Daily Digest - 26 January 2023

Headlines

▌Celsius Hints at New Token Launch as Part of Restructuring Plan

As part of the defunct crypto lender's reorganization plans, Celsius is mulling the issuance of a new crypto token that would let the firm raise funds and repay its creditors, per a Bloomberg report. In a court hearing on Tuesday, Celsius’ attorney Ross M. Kwasteniet told U.S. bankruptcy judge Martin Glenn that a properly licensed and publicly-traded company, such as a revived Celsius, would be able to raise more money for creditors as opposed to simply selling its limited assets at today’s prices.

Policy

▌UK Minister Commits to Greater Crypto Industry Engagement as New Regulation Looms

U.K.'s financial services minister Andrew Griffith on Wednesday pledged a greater engagement with the crypto sector, as he plans new post-Brexit laws. Griffith declined to set a date for a policy document on crypto rules using new powers contained in the Financial Services and Markets Bill, previously promised before Christmas 2022. He said it would be “a matter of certainly weeks, not months,” and added that “sometimes that consultative process makes things a little longer than one might wish in a fast-moving domain.” The U.K. crypto industry, which has been waiting for regulatory clarity, is keen to know the rules under which it will operate under. Griffith acknowledged the importance of speed in a fast-moving sector, as he sought to address concerns about slow registration processes by officials at the Financial Conduct Authority.

Cryptocurrency

▌Stablecoin Issuer Circle Blames SEC for Derailing $9B Plans to Go Public

Circle’s plans to go public last year via a $9 billion SPAC merger failed due to inaction by the United States Securities and Exchange Commission, the crypto firm alleges. The deal between Circle and Concord Acquisition, a special-purpose acquisition corporation set up by former Barclays CEO Bob Diamond, was abandoned last month amid turbulent markets after the collapse of the crypto exchange FTX. According to reporting from The Financial Times, Circle now claims the primary reason for the failed merger was the SEC rather than the market downturn or shaky investors. The regulator allegedly did not approve the deal’s S-4 registration—which allows companies to issue new shares—before the expiration of the agreement. But 15 months after Circle first filed with the SEC, the deal expired before the regulator was satisfied enough to give approval.

▌Luno Slashes 35% of its Workforce as DCG Battles Challenges

The layoffs by crypto exchanges continues, with employees of Luno being the latest victim. The company has announced it will let go of approximately 336 employees. Unfortunately, back-to-back layoffs in the tech sector have become the new norm in 2023. Along with the employees of big tech companies like Google and Amazon, many crypto exchanges are also impacted by the layoffs. The Digital Currency Group-owned Luno Exchange is laying off 35% of its employees due to turbulence in the tech industry.

▌Genesis Aiming To Come Back From Bankruptcy in Coming Months

Troubled crypto lender Genesis is reportedly confident that it could emerge from its bankruptcy proceedings in just a few months. According to a new report by Reuters, Sean O’Neal, an attorney for Genesis, says that the embattled crypto firm could resolve matters with its creditors as soon as this week and potentially restart its operations by late May. Reuters says that Genesis, a subsidiary of billionaire Barry Silbert’s Digital Currency Group, intends to auction off various assets with the goal of exiting bankruptcy by May 19th. According to the report, Genesis has been in negotiation with its creditors for two months now and is open to mediation if it becomes necessary. Brian Rosen, a lawyer representing Genesis’ creditors, says that the firm and its moneylenders are “getting closer” to reaching an agreement.