF to mint new digital assets worth hundreds of millions of dollars.

See original on DailyCoin