In a May 3 filing, FTX said it intends to commence adversarial proceedings against GGC “to recover funds received by Genesis and non-debtor affiliates so that these funds can be shared with all other creditors of FTX debtors.” in FTX Chapter 11 cases”.

Officials claim FTX-affiliate Alameda Research had largely repaid the $8 billion borrowed from Genesis Trading, just weeks before the former filed for Chapter 11 bankruptcy protection.

Bankruptcy officials at FTX and Alameda Research will go to great lengths to recover funds lost by the previous administration led by Sam Bankman-Fried. The crypto exchange under John J. Ray III, CEO and head of restructuring, has sued various entities, including asking politicians on both islands to refund cash donated by SBF.

Additionally, Ray indicated that the exchange may never recover all of the lost funds, but he remains focused on getting as much as possible.

FTX at Genesis Global

According to court documents on Wednesday, current officials at FTX and Alameda Research are seeking to recover nearly $4 billion paid to DCG-backed Genesis Trading. Officials claim that FTX affiliate Alameda Research had largely repaid the $8 billion borrowed from Genesis Trading, just weeks before the former filed for Chapter 11 bankruptcy protection. funds received by Genesis and non-debtor affiliates so that these funds may be shared with all other creditors of FTX debtors in FTX Chapter 11 cases.

These creditors include several million customers who were owed more than $11 billion at the time of the filing of the FTX Chapter 11 Cases,” the filing reads. Alameda Research reportedly repaid $1.8 billion in loans to Genesis Trading and pledged $273 million over the next three months.

Furthermore, the filings noted that Genesis Trading withdrew another $1.6 billion from FTX, while Genesis Global Capital International withdrew another $213 million in that same period. As a result, a motion hearing was set for May 25 to discuss the matter in depth.

A Close Reflection

Current FTX officials have reportedly recovered around $5 billion in liquid assets, including Solana, Bitcoin, and ETH. At some point, current FTX officials are looking to reopen the exchange to accumulate more resources for debtors.

On May 3, FTX 2.0 shareholder tweeted the following:

“FTX moves to claw back $3.9 billion from Genesis:

1. $2.1 billion loan repayments/collateral pledge

2. $1.8 billion FTX exchange withdrawals.”

In a recent update from FTX debtors, Ray noted that the former officials significantly misled investors as they continued to squander their assets. “We are continuing our efforts to review the events that influenced FTX’s downfall and identify and recover the greatest possible value for creditors,” Ray said.

Current FTX officials recently said they entered into an agreement with M7 Holdings, LLC, a subsidiary of Miami International Holdings, Inc., for the sale of LedgerX LLC, FTX’s futures and options exchange and clearinghouse unit.

FTX debtors were reportedly able to recover approximately $50 million from the LedgerX LLC transaction. Meanwhile, FTX’s international entities, including the Japan subsidiary, have made great progress in paying investors.

By Audy Castaneda

The Texas Securities Board, along with several state regulators, have joined together to issue cease and desist orders against Horatiu Charlie Caragaceanu and his organizations, The Shark of Wall Street and Hedge4.ai, for promoting two cryptocurrencies called TruthGPT Coin and Elon Musk AI Token.

Caragaceanu and his companies allegedly promoted investments into nonfungible tokens and coins tokens through websites and social media. All of the tokens are now worthless, according to the Texas filing.

Joe Rotunda, director of the enforcement division at the Texas State Securities Board pointed out in an interview that the tokens are the latest reiteration of evildoers trying to leverage popular buzzwords and personalities to make money from unsuspecting investors.

The orders intend to crack down on what they claim is a fraudulent securities scheme attempting to capitalize on the growing hype around artificial intelligence (AI).

Elon Musk AI’s TruthGPT Coin

TruthGPT Coin is marketed as a cryptocurrency that uses an AI system called Elon Musk AI. The AI model can supposedly examine multiple digital assets, anticipate future cryptocurrency values and distinguish lucrative investments from fraudulent ones. The parties involved are also promoting TruthGPT Coin as a highly profitable venture, even claiming that it could increase in value by as much as 10,000 times.

The website for the TruthGPT coin also contained imagery of the likes of Ethereum Co-founder Vitalik Buterin and Changpeng “CZ” Zhao, chief executive officer of Binance, implying they are involved, the filing said. Montana, Alabama, Kentucky, and New Jersey are also filing orders against the defendants, Rotunda said.

The emergency cease and desist order claims that investors are being falsely informed by Elon Musk’s endorsement of TruthGPT Coin, and animated avatars and images of Musk are being used to give the impression of his support. Promotional media also shows the alleged involvement of other public figures, such as Changpeng “CZ” Zhao, founder and CEO of Binance, and Vitalik Buterin, co-founder of Ethereum.

Securities Commissioner Travis J. Iles warned, “Bad actors continue their attempts to profit from this broad public interest.” He explained:

“They are devising schemes that create the appearance that they have developed sophisticated artificial intelligence platforms – but instead of being rooted in artificial intelligence, the offerings are too often nothing more than frauds.”

Texas State Securities Board Director of Enforcement Joe Rotunda advised investors to remain vigilant and “put emotion aside and objectively evaluate each offer, especially when presented by an unknown person over the Internet.”

The fraudulent scheme highlights the ongoing need for caution and due diligence in the cryptocurrency industry. The use of buzzwords such as “artificial intelligence” may be attractive to investors, but as seen in this case, it can also be used by bad actors to promote fraudulent activities, including pump-and-dump schemes, which is very common within the cryptocurrency industry.

According to data collected by Chainalysis, “from 40,521 tokens launched in 2022 that gained enough relevance to be worthy of analysis, 9,902, or 24%, saw a price drop in the first week indicative of possible pump and dump activity.”

According to the cease and desist order, investors are being given the impression that Elon Musk backs “TruthGPT Coin.”

By Marina Meza

AVAX-denominated Avalanche revenue rose steadily by more than 10% quarter-on-quarter. In the second quarter, there was massive growth in terms of the number of interested parties.

Messari released Avalanche’s [AVAX] quarterly report on May 2, highlighting Blockchain´s performance during the first quarter of 2023. A key takeaway was that AVAX’s market capitalization rallied along with the broader market, rising 65.8% quarter over quarter (QoQ).

In terms of active users, the first quarter was not the best for the Avalanche network, as it posted a decline. Avalanche’s daily average active addresses across the C-Chain and subnets decreased by 20.7% QoQ.

However, it should be noted that the decline became evident as there was an unusual increase in active addresses in Q4, driven by an increase in NFT mintage. If the spike was missed, then the number of active addresses remained stable.

One positive development in the first quarter was that Avalanche’s revenue increased. To be precise, AVAX-denominated network revenue rose steadily by more than 10% qoq.

The increase in revenue was largely due to an 18.2% increase in transaction fees, which stemmed from the network experiencing unsettled times during the final weeks of the last quarter.

Avalanche’s State in DeFi

Blockchain’s performance in the DeFi space wasn’t the best in Q1 either, as the value of its network declined. Avalanche’s AVAX-denominated TVL decreased by more than 34%.

However, it was interesting to note that the TVL, when denominated in USD, rose 4%. According to the Messari report, this incident suggested an increase in the price of USD assets rather than a new capital inflow.

NFT Ecosystem Suffered Losses

Quite a few interesting developments happened in the first quarter that seemed bullish for the Avalanche NFT space. While the updates were positive, things were not reflected on the ground, as Avalanche’s NFT space declined in secondary sales volume by 31.6% QoQ, and the number of unique NFT buyers decreased by 9.8% in the first quarter.

Q2 Brings Good News

There was a lot of momentum in terms of participation in the second quarter. Gambling rewards data revealed that the number of AVAX participants increased by more than 103,768% in the last 30 days, and there were more than 82,000 takers.

As in Q1, Avalanche’s active addresses were flat so far in the second quarter, except for a dip on April 27, 2023. According to Artemin, AVAX’s daily transactions also increased last month, indicating higher use.

Since the beginning of the second quarter, AVAX’s development activity increased sharply. This was optimistic, as it reflected the developers’ efforts to improve the network. Its social volume was also relatively high, indicating its popularity in the crypto space.

Demand for AVAX in the derivatives market was also stable, as evidenced by a predominantly green Binance funding rate, not to mention that the bear market affected AVAX’s performance on the price front, which plunged during the second quarter.

However, things were starting to turn, as the price of AVAX increased marginally in the last 24 hours. According to CoinMarketCap, the token was trading at $16.72, with a market capitalization of over $5 billion.

Messari’s report ends by claiming that “despite the challenges, whether macro forces or technical, Avalanche looks to remain competitive, continue its growth strategies, build community, and pursue its robust plans for 2023.”

By Audy Castaneda