Crypto Biz: Contagion engulfs Bitcoin miners as bear market continues

Never underestimate how quickly things can deteriorate in a sector as volatile as crypto, especially in a bear market. Prices can always go lower in the depts of crypto winter and casualties can multiply overnight. 2022 has been a year of never-ending contagion; with everyone focused on Binance, high-profile Bitcoin (BTC) miners were going bust. 

This week, mining company Core Scientific filed for Chapter 11 bankruptcy. Greenridge, another miner, received a $74 million debt restructuring lifeline from New York Digital Investment Group. Bitcoin is the most valuable commodity in a bear market, but miners must keep the lights on.

The news isn’t all negative on the mining front. This week, German miner Northern Data reported that it expects to generate up to $206 million in revenue from its mining operations this year. It also has no financial debt on its books, giving it more flexibility in dealing with market conditions.

This week’s Crypto Biz dissects Core Scientific’s financial troubles, FTX’s clawback warning, Celsius’ pool of potential bidders and Visa’s latest intellectual foray into crypto.

Bitcoin miner Core Scientific reportedly filing for Chapter 11 bankruptcy

Crypto contagion has spread to the Bitcoin mining industry, with miner Core Scientific reportedly filing for Chapter 11 bankruptcy in Texas. The news came just days after a creditor offered Core Scientific $72 million to help shore up its finances amid the bear market. That deal did not go through. However, Core is said to continue its mining operations and has no plans to liquidate its remaining BTC. The company was forced to offload 9,618 BTC in April to stay operational. Other Bitcoin miners also feel the pinch and are pursuing various means to protect their operations during an extended bear market.

FTX warns it will claw back political donations and contributions

When you think you’ve heard all you needed to hear about Sam Bankman-Fried and FTX, new developments emerge. This week, the bankrupt crypto exchange warned that anyone who received political donations or contributions from SBF or other FTX executives could have those funds clawed back as part of a fund recovery process. This may have been triggered by some Democratic recipients coming forward and pledging to give back the now-tainted funds. Do you know who else received campaign donations from SBF? The Biden 2020 election campaign. So far, the president hasn’t signaled whether he would return the $5.2 million worth of donations SBF made to his campaign during the 2020 presidential election, but that could change. This is a story worth monitoring.

Sharing our press release just issued: FTX Debtors Announce Process for Voluntary Return of Avoidable Payments https://t.co/l57F7zgKPJ

Celsius amasses 30 potential bidders for its assets, withdrawal motion approved

Bankrupt crypto lender Celsius has amassed a long list of potential buyers for its remaining assets, raising cautious optimism that it would be able to sell its retail platform and mining businesses at a competitive price. Since September, more than 125 parties have been contacted and 30 potential bidders have emerged. Celsius’ latest presentation, part of its bankruptcy proceedings, suggested that the company’s valuation stood at $2.6 billion as of Nov. 25. The company has a $1.2 billion hole in its balance sheet. In other words, there is $5.5 billion owed to users versus only $4.3 billion in assets.

Visa dreams up plans to let you auto-pay bills from your crypto wallet

For all the fear, uncertainty and doubt plaguing the cryptocurrency market, we can always rely on Visa for positive reinforcement. The crypto-friendly credit card giant recently proposed a business solution to streamline digital asset payments. While still in the thought-experiment phase, Visa imagines an auto-pay feature enabling crypto users to pull funds directly from their Ethereum-powered self-custodial wallets. They can then use these funds to make auto payments on their telephone bills, Netflix subscriptions and other recurring charges. It’s a highly technical proposal, but we dissected it in lay terms to give you the full scoop.

Before you go: Is Binance insolvent or is it just FUD?

How far will the crypto contagion spread? As centralized platforms fall by the wayside, culminating in the collapse of FTX in November, more and more people are shifting their attention to Binance. Warranted or not, Binance has been at the center of controversy over concerns about its financial health and rumors that the exchange would become the target of a U.S. money laundering lawsuit. In this week’s Market Report, I sat down with Marcel Pechman and Joe Hall to discuss any merit to the Binance FUD. You can watch the full replay below.

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