Illustration by Mitchell Preffer for Decrypt
Prices may be in the green for the week, but Crypto Twitter remained focused on the sector’s ongoing liquidity crisis.
This week, Singaporean exchange Zipmex froze withdrawals, and Legion Strategies, a hedge fund affiliated with Anthony Scaramucci’s Skybridge Capital, halted redemptions. Meanwhile, Blockchain.com joined the ranks of Gemini, Coinbase, and OpenSea by announcing mass layoffs, and electric car manufacturer Tesla cashed out 75% of its Bitcoin for $936 million.
MicroStrategy CEO and billionaire Bitcoin bull Michael Saylor quickly pointed out the hard truths of Tesla’s sale.
If you sell 75% of your bitcoin, you will only have 25% of your #bitcoin left.
— Michael Saylor⚡️ (@saylor) July 20, 2022
In the thick of bankruptcies, one firm is stacking that cash: U.S. law firm Kirkland & Ellis, previously hired by bankrupt crypto lenders Voyager and Celsius to help them restructure, was this week hired by Babel Finance. Last Sunday, Babel paused withdrawals, citing “liquidity pressures.”
Kirkland: https://t.co/hAMAerhRM5 pic.twitter.com/dezlogPFcm
— db (@tier10k) July 19, 2022
An affidavit from Kyle Davies, a co-founder of the newly bankrupt Three Arrows Capital, claims that the former crypto hedge fund owes $65 million to his wife and $5 million to co-founder Su Zhu. Davies and Zhu, effectively radio silent for five weeks, told Bloomberg what they were doing with investors’ funds before it all collapsed.
Zhu Su is seeking $5 million from 3AC bankruptcy, and 3AC co-founder Kyle Davies’ wife is seeking $65 million.
— Frank Chaparro (@fintechfrank) July 18, 2022
DeFi news outlet The Defiant compiled some of the most affecting letters written to the judge by those affected by the Celsius bankruptcy. They really hammer home the human cost of the liquidity crisis.
Many of those affected by the Celsius bankruptcy wrote letters to the judge…
Some are absolutely heartbreaking 😢👇
— The Defiant (@DefiantNews) July 23, 2022
On a more optimistic note, blockchain-based file-sharing network LBRY beat the U.S. Securities and Exchange Commission in court. Guess not every non-Bitcoin token on the blockchain is a security after all, huh Gary Gensler?
Judge was skeptical of many SEC claims.
SEC was forced to admit that substantial usage of LBRY was non-speculative.
Ruling in 4-8 weeks on summary judgement, trial seems unlikely
More later and live on @CryptoLawUS at 7pm
Thanks to all who came, many not pictured pic.twitter.com/HjA2yx1eqc
— Jeremy Kauffman 🦔 (@jeremykauffman) July 20, 2022
On Wednesday, the Microsoft-published hit sandbox game Minecraft announced it will block the use of NFTs and blockchain technology on its servers and prohibit the creation of NFTs based on its assets. Axie Infinity co-founder Jiho was bullish on the news.
Minecraft has banned NFTs.
This is a big sign of adoption. Just like banning books makes them more popular, so too will the Web2 backlash against NFTs pave the way for viral growth. https://t.co/2bkb7PznOF
— The Jiho.eth 🦇🔊 (@Jihoz_Axie) July 20, 2022
The Minecraft-based project NFT Worlds tweeted a lengthy protest.
innovation, player experience and creators. We believe an open, free, evolved version of what Minecraft brought to the world will be a better future for creators, developers and ultimately gamers.
— NFT Worlds (@nftworldsNFT) July 22, 2022
Others saw it coming a long time ago, including Decrypt’s own Kate Irwin, who called it five months ago.
I called it back in February that there was a very good chance that Minecraft would shut them down, and their fanboy army got so mad 😂 https://t.co/VngEFTXEE8
— Kate Irwin (@pixiekate13) July 23, 2022
On Monday, there was some speculation as to who owned a wallet that purchased a certain domain on the Ethereum Name Service.
$1,000,000 USDC bid on amazon.eth right now from a fresh wallet
— DANIEL GOT HITS | 260.eth (@danielgothits) July 18, 2022
Popular NFT marketplace OpenSea got into a sassy war of words with a Solana-based rival.
You should try it sometime, maybe you won’t get suedhttps://t.co/MoKKdLplHA
— Magic Eden 🪄 (@MagicEden) July 20, 2022
Twitter user @8892OS, who claims to be a “fine art dealer” and a purveyor of “emergency liquidity assistance,” allegedly ripped someone off for a lot of Ethereum, and that person … sent more?
i ripped this guy off for 100 eth and he just sent me another 1.9? pic.twitter.com/TXtBxqvkhB
— 8892 (@8892OS) July 20, 2022
Russian-born Ethereum creator Vitalik Buterin was thanked for his humanitarian efforts to help Ukraine repel Vladimir Putin’s ongoing invasion.
This is @VitalikButerin, our hero. His donation of $2.5M in ETH to @_AidForUkraine is also worth 31,000 medical kits, 364,000 medical supplies, and 585 radio kits and stations for the Ukrainian military. Today, @bo_opryshko of @everstake_pool got to thank him in person. pic.twitter.com/RBt55GjZuf
— Aid For Ukraine 🇺🇦 (@_AidForUkraine) July 23, 2022
And finally, GameStop’s new NFT platform drew criticism for listing an NFT clearly inspired by Associated Press photographer Richard Drew’s world-famous image of a 9/11 victim, known as “The Falling Man.”
GameStop’s new NFT platform features an NFT mimicking a victim of 9/11
July 23, 2022https://t.co/9gtfA6Zsl0 pic.twitter.com/2mHqkLsSRX
— web3 is going just great (@web3isgreat) July 23, 2022
The NFT appears to have since been delisted.