WATCH THEM BLOW UP

El Salvador Passes Key Bitcoin Legislation, Making Way for 'Volcano Bonds'


Andrew Asmakov
Thu, January 12, 2023

El Salvador approved a digital assets law aimed at creating legal protection for transfers or issuances of debt with cryptocurrencies.

The bill also provides the legal framework for Bitcoin-backed bonds, also known as the “Volcano Bonds,” that the Latin American nation wants to use to pay sovereign debt and fund the construction of the proposed Bitcoin City.

The bill was passed with 62 votes for and 16 against and is set to become law after it is ratified by president Nayib Bukele.

Bukele took to Twitter shortly afterward to praise the move, saying “El Salvador’s Legislative Assembly has just approved, by an overwhelming majority, the new Digital Securities Law! Forward, always forward…”

First announced at the end of November last year, the new bill will enable El Salvador to “offer unprecedented consumer protection from bad actors in the 'crypto' space while also firmly establishing that we are open for business to all those who wish to build the future with us on bitcoin,” according to the statement by the National Bitcoin Office (ONBTC) of El Salvador under president Bukele.

The bill separates cryptocurrencies from all other assets and financial products, including central bank digital currencies (CBDCs)—the digital versions of fiat currencies regulated according to each country's financial guidelines.

Importantly, it also separates Bitcoin from the rest of the crypto market, identifying them as digital securities.

The new legislation also creates the National Digital Assets Commission, a regulating agency in charge of applying the securities law and protecting the rights of digital asset purchasers as well as issuers in El Salvador, and deterring fraudsters from operating in the country.

El Salvador became the first country in the world to make Bitcoin legal tender in 2021, with the move praised by many in the Bitcoin community but criticized by the World Bank, the IMF, and global credit rating agencies. Citizens have also protested against the Bitcoin law on several occasions.

The country is also known for its purchases of Bitcoin, with president Bukele announcing last November that his government would buy one Bitcoin per day, without specifying for how long though.

Crypto Paradise? El Salvador Preps New Law To Pave Way for All Crypto

El Salvador’s Bitcoin 'volcano' bonds

El Salvador’s Bitcoin bonds project was tabled by president Bukele in November 2021 and would see the Latin American nation issue $1 billion in bonds on Blockstream's Liquid Network, a federated Bitcoin sidechain.

The idea is to invest half of the money into Bitcoin and to use the other half for the infrastructure necessary to build out a Bitcoin City—a tax-free enclave for Bitcoin advocates in the east of the country powered by geothermal energy from nearby volcanoes.

Volcano-Powered ‘Bitcoin City’ Coming to El Salvador, Says President Bukele

Under the government’s initial proposal, these Volcano bonds would be denominated in U.S. dollars and pay 6.5% annually for 10 years with a five-year lock-up period, while also fast tracking investors to land citizenship in the country.

The project was initially expected to be launched in March last year but was repeatedly postponed amid the crashing markets.

Now, with the new bill passed, El Salvador comes within a touching distance from finally kickstarting the project, with ONBTC saying the issuance of the Volcano bonds “will soon begin.”

CRIMINAL CRYPTO CAPITALI$M TOO

Genesis, Winklevoss twins’ Gemini crypto venture, charged by SEC with selling unregistered securities

Story by Claudia Assis • 

Genesis, Winklevoss twins’ Gemini crypto venture, charged by SEC with selling unregistered securities© AFP via Getty Images

U.S. securities regulators on Thursday charged Genesis Global Capital and crypto exchange Gemini Trust Co. with offering and selling of unregistered securities to retail investors, bypassing disclosures and other requirements aimed at protecting market participants.

Related video: Genesis Reportedly Owes Creditors Over $3B; Blockchain.com Lays Off 28% of Workforce (CoinDesk)   View on Watch

BloombergSEC Sues Crypto Brokerages Gemini and Genesis
4:52

CoinDesk SEC Charges Gemini, Genesis For Allegedly Selling Unregistered Securities
9:53

CoinDesk Gemini's Cameron Winklevoss Says Barry Silbert Is 'Unfit to Run DCG'
3:48

Genesis and Gemini raised billions of dollars’ worth of crypto assets from hundreds of thousands of investors through unregistered offers, using a crypto asset-lending program called Gemini Earn, the Securities and Exchange Commission said.

The complaint seeks the return of any “ill-gotten gains” plus interest, and any civil penalties, the SEC said.

The SEC is also investigating whether other securities-law violations were committed and whether there are other companies or people relating to the alleged misconduct.

Twins Tyler and Cameron Winklevoss are the founders of Gemini. The crypto exchange was sued late last year by investors alleging that the company sold interest-bearing accounts without registering them as securities, also through the Gemini Earn program.

Also see: ‘Super lame,’ says Gemini co-founder Tyler Winklevoss about SEC charges

The Winklevoss twins were early champions of cryptocurrencies, using the money and fame they won in legal wrangling with Facebook parent Meta Platforms Inc. and Meta’s founder Mark Zuckerberg over their role in creating the social-media giant to launch Gemini.

According to the SEC complaint, the Gemini Earn agreement between Genesis, part of a subsidiary of Digital Currency Group, and Gemini started in December 2020.

Gemini customers, including U.S. retail investors, were to have an opportunity to loan their crypto assets to Genesis in exchange for Genesis’ promise to pay a high interest rate.

Gemini deducted agent fees that were as high as 4.29%, the SEC alleges.

“Genesis then exercised its discretion in how to use investors’ crypto assets to generate revenue and pay interest to Gemini Earn investors,” the SEC said.

By November, however, Genesis announced it would not allow the Gemini Earn investors to withdraw their crypto assets because of a liquidity crunch following volatility in the crypto market after FTX’s bankruptcy filing, the SEC said.

Also read: Gemini’s Cameron Winklevoss accuses crypto exec Barry Silbert of ‘bad faith’ stalling over frozen funds

At the time, Genesis held about $900 million in investor assets from 340,000 Gemini Earn investors, the SEC said. Gemini ended the Gemini Earn program earlier this month.

“As of today, the Gemini Earn retail investors have still not been able to withdraw their crypto assets,” the SEC said in a statement.

“We allege that Genesis and Gemini offered unregistered securities to the public, bypassing disclosure requirements designed to protect investors,” SEC Chair Gary Gensler said in a statement.

The charges “build on previous actions to make clear to the marketplace and the investing public that crypto-lending platforms and other intermediaries need to comply with our time-tested securities laws,” Gensler said.

The SEC’s complaint was filed in the U.S. District Court for the Southern District of New York

SEC charges Genesis, Gemini with selling unregistered securities

Jennifer Schonberger
·Senior Reporter
Thu, January 12, 2023 at 3:00 PM MST·3 min read

The Securities and Exchange Commission on Thursday charged Genesis Global Capital and Gemini, the cryptocurrency exchange founded by Tyler and Cameron Winklevoss, for selling unregistered securities to investors through Gemini's Earn crypto asset lending program.

The SEC alleges the Gemini Earn program constituted an offer and sale of securities under SEC law, raising billions of dollars of crypto assets from hundreds of thousands of investors, and should have registered with the SEC.

"We allege that Genesis and Gemini offered unregistered securities to the public, bypassing disclosure requirements designed to protect investors," SEC Chair Gary Gensler said in a statement.

"Today’s charges build on previous actions to make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws. Doing so best protects investors. It promotes trust in markets. It’s not optional. It’s the law."

According to the complaint, in December 2020, Genesis entered into an agreement with Gemini to offer Gemini customers the ability to loan their crypto assets to Genesis in exchange for interest payments.

Beginning in February 2021, Genesis and Gemini began offering the program to investors.

Gemini facilitated the transaction and deducted for itself an agent fee, sometimes as high as 4.29%, from the returns it received from Genesis, according to the SEC.

The SEC alleges Genesis then exercised its discretion in how to use investors' crypto assets to generate revenue and pay interest to investors.

Last November, Genesis, which is a wholly-owned subsidiary of Barry Silbert's Digital Currency Group (DCG), announced it would pause withdrawals on its lending platform as it lacked sufficient liquidity to meet requests amid volatility in the crypto market in the wake of FTX's collapse. At the time Genesis held approximately $900 million Gemini customer deposits, which remain frozen on the platform.

The SEC's announcement comes as Genesis and Gemini have been engaged in a war of words, with Cameron Winklevoss earlier this week calling for DCG CEO Barry Silbert to step down and accusing Silbert and others at DCG of making "false statements and misrepresentations to Gemini."

Cameron Winklevoss, co-founder of crypto exchange Gemini Trust Co., attends the crypto-currency conference Bitcoin 2021 Convention at the Mana Convention Center in Miami, Florida, on June 4, 2021. (Photo by Marco BELLO / AFP) 

Investigations continue

“The recent collapse of crypto asset lending programs and the suspension of Genesis’ program underscore the critical need for platforms offering securities to retail investors to comply with the federal securities laws,” said Gurbir Grewal, Director of the SEC’s Division of Enforcement. “As we’ve seen time and again, the failure to do so denies investors the basic information they need to make informed investment decisions.

Investigations into other securities law violations and other entities and persons relating to alleged misconduct are ongoing, according to the SEC.

Grewal encouraged anyone with information about this case or others to come forward and, if necessary, do so under the SEC’s Whistleblower Program.

The SEC is filing a litigated action and part of the requested relief from the Federal District Court will be a monetary civil penalty, plus disgorgement of any ill gotten gains.

The SEC’s action comes after investors brought a class action lawsuit against Gemini, alleging they were duped into investing in the exchange's interest-bearing accounts without being informed that they were unregistered securities.

Gensler has warned for months the agency would take enforcement action if firms didn't comply with SEC rules.

Gensler told Yahoo Finance in an interview in December he has one goal when it comes to regulating crypto markets in 2023: Make crypto exchanges and lending platforms come into compliance with existing rules.

"They can do that appropriately, working with the SEC, or we can continue on a course with more enforcement actions, and I would have to say that the runway's getting shorter," Gensler said.

U.S. securities regulator charges Genesis, Gemini with unregistered offerings


People exit the headquarters of the U.S. Securities and Exchange Commission (SEC) in Washington, D.C.

Thu, January 12, 2023 
By Hannah Lang and Chris Prentice

WASHINGTON/NEW YORK (Reuters) -The U.S. Securities and Exchange Commission (SEC) on Thursday said it has charged Genesis Global Capital LLC and Gemini Trust Company LLC with illegally selling securities to hundreds of thousands of investors through their crypto lending program.

Genesis, a part of Digital Currency Group, entered into a deal with Gemini in December 2020 to offer Gemini customers the chance to loan their crypto assets to Genesis in exchange for earning interest, the SEC said. Beginning in February 2021, they raised billions of dollars' worth of crypto assets from investors, the SEC said.

The firms violated securities laws through the offer and sale of crypto assets through their Gemini Earn product, the SEC said.

In a Twitter post, Gemini co-founder and Chief Executive Officer Tyler Winklevoss called the complaint disappointing and said the company looks forward to defending itself.

"This action does nothing to further our efforts and help Earn users get their assets back. Their behavior is totally counterproductive," he said.

Genesis did not immediately respond to a request for comment.

In November 2022, Genesis told investors they could not withdraw their crypto assets as volatility in the crypto markets prompted a liquidity crunch. At the time, Genesis had about $900 million in assets from 340,000 Gemini Earn investors. The investors have been unable to withdraw their assets, the regulator said.

Investigations into other, related violations are ongoing, the agency said.

In February 2022, a subsidiary of rival crypto firm BlockFi Inc. agreed to pay $100 million to the SEC and 32 states to settle charges related to their offering of a similar interest-bearing product.

Gemini and other Genesis creditors have been agitating for a solution to avoid a situation similar to FTX's rapid descent into bankruptcy. Genesis owes creditors more than $3 billion, according to a person familiar with the matter.

Gemini co-founder Cameron Winklevoss publicly called for the ouster of DCG Chief Executive Barry Silbert on Tuesday, accusing Silbert of defrauding creditors and engaging in "bad faith stall tactics." DCG has called Winklevoss' allegations false and defamatory.

(Reporting by Chris Prentice and Hannah Lang; Editing by Daniel Wallis)

CRIMINAL CRYPTO CAPITALI$M

Sam Bankman-Fried Blogs Like a Crypto Robin Hood, but in Court He's Not So Charitable



Jack Schickler
Thu, January 12, 2023 

Sam Bankman-Fried’s surprise Substack post Thursday included these charitable lines: “Nearly all of my assets were and still are utilizable to backstop FTX customers,” he wrote. “I have, for instance, offered to contribute nearly all of my personal shares in Robinhood to customers.”

It sounds like the British folk hero and outlaw of the same name, Robin Hood, who stole from the rich to give to the poor. As Bankman-Fried tells it on Substack, FTX users can have the stake in trading app Robinhood – worth about $450 million, though now seized by the U.S. Department of Justice – that he bought. A nice gesture, surely, as their money remains locked up.

But the swashbuckling hero’s tale is darker in court. In a Jan. 5 document filed with the Delaware bankruptcy court, Bankman-Fried resisted an attempt to transfer the 56 million Robinhood Markets (HOOD) shares to the estate of FTX – arguing both that he needed the funds to pay for his criminal defense and that FTX couldn’t prove he'd acquired the stock fraudulently.



The shares were acquired via a series of loans he and colleague Gary Wang had received from FTX’s trading arm, Alameda Research, Bankman-Fried’s filing said.

That’s legitimate, Bankman-Fried argued; the Substack post said he “didn’t steal funds.” Alameda’s ex-CEO Caroline Ellison has, however, pleaded guilty to charges including commodities fraud, which includes the allegation that she misappropriated FTX customer funds to satisfy Alameda’s souring loans.

Contacted by CoinDesk, a spokesperson for Bankman-Fried declined to comment on when and how he offered to cede the Robinhood securities (as he claimed to do in the Substack post).

SBF thought it was a good idea to start a Substack

The disgraced founder of crypto exchange FTX claims that he didn’t steal funds.

Sam Bankman-Fried
Andrew Kelly / reuters

Kris Holt
·Contributing Reporter
Thu, January 12, 2023

Sam Bankman-Fried is in a world of trouble. He’s facing up to 115 years in prison if he’s convicted of federal fraud and conspiracy charges. And yet the embattled founder of collapsed crypto exchange FTX — who has pleaded not guilty and is out on a $250 million bond while awaiting trial — figured it’d be a great idea to write about his perspective on the saga in a Substack newsletter.

In his first post, which is ostensibly about the collapse of FTX International, Bankman-Fried (aka SBF) claims that “I didn’t steal funds, and I certainly didn’t stash billions away.” SBF notes that FTX US (which serves customers in America) “remains fully solvent and should be able to return all customers’ funds.” He added that FTX International still has billions of dollars in assets and that he is “dedicating nearly all of my personal assets to customers.” SBF, who once had a net worth of approximately $26.5 billion, said at the end of November that he had $100,000 in his bank account, though he pledged to give almost all of his personal shares in Robinhood to customers.

The post covers much of the same ground that SBF has gone over in the myriad interviews he gave between FTX's collapse in November and his arrest last month. He discusses the multiple crypto market crashes in 2022 and a tweet from Binance CEO Changpeng Zhao that sparked a run on FTX’s FTT token and prompted the implosion of his exchange. SBF also writes about how he was pressured to file for Chapter 11 bankruptcy protection for FTX. Meanwhile, he notes that many of the numbers he cites in the post are approximations, since he has been locked out of FTX's systems by those overseeing its bankruptcy proceedings.

What's more interesting is what SBF doesn't address. He does not mention the fact that FTX co-founder Zixiao "Gary" Wang and former Alameda Research CEO Caroline Ellison pleaded guilty to fraud charges and are cooperating with prosecutors.

SBF has continued to give interviews and tweet about the situation while he's out on bail. That's despite the complaint filed against him by the Securities and Exchange Commission citing his tweets and comments he made in an interview in early December. Perhaps this whole Substack thing will turn out to be a mistake too.

Sam Bankman-Fried repeats his claim that he 'didn't steal funds' as he resurfaces on Substack

Sam Tabahriti
Thu, January 12, 2023

Sam Bankman-Fried leaves a court hearing in Manhattan on January 3.Andrew Kelly/Reuters

Sam Bankman-Fried resurfaced Thursday on Substack, days after appearing in a Manhattan court.

He again insisted that he did not "steal funds" from FTX and hadn't "stashed billions away."

The FTX co-founder has pleaded not guilty to eight charges, and a trial is due to start October 2.

Sam Bankman-Fried repeated his assertion that he didn't "steal funds" in what appeared to be an outline of his legal defense as he resurfaced on Substack on Thursday.

The co-founder of collapsed cryptocurrency exchange FTX wrote in Substack post that "I didn't steal funds, and I certainly didn't stash billions away."

Bankman-Fried pleaded not guilty on January 3 to eight charges, including fraud for allegedly using FTX funds to support his hedge fund Alameda Research, buy property, and make political donations worth millions of dollars.

In his Substack post, Bankman-Fried said that the collapse of Alameda was due to "large crypto market crashes," and said he hadn't run the hedge fund for the past few years.

He also said FTX could have reimbursed customers and raised fresh investor cash if it hadn't been forced into bankruptcy: "It's ridiculous that FTX US users haven't been made whole and gotten their funds back yet."

"Alameda's contagion spread to FTX," Bankman-Fried continued. "FTX US remains fully solvent and should be able to return all customers' funds. FTX International has many billions of dollars of assets, and I am dedicating nearly all of my personal assets to customers."

Near the end of his post, Bankman-Fried added: "All of which is to say: no funds were stolen. Alameda lost money due to a market crash it was not adequately hedged for – as Three Arrows and others have this year. And FTX was impacted, as Voyager and others were earlier."

The former FTX CEO was released on a $250 million bond and remains under house arrest at his parents' home in Palo Alto, California.

FTX filed for Chapter 11 bankruptcy protection on November 11 after it imploded, wiping out customer deposits worth billions. Bankman-Fried resigned as CEO the same day.

Bankman-Fried didn't immediately respond to a request for comment from Insider.

'I didn't steal funds,' Sam Bankman-Fried says in unusual post-arrest blog post

Thu, January 12, 2023
By Luc Cohen

NEW YORK (Reuters) -Sam Bankman-Fried said he did not steal money and blamed the collapse of his now-bankrupt FTX exchange on a broad crash in cryptocurrency markets, in a highly unusual blog post on Thursday, a month after his arrest on U.S. fraud charges.

Federal prosecutors in Manhattan in December said Bankman-Fried stole billions of dollars from FTX customers to pay debts for his crypto-focused hedge fund, Alameda Research, purchase lavish real estate, and donate to U.S. political campaigns.

He has pleaded not guilty. The Substack blog post -- a rare public statement by a U.S. criminal defendant -- amounts to a preview of the defense case Bankman-Fried may present when his trial begins on Oct. 2.

"I didn't steal funds, and I certainly didn't stash billions away," Bankman-Fried wrote.

Defense lawyers typically advise clients to stay silent before trial because prosecutors may use their comments against them in court.

A spokesman for Bankman-Fried declined to comment. A spokesman for the U.S. Attorney's office in Manhattan declined to comment.

In the post, Bankman-Fried did not directly address many of the other charges brought against him by federal prosecutors in Manhattan last month, namely that he misled investors and lenders about the financial conditions of FTX and Alameda. He wrote that he had "a lot more to say."

The 30-year-old onetime billionaire wrote that Alameda failed to hedge against an "extreme" crash in the crypto markets, which ultimately came to pass last year.

"As Alameda became illiquid, FTX International did as well, because Alameda had a margin position open on FTX," Bankman-Fried wrote.

Last month, two of his closest associates pleaded guilty to defrauding the trading platform's customers and agreed to cooperate with prosecutors' investigation.

Caroline Ellison, Alameda's former chief executive, said in her plea hearing that Bankman-Fried and other FTX executives received billions of dollars in secret loans from Alameda.

Bankman-Fried was released on a $250 million bond in December and put under house arrest at his parents' Palo Alto, California home, which was pledged as collateral for his return to court.

$5 BILLION RECOVERED

In the post, Bankman-Fried also said FTX's U.S. wing is "fully solvent" and that its international unit has many billions of dollars in assets.

"If it were to reboot I believe there is a real chance that customers could be made substantially whole," he wrote.

The comments came after a lawyer for FTX on Wednesday told a federal bankruptcy court in Delaware that the exchange had located more than $5 billion in liquid assets, and that the company plans to sell nonstrategic investments that had a book value of $4.6 billion.

That does not include assets seized by the Securities Commission of the Bahamas, where FTX was based and where Bankman-Fried lived before he was extradited to the United States. Bahamian authorities say they have seized $3.5 billion, but FTX says those funds are worth as little as $170 million.

On Wednesday night, Bankman-Fried replied on Twitter to a user named @wassielawyer who said a sale of the FTX exchange was viable. "yup my sense is that is and always has been the best recovery scenario for customers," wrote Bankman-Fried.

FTX declared bankruptcy on Nov. 11, the same day Bankman-Fried stepped down as its chief executive.

(Reporting by Luc Cohen in New York; editing by Amy Stevens, Himani Sarkar and Anna Driver)

Sam Bankman-Fried says both FTX and Alameda were raking in billions in profits in 2021 before token values plunged in crypto winter

Phil Rosen
Thu, January 12, 2023 a

Sam Bankman-Fried, founder of FTX and Alameda ResearchFTX

Sam Bankman-Fried published an extensive Substack article Thursday titled, "FTX Pre-Mortem Overview."

He said both FTX and Alameda Research were netting billions in profits in 2021, before crypto token valuations crashed in 2022.

He noted that "Alameda lost about 80 percent of its assets' value over the course of 2022, due to a series of market crashes."

Sam Bankman-Fried, the disgraced founder of FTX, published a lengthy Substack article Thursday and claimed that his crypto exchange as well as trading firm Alameda Research were highly profitable enterprises in 2021 before the crypto winter began the following year.

"FTX International and Alameda were both legitimately and independently profitable businesses in 2021, each making billions," he wrote in the post titled "FTX Pre-Mortem Overview."

However, the broader crypto environment took a turn when Three Arrows Capital and other firms collapsed in the spring of 2022, he explained. That helped sink the asset values of nearly every major token, including bitcoin, ether, solana, and others.

Alameda lost "about 80 percent" of its assets' value last year, Bankman-Fried said, which subsequently dragged down FTX in the same way that Three Arrows' decline contaminated the likes of Voyager and others.

However, he cautioned that he is estimating some figures due to lack off access to some records.

"Many of my personal passwords are still being held by the Chapter 11 team–to say nothing about data," he wrote. "If the Chapter 11 team wants to add their data to the conversation, I would welcome that."

Bankman-Fried stepped down as the head of his crypto empire in November, and FTX filed for Chapter 11 bankruptcy, which he has since said was a regrettable decision.

New CEO John Ray III has accused Bankman-Fried and his deputies of incompetence, inexperience, and haphazard bookkeeping.

Still, in his Substack note, Bankman-Fried pointed out that there remains a potential for a very substantial recovery for customers, with FTX US still fully solvent.

Meanwhile, FTX International still has "billions of dollars of assets," he explained, and he's also dedicating nearly all of his own personal cash to customers.

In a bankruptcy hearing on Wednesday, FTX said it has located more than $5 billion in assets as part of its work toward repaying creditors.

The ex-FTX chief pleaded not guilty on January 3 in the Justice Department's criminal case. He is due to stand trial in October.

FTX Liquidators Lost $74K in Wrapped Bitcoin in 'Embarrassing On-Chain Faux Pas'



Stacy Elliott
Thu, January 12, 2023 

The liquidators become the liquidated.

The restructuring team that is trying to locate and recover customer funds as part of the bankruptcy process for FTX and sister company Alameda Research is having a difficult time navigating the DeFi space.

The team recently attempted to move funds into an Alameda Research-owned multi-sig wallet but in the process lost 4 Aave Wrapped BTC (aWBTC), worth approximately $72,000, according to a report from blockchain intelligence firm Arkham Intelligence.

“The liquidators would benefit from having a DeFi expert to advise on the mechanics of closing Alameda DeFi positions and retrieving as much money as possible,” Zachary Lerangis, head of operations at Arkham, told Decrypt.


DeFi protocols, which enable users to trade, borrow, and loan crypto without intermediaries, require a certain level of sophistication to navigate. For instance, the way loans work on Aave, borrowers deposit collateral and borrow against it. Aave requires loans to be overcollateralized, meaning the ratio between collateral and borrowed funds has to stay above a certain threshold or risk being liquidated. Once a loan has been repaid, the borrower can unlock their collateral.

But it appears that the Alameda liquidators didn’t know that.

“Rather than paying back the debt to close out the position, the liquidators opted to remove all the extra collateral, putting the position in danger of liquidation,” the Arkham team wrote in the report. “This resulted in the liquidation of around 4 WBTC, $72K at current prices.”

FTX Restructuring Team Has Clawed Back $5B in Lost Assets

But that wasn't the only "embarrassing on-chain faux pas," said Arkham. Among the team’s other gaffes were nine failed attempts to move $1.75 million worth of Lido (LDO) tokens that were still vesting. At the time of writing, the wallet still has $3 million worth of LDO.

There’s another wallet that Arkham says belongs to Alameda that has sent $0.60 worth of DAI stablecoin and $0.02 COLLAR token to the multi-sig, but still has $1.5 million worth of funds in the wallet that have yet to be moved.

Arkham says the wallets it has identified have at least $25 million worth of Alameda’s funds deployed in DeFi protocols, like $6 million USDC, a stablecoin issued by Circle, being used to secure a $2 million NEAR loan on Bastion Protocol. There’s also funds stuck on other chains. For example, one Alameda wallet shows a $300 balance on Etherscan, but has $4.4 million worth of ETH still sitting on Aurora.

FTX, a once dominant exchange, collapsed in November following a bank run on the exchange that forced the company to admit it did not hold one-to-one reserves of customer assets, freeze withdrawals, and ultimately file for bankruptcy. Sam Bankman-Fried, founder of FTX and trading firm Alameda, has since been arrested and charged with eight financial crimes, including wire fraud and conspiracy to commit money laundering. Authorities allege that FTX customer funds were being funneled to Alameda for its own trading and investments, resulting in the loss of billions of dollars.

FTX restructuring team took a victory lap in court yesterday for having located $5 billion worth of assets. But at the start of the bankruptcy process, newly appointed FTX CEO John Ray III said that the liquidators didn’t know how much money the company had or how to access it.

There have also been suspicious transactions since FTX, including Alameda Research, entered Chapter 11 bankruptcy protection on November 11. At the end of December, blockchain sleuth ZachXBT spotted Alameda wallets swapping obscure tokens for Bitcoin and Ethereum by way of mixers, used to obscure transactions.

“Alameda ETH addresses are digging around in the sofa for spare change” one blockchain researcher wrote on Twitter.

SBF's New Substack Blames CZ for 'Quick, Targeted Crash' That Brought Down FTX




Alys Key
Thu, January 12, 2023 

With no job and under house arrest, Sam Bankman-Fried has taken the next logical step and launched a Substack newsletter.

In the first post of the aptly-called “SBF’s Substack,” the disgraced former FTX CEO blamed Binance CEO Changpeng ‘CZ’ Zhao for the demise of the crypto exchange’s sister firm Alameda Research.

“An extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent,” SBF wrote, adding that contagion from Alameda spread to FTX “and other places.”

The two crypto bosses have exchanged words publicly about CZ’s role in the FTX crisis, which at one point included a rescue deal which was later called off.

On Substack, SBF said CZ had run an “extremely effective months-long PR campaign against FTX” leading up to the fateful few days in November which culminated in the exchange’s bankruptcy.

“I didn’t steal funds, and I certainly didn’t stash billions away,” SBF wrote.

The email newsletter is currently free to read, but Substack’s site allows keen readers to pledge ‘future’ subscriptions which they would pay if the writer chose to turn on paid-for subscription options.

Sam Bankman-Fried Released to Parents' Palo Alto Home on $250 Million Bond

SBF was arrested in December, but subsequently released from federal custody on a historic $250 million bond. He is now confined to his parents’ home in Palo Alto.

His bail conditions forbid the FTX founder from opening any new lines of credit, starting a business, or entering financial transactions larger than $1,000 without the approval of the government or the court. Making money from his Substack may therefore be out of the question for now.
“No funds were stolen”

The first piece of writing sent to his subscribers went over the familiar ground of FTX’s insolvency.

Comparing the liquidity crisis that took down FTX’s sister firm Alameda Research to other notable crypto collapses of last year, he said there had been no wrongdoing.

“[N]o funds were stolen,” the 30-year-old insisted. “Alameda lost money due to a market crash it was not adequately hedged for–as Three Arrows and others have this year. And FTX was impacted, as Voyager and others were earlier.”

While SBF said in the post that he had not been running Alameda for the past few years, he did not mention by name that firm’s former chief executive, Caroline Ellison. In December, along with FTX co-founder Gary Wang, Ellison pleaded guilty to fraud charges in an apparent deal to cooperate in authorities’ investigation into FTX—and SBF.

Caroline Ellison, Gary Wang Plead Guilty, Cooperating in FTX Investigation

It appears that SBF intends to continue blogging, despite the fraud charges he is contesting.

“I have a lot more to say–about why Alameda failed to hedge, what happened with FTX US, what led to the Chapter 11 process, S&C, and more,” he said. “But at least this is a start.”

Sam Bankman-Fried says tweets from Binance's CEO in November were a 'targeted attack' on Alameda's assets

Brian Evans
Thu, January 12, 2023 

Changpeng Zhao and Sam Bankman-Fried.

Sam Bankman-Fried said Alameda's assets were the focus of a "targeted attack" by Binance CEO Changpeng Zhao.

"In November 2022, an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent," Bankman-Fried wrote.

Bankman-Fried previously had only hinted at Zhao's role but on Thursday took direct aim at his one-time rival.

Sam Bankman-Fried accused Binance CEO Changpeng Zhao of orchestrating the liquidity crisis that eventually caused the downfall of FTX.

In early November, Zhao tweeted that Binance would dump its holdings of FTX's native token, citing a report in CoinDesk that said FTT made up much of Alameda Research's assets. That sparked massive withdrawals from FTX, which filed for bankruptcy days later.

Since then, Bankman-Fried previously had only hinted at Zhao's role in the chain of events. But in a Substack post on Thursday, he took direct aim at his one-time rival.

"In November 2022, an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent," Bankman-Fried said.

He added that the contagion from Alameda spread to FTX and elsewhere, comparing it to how the collapse of Three Arrows in the spring of 2022 reached Voyager and other crypto platforms.

To be sure, Bankman-Fried also attributed the FTX crash to other factors, including Alameda's failure to sufficiently hedge its exposure. A series of crashes in the crypto market last year led to a roughly 80% decline in the value of Alameda's assets.

"But the November crash was a targeted attack on assets held by Alameda, not a broad market move," he added. "Over the few days in November, Alameda's assets fell roughly 50%."

For his part, Zhao has downplayed his role in FTX's collapse, saying "I think we were the last straw that broke the camel's back. It's not a straw that is really strong."

Binance agreed on November 8 to take over FTX and rescue Bankman-Fried, but pulled out a day later after noting concerns while performing due diligence.

FTX filed for bankruptcy protection on November 11 and is currently being led by new CEO John Ray III. Bankman-Fried was charge with fraud in December and has pleaded not guilty.

Elsewhere in his Substack post, Bankman-Fried also said FTX International had $8 billion in assets when Ray took over. He also expressed regret for FTX's bankruptcy filing and claimed customers can still recover a significant share of their assets.

CRYPTO-CAPITALI$M JUST LIKE REAL CAPITALI$M

Coinbase Confirms End of an Era
Cryptocurrency exchange to cut nearly 1,000 additional jobs and record significant charges.

LUC OLINGA
JAN 11, 2023 

The horizon is uncertain for Coinbase.

The cryptocurrency exchange is still unable to get out of the bad patch that the cryptocurrency sector has been going through for a year.

The cryptocurrency market has lost nearly $2.1 trillion compared to its all-time high of $3 trillion reached in November 2021. The market is currently worth some $886 billion according to data firm CoinGecko.

Bitcoin (BTC), the most popular digital asset, has lost 75% of its value compared to its all-time high of $69,044.77 reached on November 10, 2021. BTC prices are currently trading around $17,233.76. The prices of the king of cryptocurrencies have relatively stabilized since the year 2023.

The biggest problem in the young blockchain-powered financial services industry is mistrust. The mistrust of the general public caused by a succession of scandals after the crypto craze of 2021.

'Difficult Decision'

Last May, sister tokens Luna and UST collapsed overnight causing billions of dollars in losses to retail investors and institutional investors. This disaster caused a credit crunch which forced the hedge fund Three Arrows Capital, or 3AC, to go into liquidation. Imminent crypto lenders like Voyager Digital and Celsius Network have filed for Chapter 11 bankruptcy.

This game of dominoes revealed the incestuous relationships and the interdependence between the actors of the crypto space. Customers of these platforms, who lost their savings, were often unaware that their money was often loaned to other firms.

In November, Sam Bankman-Fried's crypto empire collapsed. This disaster was a real bombshell as the former trader was the institutional face of crypto. He had rescued many firms during the credit crunch and his FTX cryptocurrency exchange was valued at $32 billion last February.

The FTX rout has yet to reveal all of its casualties. The biggest, however, remains the confidence in the crypto industry which has completely collapsed. Retail investors have fled the sector, while institutional investors are much more cautious, especially since a recession is expected this year.

This is confirmed by Coinbase. The platform has just announced the loss of nearly a thousand additional jobs. Coinbase (COIN) - Get Free Report will eliminate 20% of its current workforce, or approximately 950 jobs.

"We need to make sure we have the appropriate operational efficiency to weather downturns in the crypto market, and capture opportunities that may emerge," CEO Brian Armstrong told employees in a blog post on January 10. "Therefore, I've made the difficult decision to reduce our operating expense by about 25% Q/Q, which includes letting go of about 950 people."
'Painful'

"This is the first time we've seen a crypto cycle coincide with a broader economic downturn," Armstrong continued. "As we examined our 2023 scenarios, it became clear that we would need to reduce expenses to increase our chances of doing well in every scenario. While it is always painful to part ways with our fellow colleagues, there was no way to reduce our expenses significantly enough, without considering changes to headcount."

Coinbase will therefore shut down several projects.

All of these actions will result in a charge of between $149 billion and $163 billion, the company said in a regulatory filing. These charges are mainly severance pay and other termination benefits and will be included in the results of the first quarter of 2023.

The crypto firm also said it expects adjusted EBITDA losses for the full year to be within a prior $500 million “guardrail” set last year.

The new job cuts are the second wave of job eliminations by Coinbase in less than a year. Last June, the company cut 18% of jobs, or 1,000 people who were laid off.

These layoffs mark the end of an era of abundance and insolent growth for the crypto industry that had benefited Coinbase. The platform had its IPO in April 2021. The shares had thus soared to $341.

But they have fallen sharply last year. Currently the stock price is around $38, which means a the drop is 89%.

Coinbase Cuts Costs Yet Again as Crypto Winter Drags On. Should Investors Sell Now?

By Jon Quast 

– Jan 12, 2023

MOTLEY FOOL 

KEY POINTS

Coinbase is aggressively cutting operating expenses by 25% sequentially, unfortunately at the expense of about 950 employees.

It's likely that Coinbase will survive 2023 because of its strong financial condition, but that's not an investment thesis.

Coinbase's focus on developing new revenue streams could lead to market-beating gains if the cryptocurrency space returns to growth in the future.

NASDAQ: COIN
Coinbase Global
Market Cap
$11B
Today's Change
(3.28%) $1.56
Current Price
$49.11
Price as of January 13, 2023

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Is crypto coming to an end or is it simply going through winter on its way to spring?

On Jan. 10, Coinbase Global (COIN 3.28%) co-founder and CEO Brian Armstrong announced that the company was aggressively cutting operating expenses, another sign of the ongoing slowdown in the cryptocurrency space. As a part of this belt-tightening, the company is letting go of 950 employees - about 20% of its workforce.

Coinbase's latest cuts underscore and are a product of the cryptocurrency's ongoing challenges. Unfortunately, there's no real clarity about when or if things will improve in the industry writ large. But what do these cuts mean for Coinbase's long-term prospects? Are these layoffs a sign of the end times or a smart readjustment that will help the company withstand the cold crypto winter?

The rise and fall of Coinbase

In 2021, Coinbase's full-year revenue jumped to $7.84 billion -- up from just $1.27 billion in the previous year. That's over 500% year-over-year growth: A mind-numbing amount, especially at such a scale. Moreover, that growth was eye-poppingly profitable at a 46% net profit margin.

At that time, though, the cryptocurrency space was on a tear. The overall cryptocurrency market cap jumped from $192 billion in 2019 to $2.3 trillion in 2021, sparking extreme interest from investors. And Coinbase was one of the best-positioned players to benefit from the surge.

But fast forward to today. Cryptocurrency's market cap has dropped from roughly $2.9 trillion at the peak to about $855 billion as of this writing, according to CoinMarketCap. Over the past year, investors have lost billions as stablecoins have, ahem, destabilized; centralized exchanges have shut down, and investors using leverage have been liquidated. Suffice it to say, confidence in crypto is rattled.

Coinbase's operating results reflect these headwinds. Net revenue from the first three quarters of 2021 was $4.85 billion; after the same period in 2022, it dipped to $2.5 billion, nearly a 48% drop. Net income looks even worse, swinging viciously from $2.8 billion during the first three quarters of 2021 to a net loss of $2.1 billion in the first three quarters of 2022.

What's more, Coinbase's trading volume has plummeted. In the third quarter of 2022, Coinbase facilitated $159 billion in crypto trades, down from $327 billion in the previous year.Smaller alternative coins have been hit particularly hard. Coinbase facilitated roughly $193 billion in altcoin trading in the third quarter of 2021. In Q3, trading volume for alt-coins was just $57 billion.

Where does Coinbase go from here?

Let's not sugarcoat this: Times are tough for Coinbase. The company already laid off about 18% of employees back in June. When announcing this week's layoffs, Armstrong acknowledged that the previous round of cuts didn't go far enough.

Coinbase is now trying to slash operating expenses by 25% quarter over quarter. The latest layoffs will cost the company $149 million to $163 million in one-time restructuring expenses, related to severance and other termination costs. That's a hefty number, but it still represents an immediate net savings. In the third quarter of 2022, Coinbase's operating expenses were over $1.1 billion. 25% savings, therefore, will save the company about $287 million quarterly.

This leads to my first takeaway: Coinbase will endure for now because of its financial position. As of Q3, the company had over $5 billion in cash and nearly $1 billion more in cryptocurrency assets. The move to cut operating expenses gives Coinbase an ongoing runway even during the dark crypto winter.

Moreover, Coinbase's bread-and-butter has been transaction fees from trading. But new revenue sources are quickly becoming more important. For example, the company enables staking for Solana and Ethereum, a growing revenue stream for the company. This staking revenue has the potential to increase, especially considering Ethereum only just recently switched to a staking protocol.

Additionally, Coinbase is experimenting and pushing innovation in the crypto space. With its latest round of layoffs, Armstrong said it was shuttering some projects with a "lower probability of success." But it'll still be looking to enable new ideas. Past experiments led to the co-creation of stablecoin USD Coin. And USD Coin's success to date is a big reason why Coinbase is now generating over $100 million in quarterly high-margin interest income.

This brings us to the second takeaway: Some parts of Coinbase's business are still growing, even amid this slowdown.

The Coinbase conundrum

It's not a satisfactory investment thesis to merely say that Coinbase is a buy because it will survive 2023. The Coinbase conundrum begs a deeper question, demanding investors to pick sides in one key debate: Does cryptocurrency even have a future?

Some would say, simply, "no". The bankruptcy of crypto-exchange FTX has drawn comparisons to Enron and is leading to greater regulatory scrutiny of the overall industry. The U.S. is discussing a Central Bank Digital Currency, which could lead to a banning of "rival" cryptocurrencies like Bitcoin.If you doubt the long-term hold of crypto and these outcomes seem likely to you, then Coinbase stock likely doesn't make sense for your portfolio.

But Armstrong is far more optimistic: He's said that "recent events will ultimately end up benefiting Coinbase greatly." To his point, Coinbase has historically embraced smart regulation. As a public company, it's also transparent about its finances, unlike some failed players.

If cryptocurrency has a bright future, then Coinbase stock may be the best way to invest. Its business model can profit from multiple possible outcomes in the space. And it's shown high cash-flow-generation potential. All this will likely make Coinbase a market-beating investment if -- and only if -- crypto winter ever gives way to springtime.

Coinbase Strikes a Massive Blow to Bankman-Fried and FTX

Cryptocurrency exchange CEO Brian Armstrong delivers a scathing critique of his rival.

LUC OLINGA
JAN 11, 2023 

Coinbase Chief Executive Brian Armstrong does not mince words.

Nearly two months after rival Sam Bankman-Fried's empire went bankrupt, he's just delivered a massive blow to what until recently was the institutional face of crypto.

Bankman-Fried's empire consisted of the FTX cryptocurrency exchange. Before its rout, it was the third largest cryptocurrency exchange based on volume after Binance and Coinbase. FTX last February was valued at around $32 billion.

Besides FTX, Bankman-Fried also founded Alameda Research, a hedge fund that also serves as a cryptocurrency trading platform for institutional investors.

The two companies had to file for Chapter 11 bankruptcy on Nov. 11 after they were unable to meet the massive withdrawals of funds requested by their customers and investors.
Armstrong: 'Dark Times Weed Out Bad Companies'

The Department of Justice and the Securities and Exchange Commission have filed a series of civil and criminal charges including fraud and conspiracy to defraud FTX clients and investors.

"Bankman-Fried was orchestrating a massive, yearslong fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire,” the SEC alleges in its civil complaint.

Bankman-Fried, known in the crypto space by his initials, SBF, was extradited to the U.S. on Dec. 21 by the authorities of the Bahamas, where he lived and where FTX is headquartered.

He was released after his parents, both law professors at Stanford University, signed a $250 million recognizance bond pledging their California home as collateral. Two other friends with significant assets also signed, according to news reports.

During a Jan. 3 hearing in U.S. District Court in New York, Bankman-Fried pleaded not guilty to the charges against him. Bankman-Fried's trial is scheduled for Oct. 8.

Like many in the crypto industry, Coinbase's Armstrong appears persuaded that Bankman-Fried is guilty.

"In 2022, the crypto market trended downwards along with the broader macroeconomy," he wrote to Coinbase employees on January to announce a new wave of layoffs. "We also saw the fallout from unscrupulous actors in the industry, and there could still be further contagion."

"Dark times also weed out bad companies, as we’re seeing right now. But those of us who believe in crypto will keep building great products and increasing economic freedom in the world."

Armstrong Stays Optimistic About Crypto Future

Unlike FTX, Coinbase (COIN) - Get Free Report is a public company. This means that it is more transparent, particularly vis-à-vis investors, and is closely monitored by regulators, including the SEC.

The company's books are also published at the end of each quarter, which enables everyone to examine them closely and get a good idea of ​​the health of the platform.

This was not the case of FTX, which was a private company. The fallen crypto exchange did not have to open its books to investors or anyone else. As a result, investors and customers had to believe everything its leaders wanted to tell them.

After these blows against Bankman-Fried and his empire, Armstrong wants to be optimistic about the future of the crypto industry, which has been weakened by repeated scandals.

"Despite everything we’ve been through as a company and an industry, I’m still optimistic about our future and the future of crypto," he wrote.

"Progress doesn’t always happen in a straight line, and sometimes it can feel like we’re taking two steps forward and one step back.

"But just like we saw with the internet, the most important companies not only survive but thrive during down markets by being rigorous with cost management, and continuing to build innovative products."

Coinbase has, in less than a year, cut 38% of its workforce, or nearly 2,000 people. The company saw its stock plummet: When it went public in April 2021, Coinbase stock had risen to $341. It is currently trading around $43, a fall of 88% in less than two years.

NFT Passes for a Zoom Call With Donald Trump Are Selling for Under $25



Andrew Hayward
Thu, January 12, 2023

Former U.S. President Donald Trump seized the attention of the NFT space in December with his digital trading cards launch, but the short-lived hype has since given way to crashing sales. Now the NFT passes tied to related perks are seeing similarly middling demand, with tokenized tickets for a group Zoom call with Trump selling for under $25 apiece.

Trump’s digital NFT cards were sold with the possibility of buyers receiving one of many potential benefits related to the disgraced politician, including dinner or an in-person meet-and-greet with Trump, private and group Zoom calls, and more.

Those NFT access passes—which like the trading cards were minted on Ethereum sidechain network Polygon—were airdropped to NFT card buyers starting last month. That rollout is still ongoing, with some NFT perk passes sent to card buyers as recently as this morning, per public blockchain data curated by the OpenSea marketplace.

Trump NFT Mania Gets a Very Short Term as Sales Nearly Vanish

Some of those NFTs are quickly being flipped to other users, but they’re not commanding sky-high prices like the original NFT cards did right after launch. Based on data from OpenSea, it’s mostly NFT passes to a group Zoom video call with Trump that are selling—and some have traded hands for less than $25 worth of ETH over the past day.

According to the NFT description, each Zoom call will include up to 2,000 people and last for 20 minutes. Attendees can submit questions before the call, but there’s no guarantee that their queries will even be asked, let alone answered.

To date, the Win Trump Prizes NFT collection—which hails from the same developer as the original Trump NFT collectibles—has yielded just 35 ETH (about $48,500 today) worth of trading volume on secondary markets, with the listed items starting at just 0.0174 ETH ($24) apiece.

The largest recorded sale to date was 5 ETH (over $6,900) for a redemption ticket for a digitally signed Trump NFT trading card on December 21, followed by a 2 ETH (nearly $2,800) sale of a Trump meet-and-greet pass on January 3.

Some NFT holders are at least trying to swing sizable sales of their perk passes: a ticket for a one-on-one Zoom meeting with Trump is currently listed for 200 ETH ($277,000) on OpenSea, with a gala dinner ticket NFT listed for 50 ETH (over $69,000). That doesn't mean, however, that these sellers will get their asking prices for these NFTs, or anything close to them.

An NFT is a blockchain token that represents ownership of a unique item, including digital items like artwork and collectibles. NFTs can also serve as an access pass or redemption ticket for digital and physical experiences alike.

Trump’s NFT trading cards launched on December 15 to mostly mocking responses across Crypto Twitter and even criticism from some of his fervent supporters. Still, the project sold through 44,000 of the Polygon NFTs for $99 apiece within 24 hours (another 1,000 NFTs were held back by the project creators), and then secondary market sales skyrocketed.

Crypto Twitter Reacts to Official 'Game of Thrones' NFTs: 'Worst Thing I've Ever Seen'

Even late night comedy shows like “Saturday Night Live” got in on the Trump NFT mania after the collection generated millions of dollars’ worth of secondary sales within the first few days alone and the buzz pushed prices to several times that of the original asking price.

But the hype spike was short-lived, and both NFT prices and secondary sales volume have fallen sharply since. On Sunday, the project set a new daily low sales tally of just over $21,000 in total, per data from CryptoSlam—down more than 99% from the peak day of more than $3.5 million worth of sales on December 17.

Mexico in talks with mining companies about lithium

Thu, January 12, 2023 

MEXICO CITY (AP) — Mexico’s president said Thursday the government is in talks to persuade companies that have started lithium mining projects in Mexico to give up their plans.

President Andrés Manuel López Obrador did not say what the talks involved or whether the companies would be offered compensation. But he made it clear that whatever they might be allowed to mine — or help the government mine — they wouldn't be permitted to produce lithium on their own.

In 2022, Mexico nationalized lithium mining and extraction, with a state-run company having exclusive rights to mine the metal used in electric car batteries and other devices.

López Obrador said that “one or two” companies had started projects, though they had not obtained all necessary permits, such as for water use of environmental impact statements.

He said the government is “seeking to reach an agreement with them” to accept the new framework. But he acknowledged the matter may end up in the courts.

“The lawyers are looking into it. We are going to talk to these companies, but the concessions have not been legalized,” the president said, vowing that “we are going to defend what belongs to the nation” if the firms take the case to court.

The Mexican government has no experience in mining lithium.

Only one lithium mine in Mexico, operated by a Chinese company in the northern state of Sonora, is anywhere close to starting production.

That operation, Bacanora Lithium, appears to be Mexico’s only viable private lithium mine and had been expected to start production in 2023. It is owned by Chinese lithium giant Ganfeng International.

At one time, the government had said the eight concessions for mining lithium already granted in Mexico would be respected as long as they were well on the way to producing the metal.

MINING IS NOT GREEN
Burning Man latest foe of 'green energy' project in Nevada

SCOTT SONNER
Thu, January 12, 2023 

RENO, Nev. (AP) — Add Burning Man to the list of plaintiffs challenging one of the growing number of “green energy” projects in the works in Nevada.

Lithium mines aimed at boosting production of electric vehicle batteries and geothermal power plants that tap underground water to produce renewable energy are at various stages of planning and development in the nation’s top gold mining state.

Environmental groups, Native American tribes and ranchers are among those who’ve filed lawsuits over the past two years seeking to block individual projects.

They say that while they support reductions in greenhouse gas emissions to help combat climate change, the commercial developments on public land in Nevada were approved illegally and will have their own environmental and cultural consequences.

Now, the group that stages perhaps the most famous counterculture event in the world is among those facing off against the U.S. government over geothermal exploration in the Nevada desert where 70,000 free spirits known as “Burners” gather every summer.

The San Francisco-based Burning Man Project and four co-plaintiffs filed the new lawsuit in federal court in Reno this week accusing the Bureau of Land Management of breaking environmental laws in approving Ormat Nevada Inc.’s exploratory drilling in the Black Rock Desert 120 miles (193 kilometers) north of Reno.

Friends of Nevada Wilderness, Friends of Black Rock/High Rock Inc. and two local residents of Gerlach joined the suit that says the agency’s environmental review of the exploration project ignored potential harms that could come from a large-scale geothermal project.

“Ormat’s exploration project will lay the foundation for turning a unique, virtually pristine ecosystem of environmental, historical and cultural significance into an industrial zone, and permanently alter the landscape,” the lawsuit says.

Ormat Vice President Paul Thomsen said the lawsuit has no merit.

The Bureau of Land Management has no comment on the lawsuit, agency spokesman Brian Hires said in an email to The Associated Press.

The drilling is planned within the Black Rock National Conservation Area, home to the festival where themed tent villages and avant-garde art exhibits sprout from a barren desert basin that was once the floor of an ancient lake.

Clothing is optional, but participation is required at the psychedelic celebration of art, music and sometimes anarchy itself as aging hippies, Silicon Valley executives and other curiosity seekers gather around drum circles and pagan fire rituals.

Or, as the lawsuit says, where attendees “over the course of eight days, camp and participate in a unique experimental community.”

“The ethos and culture of the event are rooted in the Ten Principles of Burning Man,” including “radical inclusion,” gifting, self-expression, communal effort, civic responsibility and “Leaving No Trace,” the lawsuit explains.

The lawsuit said Ormat has attempted to evade analysis of the geothermal power plants' potential negative effects on the environment by segmenting the project, which limits BLM’s review to only the first stage of its plans: exploration.

“However, this first stage merely confirms where the resources are located to inform future industrial scale geothermal energy development," the suit said. “Once the exploration project begins, it will be impossible to stop the effects of the entire geothermal production project.”

The exploration project calls for 19 test wells and pads, associated facilities and 2.8 miles (4.5 kilometers) of improved and new access roads.

The proposed wells would be adjacent to a number of unique hot springs that are relied upon by the local community for tourism. The springs also are ecologically significant because they're “interconnected with each other, the ecosystem and the pristine landscape of the region,” the suit said.

“After participating in the public process and seeing no movement on our concerns, we filed this lawsuit to help ensure the impacts from the proposed project are minimized, and that Ormat is a good corporate citizen in this environmentally sensitive, economically vulnerable area of northern Nevada,” said Adam Belsky, Burning Man Project’s general counsel.

Thomsen said in an email that Ormat “looks forward to prevailing in the lawsuit and continuing its contribution to Nevada’s green energy, zero emissions future, which will offset some of the copious amounts of fossil fuels the Burning Man Project annually emits in the Black Rock Desert.”

Doctors say men are getting more vasectomies amid abortion restrictions nationwide

Jayla Whitfield-Anderson
·National Reporter
Thu, January 12, 2023 

Doctor and patient. (Getty Images)

After the U.S. Supreme Court overturned Roe v. Wade, the 1973 landmark case that protected abortion rights, medical professionals say they have seen a drastic increase in vasectomies.

Vasectomies offer a form of permanent birth control for men, and roughly 500,000 are performed every year in the United States.

“There was an increase of basically 100% in the number of vasectomies from the moment Roe v. Wade was overturned,” Dr. Esgar Guarin, the co-founder of SimpleVas Medical Clinic, told Yahoo News.

Guarin, a doctor in Des Moines, Iowa, who trained in maternal, child and reproductive health, says interest from male patients in learning more about the procedure increased after the decision in Dobbs v. Jackson Women's Health Organization overturned Roe.

“Within only 48 hours, we signed up 50% of the patients that we normally sign up in a month, just immediately after June 24, and that trend continued,” he said.

In November, a Planned Parenthood office in St. Louis also noted a spike in vasectomies in an interview with Live Action. “Since the Dobbs decision, we have seen an increasing number of male-bodied people coming and requesting this service [vasectomies],” Dr. Margaret Baum of Planned Parenthood said. “We performed 142 vasectomies in 2021. Already this year, we’ve done close to 200 in 2022.”

But doctors say this isn't the only major event that has pushed men to seek a permanent form of contraception.

“During the Great Recession, there was a marked increase in requests for vasectomies, because people felt that the economy was such that they couldn't afford to have children,” Marc Goldstein, professor of reproductive medicine and urology at Weill Cornell Medical College, told Yahoo News.

Between 2007 and 2009, an estimated 150,000 to 180,000 additional men received a vasectomy, according to the American Society for Reproductive Medicine.

“And we're seeing exactly the same thing happening now,” Goldstein said. “We've seen a doubling or tripling overall in the number of vasectomies, and they marked a drop in the number of reversals since Roe v. Wade.”

Abortion rights activists at a protest in Los Angeles on June 24, 2022. 

(Frederic J. Brown/AFP via Getty Images)

Doctors note a slight increase in the number of patients younger than 30 with no children seeking a vasectomy, with the largest increase among in men in their mid- to late 30s.

“We saw a bump up of about 20% to 25% from 35- to 37-year-old men who had decided not to have any children in years prior, but had done nothing about it, and were purely relying on the partner for their contraception,” Guarin said.

As abortion rights are restricted nationwide, experts say vasectomies do not provide a replacement for access to abortion.

“Contraception is an integral part of ensuring reproductive justice, freedom and autonomy, but it always has to exist with access to other pregnancy outcomes, including access to abortion,” Katrina Kimport, professor of reproductive sciences at the University of California, San Francisco, told Yahoo News.

Even though medical professionals say vasectomies are cheaper, safer and faster, more women get their tubes tied. Vasectomies are an outpatient procedure with a low risk of complications and take less than an hour to complete.

“Tubal ligation and other procedures for women are options, but they usually have a higher risk of complications and may cost more,” Dr. Nicholas Toepfer, a UCHealth urologist, said in a UCHealth article.

“There has never been a single death from a vasectomy ever. In tubal ligation every single year in this country alone, 25 to 30 women die from getting a tubal ligation, because it requires a general anesthetic,” Goldstein said.

Since vasectomies have rarely been the popular choice, women have often carried the burden of preventing pregnancies.

“Women and people who can get pregnant are largely expected to prevent pregnancy on their own for 30 years or more. And there's not enough public recognition for how hard that is,” Krystale Littlejohn, associate professor of sociology at the University of Oregon, told Yahoo News. “Responsibility for preventing pregnancy shouldn't be a stopgap effort for men, and it shouldn't be something that is done periodically. It is a long-term commitment to their partners and to themselves.”

Doctors suggest that men could step up more often. “It's sad to see that it took restricting the rights of an individual to choose about her own body for the counterparts to say, 'You know what, I probably should be doing something, because I cannot rely on the very last option, because it's no longer available,'” Guarin said.

IF YOU DON'T WANT THE CUT