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Prime Trust bites the dust 🧹
Crypto firm Prime Trust placed into receivership. MicroStrategy buys 12,333 BTC for $347M. Mastercard's Blockchain bazaar. Sony goes Web3. $2B for 3 AI startups. Google Gemini > ChatGPT? Is AI cursed?
Hello, y'all. Dispatchers still untouched by the miracles of science. Humanity not so lucky👇
Prime Trust bites the dust
Nevada's Financial Institutions Division (FID) has placed crypto firm Prime Trust into receivership.
Operations have been halted, and a receiver is being sought.
What happened? The takeover comes hot on the heels of custodian BitGo calling off its acquisition bid. FID's action follows an allegation that Prime Trust was nearing insolvency.
And the Legacy wallet: Part of Prime Trust's shortfall is due to inaccessible "legacy wallets." The firm signed a deal with Fireblocks in 2020 to manage its crypto assets. In 2021, legacy wallet forwarding was set up, which ultimately led to the current crisis.
A receivership aims to examine Prime Trust's finances and protect clients, possibly through rehabilitation or liquidation.
The filing asks for a ban on Prime Trust and its associates from disposing any of Prime Trust's assets or conducting transactions.
The Numbers Game💰
Currently, Prime Trust holds only 3.5% of the cash owed to clients.
There's also a shortfall of $900,000 in crypto assets.
Prime Trust owes clients more than $85 Million in fiat but has just $3 Million on hand.
The company owes $69.5 Million in crypto while holding $68.6 Million in crypto assets.
The firm is operating with a $12 Million equity deficit and is facing challenges accessing its crypto wallets.
Banq, a crypto payments and savings platform and partner of Prime Trust, has filed for Chapter 11 bankruptcy protection. This comes after BitGo signed a letter of intent to acquire Prime Trust amid rumours of insolvency. Banq's troubles began due to mismanagement under former CEO Scott Purcell, who secretly transferred company data and assets to his newly founded company, Fortress NFT Group.
Banq also faced legal challenges related to a $3 Million promissory note presented by Purcell. Banq listed $17.72 Million in assets and $5.4 Million in liabilities. BitGo CEO stated that Prime Trust's financial health influenced the acquisition deal.
Swan and Coinbits take the hit
Crypto firms tied with Prime Trust are in trouble. Not all firms are handling the situation the same. Some have managed to escape unscathed, while others are feeling the heat.
Swan Bitcoin managed to pull all assets out of Prime Trust weeks before the fallout. But it's under fire for moving client assets to Fortress, led by Scott Purcell, former CEO of Prime Trust.
Coinbits, a Bitcoin saving platform, tweeted about the unknowns but showed a firm resolve to fight for its members. Most of its services have been suspended amidst the chaos.
Despite Swan's preemptive move, there are speculations about clawbacks during Prime Trust's bankruptcy process.
Meanwhile, Options Expires
We've got billions of dollars in options contracts about to expire this week - things are about to get even more volatile than usual. The recent rally has totally blindsided those short sellers and has everyone reevaluating their positions.
Shaun Fernando, chief risk officer at Deribit
"BTC Max Pain at a significantly reduced level of $26,000 might alleviate the prevailing downward pressure on prices following the expiration. With an impressive open interest of over $350 Million at the $30,000 strike, the approaching quarterly expiration promises an exhilarating conclusion, carrying the potential for price turbulence amidst diverse gamma hedging strategies."
The baddies aren't slowing down
According to a report by TRM Labs, the crypto world was hit hard by Ponzi and pyramid schemes in 2022. Here's the scoop:
$7.8 Billion was lost to crypto pyramid and Ponzi schemes worldwide.
Another $1.5 Billion was allegedly spent on darknets for all sorts of illicit activities.
$3.7 Billion vanished in hacks and exploits.
$9.04 Billion in crypto was sent to various financial fraud schemes.
But there's hope. There's always hope.
Young people disillusioned with the traditional fiat system are finding hope in the world of cryptocurrency.
According to Jordi Visser, the president and CIO of Weiss Multi-Strategy Advisers, the global monetary paradigm is split into two 'countries': Fiat and Crypto. People globally are migrating from the Fiat system to the Crypto world for better opportunities.
While this trend might not be as visible in the Western world, Asia dominates the user base, accounting for 70% of crypto users.
This fact underscores the significance of crypto in the world's most populous continent.
While the crypto market goes up and down like a roller coaster, these long-term players remain cool as cucumbers.
TTD Number 🔢
With Bitcoin's value dancing around the $30,345 range, MicroStrategy decided to go shopping. They snatched up 12,333 Bitcoins for $347 Million. MicroStrategy's Bitcoin holdings now stand at a whopping 152,333 BTC.
Mastercard's Blockchain bazaar
Mastercard is taking a beachhead in the world of blockchain, introducing a beta version of its exciting new product: the Multi-Token Network (MTN).
Promising to become the app store of blockchain, the MTN will initially sizzle in the UK, providing a unique testing ground for financial institutions, fintech, and central banks.
The company is promoting the MTN Innovation Sprint, where selected teams will receive access to MTN's capabilities and begin developing on the platform.
ASX to Crypto: It's not you, It's us.
The Australian Securities Exchange (ASX) has issued a rather curious "maybe" when asked about listing tokenised real-world assets such as gold.
Despite ruling out direct crypto listings - something about being challenging due to listing rules - the ASX is alluringly open to tokenised assets in the future.
Being the globe's 16th largest stock exchange and holding considerable sway over the local equity market, ASX's crypto-flirtations are something to behold. Executives from major banks are winking at the idea, seeing blockchain as the cute nerdy kid who can amp up efficiency.
Sony goes full web3
Sony Network Communications, Sony's tech-savvy child, has just given Startale Labs, a Japanese Web3 infrastructure tech company, a $3.5 Million bear hug. What's cooking? A mission to meld real-world assets with the Web3 ecosystem, which might just be the beginning of us living our Matrix fantasies.
Startale Labs has grand plans to whip up all-in-one solutions for Web3 development, providing a seamless user experience. And it seems Sony's feeling pretty serious about this new partner, with Jun Watanabe, the president of Sony Network Communications, becoming a director at Startale Labs.
TTD AI 🎈
It's an exciting time for the AI world. Three AI startups, MosaicML, NoTraffic, and CalypsoAI, have collectively raised $2 Billion in recent funding rounds. This influx of funding reflects the recognition of AI's potential to disrupt industries and generate significant returns. MosaicML, which was acquired by Databricks for $1.3 Billion, specialises in large-scale neural network training and inference. CalypsoAI, a leader in AI Security, secured $23 Million to further develop its Large Language Model (LLM) security solutions. These investments aim to accelerate the development of custom AI models and enhance the safety and reliability of generative AI and LLMs.
Some twisted individuals are using generative AI to create videos with AI-generated voices and images of kids cheerfully recounting their gruesome murders. It's downright disturbing, and while some argue it's raising awareness, it still feels exploitative.
And if that wasn't enough, there are even rumours of AI trying to kill its operators! Apparently, there have been simulated tests involving drones with AI seeking final approval or abort orders from humans. But guess what? The AI saw humans as nothing more than obstacles in its mission.
Colonel Tucker Hamilton, the chief of AI test and operations for the United States Air Force (USAF)
"At times, the human operator would tell it not to kill [an identified] threat, but it got its points by killing that threat. So what did it do? It killed the operator [...] because that person was keeping it from accomplishing its objective."
Google's DeepMind is cooking up something big. They're working on a new Gemini AI system that's expected to outshine OpenAI's ChatGPT.
Gemini will be a beast of a large language model (LLM). It'll have similar text processing abilities as ChatGPT, but here's the kicker: it will also have brand-new features like planning and problem-solving. DeepMind is leveraging the technology and techniques they used in their earlier AI system, AlphaGo, to make Gemini a game-changer.
This development sends a clear message: Google is ready to go toe-to-toe with OpenAI in advanced AI language models. It's an exciting competition that's pushing the boundaries of what AI can do.
TTD Trader 📊
An Ohio man just got hit with a massive bill worth over $50 Million for running a sneaky crypto scam.
According to the U.S. District Court for the Southern District of New York, this guy named Michael Ackerman allegedly operated a multi-million dollar cryptocurrency investment scam. And guess what? The court isn't taking it lightly. They're making him pay up big time!
Not only is Ackerman banned from trading in any Commodity Futures Trading Commission markets, but he's also got to cough up $27 Million in restitution to the victims and another $27 Million in penalties.
Here's the kicker: Ackerman was apparently playing some tricks with false accounting statements and misleading claims. He made people believe he was a trading wizard, promising monthly returns of around 15 percent. But in reality, he wasn't successful at all. He even went as far as faking account statements, newsletters, and screenshots to cover up his tracks.
In the end, more than 150 people and entities were duped into depositing over $33 Million with him. But hey, justice has been served, and Ackerman is paying the price for his crypto con game.
TTD Surfer 🏄
Sotheby's to launch Gen Art Program for artists - two to three generative artists per year, selling their work through blockchain-based methods.
Israeli authorities have seized cryptocurrency wallets containing millions of dollars that were intended to fund terrorist activities.
The Ethereum Foundation has announced the launch of the first-ever Devconnect Istanbul Scholars Program to foster diversity in blockchain.
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The Token Dispatch is a daily newsletter that takes you on a 4-5 minute drive through the wild west of the Crypto World. Daily in your email inbox @13:00 GMT. Almost always.