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Tesla investors sue Elon Musk for diverting resources, talent to xAI

Shareholders accused Tesla boss Elon Musk of “brazen disloyalty” with his xAI startup that created “billions in AI-related value at a company other than Tesla.”

Tesla shareholders sued CEO Elon Musk and the vehicle maker’s board on Thursday, claiming Musk’s xAI startup is a “competing company” taking artificial intelligence talent and resources from the firm.

It comes the same day shareholders voted to restore Musk’s $44.9 billion pay package that a Delaware judge threw out in January.

Cleveland Bakers and Teamsters Pension Fund, Daniel Hazen and Michael Giampietro filed the June 13 stockholder complaint in Delaware’s Chancery Court on behalf of Tesla.

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BitGo’s $100M suit against Galaxy can proceed — Delaware Supreme Court

After being dismissed by the Delaware Court of Chancery in 2023, the state’s supreme court ruled the definition of the merger agreement between BitGo and Galaxy was “ambiguous.”

Delaware’s Supreme Court has reversed a ruling from a lower court that dismissed a $100 million lawsuit brought by BitGo against Galaxy Digital following a failed acquisition.

In a May 22 filing, the Supreme Court of the State of Delaware said language in the BitGo-Galaxy Digital $1.2 billion merger agreement — which the latter terminated in August 2022 — was “ambiguous.” The state supreme court concluded that it would reverse the Delaware Chancery Court’s decision “for the consideration of such extrinsic evidence as may be appropriate to resolve this ambiguity.”

The successful appeal, first submitted on Feb. 7, would seemingly allow BitGo another bite at the apple to file suit against Galaxy Digital. In an August 2022 lawsuit, the firm alleged Galaxy committed an “intentional breach” of the acquisition agreement. Galaxy claimed at the time that it was within its rights to drop the deal after BitGo failed to deliver audited financial statements from 2021.

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Total Liquidity Pledge to HTX DAO Hits $42.5M After 2nd Round – Bolstering Decentralized Ecosystem

BlackRock Files for a Spot Ethereum ETF With the SEC Months After Applying for a Similar Bitcoin Product

BlackRock Files for a Spot Ethereum ETF With the SEC Months After Applying for a Similar Bitcoin Product

The largest investment firm in the world is filing for a spot market Ethereum (ETH) exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC) months after applying for a spot Bitcoin (BTC) ETF. In a new filing, BlackRock – which has over $8 trillion in assets under its management – is seeking the […]

The post BlackRock Files for a Spot Ethereum ETF With the SEC Months After Applying for a Similar Bitcoin Product appeared first on The Daily Hodl.

Total Liquidity Pledge to HTX DAO Hits $42.5M After 2nd Round – Bolstering Decentralized Ecosystem

Delaware authorities refer fake BlackRock XRP trust filing to state’s Justice Department

State authorities may be investigating the fake registration for a BlackRock “iShares XRP Trust” following a referral from Delaware's Division of Corporations.

A fake filing published to the State of Delaware’s Division of Corporations on Nov. 13 will be referred to the Delaware Department of Justice.

In a Nov. 14 statement, a spokesperson for the Delaware Department of State told Cointelegraph that the false filing claiming that asset manager BlackRock registered an “iShares XRP Trust” would be referred to state authorities. The registration, which appeared as a listing on the state’s Division of Corporations on Nov. 13, momentarily caused the price of XRP to surge roughly 12% before losing its gains when the falsehood was revealed.

This is a developing story, and further information will be added as it becomes available.

Total Liquidity Pledge to HTX DAO Hits $42.5M After 2nd Round – Bolstering Decentralized Ecosystem

XRP jumps then dumps on faked BlackRock XRP trust filing

XRP’s price surge was short-lived and has almost returned to its original price.

A BlackRock filing suggesting the asset manager was creating an XRP (XRP) exchange-traded product caused a 12% spike in XRP, which it quickly lost after the filing was confirmed as fake.

The saga lasted an hour late on Nov. 14 as X (Twitter) users picked up on a Delaware filing showing BlackRock filed to register the “iShares XRP Trust” — a precursor to launching an exchange-traded fund (ETF).

XRP gained 12%, spiking to $0.73 within 30 minutes of the news of the filing. However, it lost all its gains in half an hour after it was confirmed a fake by Bloomberg ETF analyst Eric Balchunas, who spoke with BlackRock.

XRP's price spike Source: Cointelegraph Markets Pro

Balchunas speculated someone listed the XRP trust on the Delaware list of corporations website by impersonating BlackRock managing director Daniel Schwieger.

Bitcoin Magazine analyst Dylan LeClair was one of the first to initially break the news. Balchunas and The Block also shared news of the listing on X in now-deleted pos.

Related: Ripple faces slim odds of $770M disgorgement — XRP holders attorney

BlackRock signaled its intention to expand beyond Bitcoin with its ETF aspirations after the firm filed for a spot Ether ETF on Nov. 9.

In light of the faked listing, Seyffart iterated that the spot Ether ETF is real as it was officially confirmed via a 19b-4 submission by Nasdaq to the Securities and Exchange Commission.

Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?

Total Liquidity Pledge to HTX DAO Hits $42.5M After 2nd Round – Bolstering Decentralized Ecosystem

Ethereum price hits 6-month high amid BlackRock spot ETF buzz, but where’s the retail demand?

ETH price finally polevaulted the $2,000 resistance, but will retail demand and network use support the current bullish momentum?

Ether (ETH) experienced a surprising 8% rally on Nov. 9, breaking the $2,000 barrier and achieving its highest price level in six months. This surge, triggered by news of BlackRock registering the iShares Ethereum Trust in Delaware, resulted in $48 million worth of liquidations in ETH short futures. The initial announcement was made by @SummersThings on a social network, later confirmed by Bloomberg ETF analysts.

The news fueled optimistic expectations regarding a potential Ether spot ETF filing by BlackRock, a $9 trillion asset manager. This speculation follows BlackRock's iShares Bitcoin Trust registry in Delaware in June 2023, a week prior to their initial spot Bitcoin ETF application. However, with no official statement from BlackRock, investors may have jumped the gun, though the sheer influence of the asset manager in traditional finance leaves those betting against Ether's success in a precarious position.

Professional traders placed bullish ETH bets using derivatives

To understand how professional traders are positioned after the surprise rally, one should analyze the ETH derivatives metrics. Normally, Ether monthly futures trade at a 5%–10% annualized premium compared to spot markets, indicating that sellers demand additional money to postpone settlement.

Ether 2-month futures premium. Source: Laevitas

The Ether futures premium, jumping to 9.5% on Nov. 9, marked the highest level in over a year and broke above the 5% neutral threshold on Oct. 31. This shift ended a two-month bearish period and low demand for leveraged long positions.

To assess whether the break above $2,000 has led to excessive optimism, traders should examine the Ether options markets. When traders anticipate a drop in Bitcoin’s price, the delta 25% skew tends to rise above 7%, while periods of excitement typically see it dip below negative 7%.

Ether 30-day options 25% delta skew. Source: Laevitas

The Ether options 25% delta skew shifted from neutral to bullish on Oct. 31, and the current -13% skew is the lowest in over 12 months, but far from being overly optimistic. Such a healthy level has been the norm for the past 9 days, meaning Ether investors were anticipating the bullish momentum.

There’s little doubt that Ether bulls got the upper hand regardless of the spot ETF narrative as ETH rallied 24% before the BlackRock news, between Oct. 18 and Nov. 8. This price action reflects a higher demand for Ethereum network, as reflected by the top decentralized applications (DApps) 30-day volumes.

Ethereum network DApps volume rank. Source: DappRadar

Still, when analyzing the broader cryptocurrency market structure, especially the retail indicators, there’s some inconsistency with the surging optimism and demand for leverage using Ether derivatives.

Related: Bitcoin ETF launch could be delayed more than a month after SEC approval

Retail indicators point to dormant demand for ETH and cryptocurrencies

For starters, the Google searches for “Buy Ethereum”, “Buy ETH” and “Buy Bitcoin” have been stagnant for the past week.

Search trend for buying Ether and cryptocurrency-related terms. Source: Google Trends

One might argue that retail traders typically lag the bull runs, usually entering the cycle a couple of days or weeks after major price marks and 6-month high have been hit. However, there has been a declining demand for cryptocurrencies, when using stablecoins premium as a gauge for Chinese crypto retail trader activity.

The stablecoin premium measures the difference between China-based peer-to-peer USD Tether (USDT) trades and the United States dollar. Excessive buying demand tends to pressure the indicator above fair value at 100%, and during bearish markets, Tether’s market offer is flooded, causing a 2% or higher discount.

Tether (USDT) peer-to-peer vs. USD/CNY. Source: OKX

Currently, the Tether premium on OKX stands at 100.9%, indicating a balanced demand from retail investors. Such a level contrasts with the 102% from Oct. 13, for instance, before the crypto total market capitalization jumped 30.6% until Nov. 9. That goes on to show that Chinese investors are yet to present an excessive demand for fiat-to-crypto conversion using stablecoins.

In essence, Ether’s rally above $2,000 seems to have been driven by derivatives markets and the expectation of a spot ETF approval. The lack of retail demand is not necessarily an indicator of impending correction. However, the hype around BlackRock's Ethereum Trust registry, coupled with excessive leverage longs in ETH derivatives, raises concerns, putting the $2,000 support level to the test.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Total Liquidity Pledge to HTX DAO Hits $42.5M After 2nd Round – Bolstering Decentralized Ecosystem

Metropolitan Museum of Art to return $550K in donations from FTX

The agreement came on the back of “good faith, arm’s length negotiations” with FTX’s debtors, the museum said.

The Metropolitan Museum of Art (Met) is set to return $550,000 in donations it received from crypto exchange FTX prior to its collapse in November.

The New York-based museum confirmed its intention to repay the funds to FTX debtors in a filing to the United States Bankruptcy Court in Delaware on June 2 — the same court where FTX commenced its bankruptcy proceedings.

Filing from the Metropolitan Museum of Art. Source: CourtListener

The Met said the agreement came on the back of “good faith, arm’s length negotiations” with FTX’s debtors:

“The Met wishes to return the Donations to the FTX Debtors, and the FTX Debtors and the Met have engaged in good faith, arm’s length negotiations concerning the return of the Donations.”

The $550,000 was paid to the Met in two separate installments — the first $300,000 was paid in March 2022 while the additional $250,000 came two months later in May.

The donations were facilitated by West Realm Shires Services, the firm that operated FTX.US.

FTX’s management has been seeking to claw back its donations from politicians and other organizations since December, about a month after it filed for bankruptcy in Delaware.

FTX handed out $93 million in donations between March 2020 and November 2022, according to court documents.

Related: FTX philanthropic donations have created a complex dilemma for recipients

Of the 180 United States or so politicians to have recieved funds from FTX, only 19 have returned their funds or have signalled their intention to do so, according to data from Unusual Whales.

“Protect our Future PAC” was the largest recipient of FTX, taking in about $27 million, according to data from Market Watch.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Total Liquidity Pledge to HTX DAO Hits $42.5M After 2nd Round – Bolstering Decentralized Ecosystem

Alameda Research to sell interest in Sequoia Capital for $45M to Abu Dhabi

The investment branch of FTX, Alameda Research, reached an agreement to sell its interest in Sequoia Capital for $45 million in cash to the Abu Dhabi sovereign wealth fund.

The latest update in the FTX bankruptcy case comes as a new deal was struck between the defunct cryptocurrency exchange and Abu Dhabi.

A court document from the United States Bankruptcy Court for the District of Delaware on March 8 revealed that Alameda Research, the investment branch of FTX, will sell its remaining interest in venture capital firm Sequoia Capital to the Abu Dhabi sovereign wealth fund.

According to the document, FTX “decided to enter into the Agreement with Purchaser based on its superior offer and ability to execute the Sale Transaction within a short time frame.” This was after interest in purchasing the shares from four different parties.

Al Nawwar Investments RSC Limited, the buyer of Alameda’s share, is owned by the government of Abu Dhabi - the capital city of the United Arab Emirates. The document states that the buyer is already invested in Sequoia.

The deal is worth $45 million in cash and has the potential to be closed by March 31. However, it is subject to approval by the Delaware bankruptcy judge John Dorsey.

This attempt to sell off its remaining interest in Sequoia Capital is a part of FTX’s attempts to liquidate its investments in order to pay off its debt to creditors.

Dorsey has been actively involved in aspects of the legal cases, which are currently up against FTX. After its initial bankruptcy filing, the former exchange was granted permission by Dorsey to sell off some of its assets.

Related: SBF’s lawyers signal need to push back October criminal trial

Those assets included ​​the derivatives platform LedgerX, the stock-clearing platform Embed and the company’s regional branches FTX Japan and FTX Europe.

Back in January of this year, it was reported that FTX recovered over $5 billion in cash and liquid crypto assets.

In a related case, on March 8, court documents revealed that Dorsey approved that Voyager Digital will set aside $445 million after Alameda Research sued the company on the basis of loan repayments. 

Total Liquidity Pledge to HTX DAO Hits $42.5M After 2nd Round – Bolstering Decentralized Ecosystem

Judge slams senators’ letter against FTX lawyers as ‘inappropriate’

Bankruptcy judge John Dorsey called the bipartisan letter “inappropriate,” and says he won’t take it into account in his decision for an independent examiner.

The judge handling FTX’s bankruptcy has reportedly slammed a joint letter from four United States senators calling for an independent examiner in the case.

As reported by Cointelegraph, the senators sent a letter on Jan. 9 highlighting concerns about the ties between FTX and Sullivan & Cromwell LLP, which as the lead law firm in the bankruptcy proceedings would be tasked with scrutinizing alleged past wrongdoing by the exchange.

However, during a Jan. 11 hearing, Judge John Dorsey of the U.S. Bankruptcy Court for the District of Delaware called the letter “inappropriate ex parte communication” thathe would not take into account in his decision.

“I will make my decisions on the matters based only upon admissible evidence and the arguments presented in open court,” he said during the hearing, according to a Law360 report on Jan. 11.

Cast your vote now!

Ex parte refers to an action taken by one party in a legal proceeding without participation from the opposing party.

The letter was sent to Judge Dorsey on Jan. 9 by a bipartisan group of senators — John Hickenlooper, Thom Tillis, Elizabeth Warren and Cynthia Lummis — questioning the appointment of Sullivan & Cromwell and supporting a motion for the appointment of an independent examiner.

The motion was filed by the U.S. Trustee on Dec. 12.

In the letter, the senators noted that the law firm has previously provided FTX with legal advice and that members of the law firm had left to take positions at FTX, prompting one of the senators to suggest there could be a conflict of interest.

A spokesperson from Sullivan & Cromwell told Cointelegraph that the law firm met the definition of “disinterested” under the U.S. Bankruptcy Code and had “never served as primary outside counsel to any FTX entity."

Related: FTX customers names will remain sealed for now, rules judge

The judge’s dismissal of the senators’ letter does not mean that he will reject the motion to appoint an independent examiner or approve Sullivan & Cromwell as counsel to FTX.

The judge will still need to review the objection to the Sullivan & Cromwell appointment from FTX creditor Warren Winter, whose representatives filed an amended objection on Jan. 10 claiming that the appointment could undermine the public’s faith in the bankruptcy process and the law firm itself was a “target for investigation” regarding its own “potential liability.”

Independent examiners are often appointed by bankruptcy courts to investigate details of complex cases brought before them and are able to present information to the courts from an independent point of view.

They have been appointed in other high-profile bankruptcy cases such as Lehman Brothers during the subprime mortgage crisis and the crypto exchange Celsius.

Total Liquidity Pledge to HTX DAO Hits $42.5M After 2nd Round – Bolstering Decentralized Ecosystem

Breaking down FTX’s bankruptcy: How it differs from other Chapter 11 cases

The FTX bankruptcy has left creditors, investors and industry experts questioning what will happen next — Here is what we can expect.

Collapsed crypto exchange FTX and 130 affiliates filed for bankruptcy in Delaware on Nov 11. Chaos followed as a number of FTX creditors, investors and industry experts began to question what would happen next. 

Laura Shin, crypto journalist, author and host of the Unchained Podcast, sent a tweet on Nov. 15 questioning whether the alleged inter-loan agreement between FTX and Alameda — the company’s venture capital arm — will affect creditors’ and customers’ ability to get back funds.

Caitlin Long, founder of Custodia Bank — a Wyoming-based bank specializing in digital assets — tweeted that this would be the most complex bankruptcy in U.S. history.

According to Long, the international corporate structure of FTX will create complexities. This already appears to be the case, as Bahamian liquidators recently mentioned that their actions may impact the Chapter 11 case, according to Reuters. Moreover, on Nov. 14, FTX filed a document revealing that the exchange may have more than one million creditors involved in the bankruptcy case.

How the FTX bankruptcy differs

Given the complexities involved with the FTX bankruptcy, it’s become clear that this case will likely differ from other United States bankruptcy proceedings. Joseph Moldovan, chair of business solutions, restructuring and governance practices at Morrison Cohen — a New York-based law firm — told Cointelegraph that while there have been complex bankruptcy proceedings in the United States, the FTX Chapter 11 case is unique due to the unknowns. 

“What’s most unusual about the FTX bankruptcy is that the debtors are complex entities with significant amounts of debt. Normally, there are months and months of preparation. Corporate bankruptcies are usually very granular, choreographed and developed processes before they are filed,” he said, adding, “This is simply not the case with the FTX bankruptcy. We (creditors and other interested parties) are still waiting for the most basic information related to the 130 various entities that have filed.”

Moldovan added that while bankruptcies like Lehman Brothers and Enron have involved multiple billions of dollars in assets, debt and numerous affiliated entities, the amount of debt, assets and creditors associated with FTX remain unclear.

“What you normally have in a U.S. bankruptcy case that you don’t have here are first day hearings, in which the lead counsel for debtors walks the court and the public through why the case was filed. This gives a sense of what the long-term goal is and how it may be achieved. We have not yet had a first day hearing in the FTX case,” Moldova further remarked. As a result, Moldovan noted that FTX creditors and interested parties are still questioning outcomes:

“We simply don’t have adequate information to obtain answers yet.” 

One of the biggest questions that remains to be answered is whether FTX creditors get their money back and if so, when? Margaret Rosenfeld, a corporate securities lawyer, specializing in digital assets, told Cointelegraph that she believes it will take years before any FTX creditors receive a penny back. “This includes FTX customers and other parties FTX may have owed money to,” she said. 

Moldovan explained that it is not unusual for creditor recovery to take significant time. In the United States, bankruptcy cases claims of creditors have to be filed by a certain date set forth by the bankruptcy court.

“Once this date is set, a claims agent will take these forms, scan them, and separate the claims by cases. Each of these claims will then be compared with the company’s books and records,” Moldovan said.

Yet, due to the large number of creditors involved with FTX — potentially in excess of one million — along with no current visibility into the company’s bookkeeping practices, Moldovan believes that this process will take longer than normal:

“You can’t make creditor distributions until these claims are analyzed. It’s also way too early to speculate on what kind of distribution creditors will get back. Though in mega cases, such as this, full recovery would be unusual.”

In regard to creditors who took their money off FTX before the exchange collapsed, Rosenfeld explained that these funds can be clawed back, or voided, by a bankruptcy court. “U.S. bankruptcy rules state that money can be clawed back by the court, so don’t assume that money is yours. If a creditor was paid out 90 days before the bankruptcy, a trustee can ask for that money to be paid back,” she said.

While it may take years for FTX creditors to get their investments back, Moldovan also pointed out that the case will be expensive, which will likely result in smaller payouts for creditors. He explained that this is because the funds used to pay for a bankruptcy case come from a bankruptcy “estate,” which consists of all debtors’ property.

“The funds used to pay for all of the costs of the bankruptcy case and all of the professionals retained — lawyers, accountants, restructuring advisors, and others — come out of this estate, which therefore reduces the amount available for distribution,” he said.

Given this, on Nov. 14, FTX filed what is called a “matrix” motion. Normally, Chapter 11 debtors are required to file a matrix providing a mailing list of names and addresses of creditors or parties of interest involved in a bankruptcy case. Notices and other pleadings filed in the bankruptcy proceeding are then mailed to all of the individuals listed on the matrix.

Yet, Moldovan explained that in this case, the administrative costs of compliance “has to be modified in order to reduce estate costs.” Therefore, the debtors have asked the court to authorize email service and make some other accommodations. “The bankruptcy court has the flexibility and power to do this,” he added.

What’s next: The restructuring of a distressed company 

Although a number of unknowns remain in regard to the FTX bankruptcy case, it’s important to point out that John Ray, the new CEO of FTX, will be responsible for the restructuring of the company

Moldovan explained, “Jon Ray is the new chief restructuring officer, meaning he will lead the restructuring of the distressed company and has been delegated with all corporate powers and authorities, including the ability to appoint independent directors to assist in the governance of various entities, which he has already done.”

According to aforementioned court document filed on Nov. 14, Ray has identified some of these directors: former Federal district judge Joseph J. Farnan, Jr. will serve as the lead independent director, while FTX debtors have engaged Alvarez & Marsal as proposed financial advisers. The document further states, “The appointment of Mr. Ray and the independent directors ensures that the Debtors can navigate the chapter 11 process independent of any conflicts and involvement in FTX's prepetition activities.”

While details are yet to be revealed around the FTX Chapter 11 case, Moldovan further remarked that one of the benefits of the U.S. bankruptcy court system is the transparency it provides:

“Unless there is a need for secrecy, everything will be said in open court in which anyone can listen. All pleadings and other documents in the case will be filed within a publicly accessible website for any member of the general public to visit.”

How the U.S. Bankruptcy Court intends to handle a case involving digital assets also remains a concern, especially given the lack of regulatory clarity in the United States, along with regulators who may not be familiar with cryptocurrency. However, Moldovan has expressed optimism regarding the court’s ability to deal with the complexities of the crypto ecosystem.

He said, “Everyday in the United States, bankruptcy courts analyze, value, and determine ownership of esoteric assets, crypto being one. At the heart of all this analysis is basic contract law. What do the documents that create the assets, state rights of ownership, and set forth the respective rights and relationships of the parties to the contract actually say? This analysis is fundamental to the bankruptcy process.That the courts have not made certain determinations yet, merely reflects the novelty, meaning the newness, of the particular issues raised in a crypto bankruptcy. However, this will all be sorted out.”

Total Liquidity Pledge to HTX DAO Hits $42.5M After 2nd Round – Bolstering Decentralized Ecosystem