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“It’s a very trying time for the crypto sector, and what I worry about is the impairment to that portfolio of $5 billion because obviously that’s a recovery pool for our customers,” John J. Ray III, FTX’s new CEO, told a U.S. House committee last month. “Many of those investments are likely troubled.”
Thomas Braziel, an investor who buys claims from creditors in bankruptcies, said he expects creditors will eventually get between 20% and 60% of their money back, though years into the future. Given that the venture portfolio was heavily invested in crypto, it is unlikely to contribute much to that total, he said. 
As one of the world’s largest bitcoin miners, Genesis Digital is tethered to the crypto market.
Bitcoin mining works like this: Miners process transactions on the network—solving complex equations in a process that rewards them in newly created bitcoin. In the early days of crypto, most of the digital number crunching was done on home computers, before an industry formed of massive, energy-sucking data centers looking to process bitcoin transactions at scale.
When bitcoin prices jumped in 2021, the valuations of large miners surged into the billions of dollars. Given that these companies’ end product is bitcoin, their share prices tend to soar when prices rise and plummet when they fall. With bitcoin down over 70% from peak, shares of many publicly traded miners are down between 70% and 99% in the past year; the largest, Core Scientific Inc., filed for bankruptcy protection last month.
Adding to the challenges is that the price of electricity—a top expense for bitcoin miners—is up sharply.
Genesis Digital got its start in 2017 when a duo of German bitcoin miners joined forces with a trio of Kazakh entrepreneurs. Their plan was to set up bitcoin-mining data centers in Kazakhstan, taking advantage of its relatively cheap, coal-fueled electricity, company executives have said in video interviews posted online. 
The German co-founders, Marco Streng and Marco Krohn, came with several years of bitcoin-mining experience, while the Kazakh businessmen had local ties and a background in commodities.
“We brought our expertise and they brought the technical know-how,” Abdumalik Mirakhmedov, one of the Kazakhstan-based co-founders and its former chairman, said in a Genesis Digital video in 2021, referring to the German co-founders.
Mr. Mirakhmedov was interested in business from an early age, and sold ice cream machines when he was 14, he said in the video. After college, he dove into the commodities market and owned a company in a partnership with commodities giant Trafigura Group.
Another co-founder, Ra**** Makhat, had served on the boards of companies owned in part by the Kazakh government, including Kcell, a large telecom firm, according to the companies. 
With access to cheap power in Kazakhstan, Genesis Digital marketed itself as a low-cost provider of bitcoin—one that was able to grow large by building and running its own data cent

Sam Bankman-Fried’s Supersized Bet: $1 Billion for a Bitcoin Miner on the Kazakh Steppe
Genesis Digital is one of the largest assets in the FTX-Alameda wreckage
Just before crypto markets plunged last year, Sam Bankman-Fried’s hedge fund made a $1 billion bet on Genesis Digital Assets, a Cyprus-registered bitcoin miner rigged to consume a small city’s worth of electricity in Kazakhstan.
The cash injection from Mr. Bankman-Fried’s Alameda Research LLC was supersized even for the red-hot crypto startup world, and it dwarfed the FTX founder’s other investments in private companies.
Genesis Digital is now one of the largest assets in the FTX bankruptcy, the product of a globe-spanning spending spree in which Mr. Bankman-Fried’s companies poured money into crypto tokens, arena branding deals and Bahamas real estate.
E?xtracting value from Genesis Digital could prove difficult. Bitcoin-mining company valuations have plummeted. Only around half of the Alameda funds in Genesis Digital went to the company’s operations, according to Cyprus corporate-registration documents and people familiar with Genesis Digital. More than $500 million bought existing shares from two Genesis Digital co-founders, a detail that hasn’t been previously reported.
A Genesis Digital spokeswoman said that the company received money from Alameda “at market value” in the usual course of fundraising and that its founders own most of the company.
Anthony Scaramucci’s SkyBridge Capital, which invested more than $60 million in Genesis Digital, marked down the value of its stake in the bitcoin miner by 59% between its June peak and September, according to SkyBridge securities filings.
A SkyBridge spokeswoman declined to comment. 
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FTX collapsed in November and Mr. Bankman-Fried pleaded not guilty to charges earlier this month in federal court. Prosecutors allege that he defrauded investors and siphoned billions of dollars of FTX customer cash into his hedge fund. FTX’s new management is sorting through precisely where all the cash went.
A key chunk of what remains for FTX and Alameda creditors to pick over are scores of investments in startups such as Genesis Digital. FTX, Alameda and other entities controlled by Mr. Bankman-Fried put more than $5 billion into more than 150 startups, as well as venture firms like Sequoia Capital, according to Alameda company documents viewed by The Wall Street Journal.
Many of those investments were concentrated in the crypto sector itself, adding to the challenges of recovering money in the bankruptcy. 

Mon - we’ll have to get you your own soapbox down on Threadneddle St maybe during the summer months where you can preach hedge fund manipulation.
Fair play for spreading the word, but can we keep it to once a week on hear please.

M - I have been in I am no long an investor does not mean I cannot share my view.
‘Could it be you like all the other derampers want to get involved’ yes that’s what ‘I won’t touch it’ means. I despair!
This is one boat I’ll happily miss, a much as the person who turned up late to catch the sailing of the titanic.

Won’t touch it. I hope those still in do well, but these rampers are shameful, how many are now trapped from last weeks high?

PW tried to mix it with the big boys and got royally shafted, about to lose the lot in the near future. Not sure about a board seat Chaebol......maybe as novogratz ‘a chauffeur, well it’s a seat of some description :)

You couldn’t make it up - ‘Argo maintains ownership of its two data centers in Quebec, which have a combined power capacity of approximately 20 MW and attractive power prices.’ Oh the irony.!

The rats are leaving the sinking ship

Hex - did you hear Novogratz state on cnbc today that Galaxy Digital bought at texas miner recently (Freudian slip, perhaps). Not so fast Mike but give it a few months, you’ll soon own the lot, lock, stock and barrel.

Is it a monster, is it a monster?
Sort of....... it’s an interest rate rise.
Oh dear an rises likely to get wiped out come the end of the month
BTC no likey.

PI - you still in or are you out at 13.2p, haven’t been keeping up?

"This proposal involves reducing fees from 2% to 75 bps and using Reg M, which would close the GBTC discount and therefore save GBTC holders!
"The other being the bear case for GBTC holders where Gemini forces Genesis into bankruptcy.
"This could result in DCG becoming bankrupt, as they likely do not have the cash to pay off Genesis’s callable loans ($1.1bn).
"This means that Grayscale assets owned by DCG ($560 mill worth of GBTC) would be at risk of being sold."
Genesis suspended redemptions and new loans after the collapse of the FTX cryptocurrency exchange in November 2023.
Genesis had handled the backend business for Gemini Earn, which before the current crypto crash was offering as much as 8% interest when users deposited funds.
But trouble surfaced once Genesis faced a rush of withdrawals from its lending arm after FTX’s implosion.
Gemini’s customers have now been unable to redeem more than $900m for nearly two months.
DCG was founded by Barry Silbert in 2015 and quickly grew to be a major player in the crypto space.

CNBC via Getty Images
Investors are watching the movements of the Digital Currency Group with trepidation, with one report warning that if the firm slides into further financial distress it "could severely impact crypto markets".
The US-based Digital Currency Group (DCG) is a centre piece of the crypto jigsaw and is the parent of the Grayscale Bitcoin Trust, which owns 653,633 bitcoins (BTC-USD).
DCG is a venture capital outfit that focuses on the digital currency market with subsidiaries such as CoinDesk, Genesis and Grayscale Investments (GBTC).

The group's current problems stem from its Genesis subsidiary, which reportedly owes crypto-platform Gemini $900m.
Gemini allocated user funds to Genesis in order to generate yields for its interest-bearing Gemini Earn accounts.
Watch: Web3 sectors to watch in 2023 | The Crypto Mile
On Monday, Gemini co-founder Cameron Winklevoss posted an open letter to DCG founder and CEO Barry Silbert saying: "Every time we ask you for a tangible engagement, you hide behind lawyers, investment bankers, and process.
"After six weeks, your behavior is not only completely unacceptable, it is unconscionable."
Winklevoss claims that DCG owes its Genesis subsidiary $1.675bn, of which around $900m is owed to Gemini Earn and its 340,000 users.
Crypto-research firm Arcane Research have released a report urging investors to pay attention to the ongoing financial distress related to DCG "as the outcome could severely impact crypto markets".
Arcane Research said: "In short, if DCG enters bankruptcy, the company could be forced to liquidate its assets.
"This could force DCG into selling its sizable positions in GBTC and unknown positions in ETHE and other Grayscale trusts."
Marcus Sotiriou, crypto analyst at GlobalBlock, spoke to Yahoo Finance to give his views on how the bitcoin could be impacted by the developments with DCG and Gemini.
He said: "If DCG goes under or tries to stay solvent by liquidating its GBTC, it would find a buyer to conduct an orderly transaction as opposed to just dumping it on the market.
"I think bitcoin would suffer out of fear though, hence causing disorderly sell pressure on the open market."
He also speculated on how DCG's current woes could play out in a Linkedin post on Sunday.
He said: "With DCG owing $900m to Gemini, and Grayscale's value far less than this debt, I see two potential outcomes for Grayscale and GBTC holders.
"One being that DCG is forced to sell Grayscale in order to generate cash to pay off creditors.
"In this case, Valkyrie has made a proposal to take over as the new Trust administrator and manage GBTC.

Thanks spights.

Does anyone have a more precise estimate of when Mad Dog 2 will come online other than ‘Mid 2023’?

capacity of approximately 9.9 EH/s. Additionally, shipments of 5,130 S19-series miners have been initiated and are expected to be received during January 2023.
Infrastructure Update
The Company is pleased to announce that Building D has reached completion, with the final installation of indoor water cooling frames and completion of electrical testing, and miners deployed. Progress continues in Building E, where Riot’s construction and engineer teams remain focused on the installation of the air-cooling rack system, electrical installation and testing.
Estimated Hash Rate Growth
During Q1 2023, Riot anticipates a total self-mining hash rate capacity of 12.5 EH/s, assuming full deployment of approximately 115,450 Antminer ASICs, but excluding any potential incremental productivity gains from the Company’s utilization of 200 MW of immersion-cooling infrastructure. Substantially all of Company’s self-mining fleet will consist of the latest generation S19-series miners. In addition to the Company’s self-mining operations, Riot hosts approximately 200 MW of institutional Bitcoin mining clients.
Human Resources
Riot is pleased to announce the hiring of Brian Morgenstern as Head of Public Policy. Mr. Morgenstern previously worked at the White House as deputy press secretary and deputy communications director and at the U.S. Treasury Department as deputy assistant secretary, and will play a key role in developing and driving policy priorities and principles for the Company, and in interacting with local, state, and federal legislative bodies and government agencies to represent and protect Riot’s interests.
Riot is currently recruiting for positions across the Company. Join our team in building, expanding, and securing the Bitcoin network. Open positions are available at:  https://riotplatforms.com/careers.
About Riot Platforms, Inc.
On January 3, 2023, Riot announced the rebranding of its corporate name from Riot Blockchain, Inc. to Riot Platforms, Inc, underpinning the Company’s growth strategy to continue expanding its increasingly diversified business operations. Riot’s common stock continues to be listed for trading on NASDAQ Capital Market under the same ticker symbol ‘RIOT’.
Riot’s (NASDAQ: RIOT) vision is to be the world’s leading Bitcoin-driven infrastructure platform.
Our mission is to positively impact the sectors, networks and communities that we touch.  We believe that the combination of an innovative spirit and strong community partnership allows the Company to achieve best-in-class execution and create successful outcomes.
Riot is a Bitcoin mining and digital infrastructure company focused on a vertically integrated strategy. The Company has Bitcoin mining data center operations in central Texas, Bitcoin mining operations in central Texas, and electrical switchgear engineering and fabrication operations in Denver, Colorado.
For more information, visit www.riotplatforms.com.

Riot Achieves Numerous Key Milestones and Produces All-Time High of 659 Bitcoin in December 2022
Castle Rock, CO, Jan. 04, 2023 (GLOBE NEWSWIRE) -- Riot Platforms, Inc. (NASDAQ: RIOT) (“Riot” or “the Company”), an industry leader in Bitcoin (“BTC”) mining and data center hosting, announces unaudited production and operations updates for December 2022.
Bitcoin Production and Operations Updates for December 2022
Riot produced 659 BTC, an increase of approximately 55% as compared to December 2021 production of 425 BTC.
Riot earned $4.9 million in power credits as a result of curtailment activity, equivalent to approximately 290 Bitcoin using the December 2022 weighted average daily closing Bitcoin price of $16,967.
Riot held approximately 6,952 BTC, all produced by the Company’s self-mining operations, as of December 31, 2022.
Riot sold 600 BTC, generating net proceeds of approximately $10.2 million.
Riot had a deployed fleet of 88,556 miners, with a hash rate capacity of 9.7 exahash per second (“EH/s”), as of December 31, 2022.
“Riot achieved a number of key milestones during the month of December,” said Jason Les, CEO of Riot. “We successfully deployed an additional 16,128 S19-series miners, bringing our hash rate capacity to a new all-time high of 9.7 EH/s. Additionally and as previously indicated in our last monthly production update, we transitioned to a new mining pool in early December. Based on our expanded hash rate capacity and while predominantly operating in our new mining pool, Riot achieved a new record of 659 Bitcoin produced this past month.
“In late December, Texas and much of the country experienced severe winter weather (“the December storm”), significantly disrupting the holiday season for many Americans. A portion of Riot’s operations at our Rockdale Facility were also unfortunately impacted by the December storm, as some sections of piping in Buildings F and G, our immersion buildings, suffered damage and need replacement, impacting approximately 2.5 EH/s of our total hash rate capacity. Our team is working diligently on the necessary repairs, which we anticipate will take a number of weeks, during which time the affected hash rate will come back online incrementally. Additionally, in anticipation of the December storm, Riot voluntarily curtailed operations in order to ensure the safety of our employees and to contribute to the stability of the ERCOT grid during this critical time for Texans, and as a result, Riot generated $4.9 million in additional power credits in December, which will further lower our cost of production.”
Mining Deployment and Shipment Update
During the month of December, Riot received 5,019 new S19-series miners, increased its deployed fleet by 16,128 S19-series miners, with approximately 1,152 miners staged for deployment. Upon deployment of the staged miners, the Company expects to have a total of 89,708 miners deployed with a hash rate

MM - what do you learn when everyone is saying the same thing? Nothing.
Well until they ban shorting (but they won’t) thats what we have to live with. If you don’t like the rules, stop playing or learn to adapt.

Sih - i would say most would like to read counter opinions. If they attack you personally, people can see that person for what they contribute, so don’t let them stop you.

AS1 - thanks for clarifying.

AS1 - are you saying there will be no rate rise in Feb? They will pause in Feb? I’m thinking more rises to come
Yes need extreme swings to keep the stimulus flowing that the markets are addicted to.