The company had previously raised several rounds of financing, with a $2.3 million seed round in 2019 and a $5 million Series A in 2021.
Crypto tracking platform DappRadar shuts down, citing financial woes
Amid a month of falling crypto prices, the crypto tracking platform DappRadar has announced it will be shutting down after seven years of operation. "Running a platform of this scale became financially unsustainable in the current environment," the company announced on Twitter.
Elixir shuts down deUSD after Stream Finance halt
After the defi yield platform Stream Finance announced a $93 million loss, Elixir announced it would be discontinuing its deUSD synthetic stablecoin. Stream Finance owes $68 million to Elixir, and holds around $75 million deUSD.
Elixir has announced that they plan to allow deUSD holders to redeem their tokens for USDC through a process that will also eliminate the risk of Stream Finance cashing out their deUSD without repaying their loan. According to Elixir, "Stream comprised of 99%+ of the lending positions (and has decided to not repay or close positions)".
Fortress Trust is insolvent
Nevada's Financial Institutions Division has issued a cease and desist order against Fortress Trust, stating that the firm is "on the verge of insolvency". The company admits it "failed to safeguard assets under its custody and is unable to meet all customer withdrawals". The company has only around $1.3 million in actual assets in custody, while it owes customers around $12.3 million.
In 2023, Fortress experienced a $15 million theft. Though the company originally announced it would be acquired by Ripple, which had agreed to cover the shortfall, the deal eventually fell through. It's not clear how — or if — the funds were ever restored.
Fortress's insolvency has strong parallels to that of Prime Trust, another trust company that shares a founder in Scott Purcell. NFID issued a cease and desist to Prime Trust in June 2023 after finding the company was insolvent; in bankruptcy proceedings, that company later blamed much of the insolvency on losing access to a hardware wallet that held customer assets.
- Order to cease and desist from violations of NRS 669, State of Nevada Department of Business and Industry Financial Institutions Division.
Zero Edge crypto casino enters liquidation after founder gambles away its seed money
Richard Kim, the founder of the Zero Edge crypto casino, resigned on July 2, 2024 after blowing most of the project's seed funding. Kim was a former executive of Galaxy Digital, and Galaxy was among Zero Edge's investors. Within a day of closing a seed financing round on June 20, Kim had begun putting the money into leveraged crypto bets, resulting in "the significant loss of company funds". On June 29, he admitted in an email to Zero Edge shareholders that he had blown around $3.67 million in company funds.
Kim admitted in an interview with CoinDesk at the time that "I really fucked up. I lost this money. It was grossly negligent. But I didn't intend to go run away with this money." He claimed that it all began when he lost $80,000 to a phishing website. "This triggered my old demons, the need to 'make it back' to preserve my reputation. ... [I] started down a negative spiral of leverage trading, raising more capital, and hiding the truth. ... By the seed round's close, I was ready to rebuild, to start fresh, putting past demons aside. But the moment I received the proceeds, something snapped. I felt compelled to make up for my missteps. Within days, millions were in leveraged longs. When bitcoin crashed, I experienced a complete wipeout."
What remains of the Zero Edge company has petitioned for voluntary liquidation in the Cayman Islands, where it was registered. Company liquidators tell a slightly different story from Kim: that Kim misappropriated most of the company's assets and then "disappeared".
ThorChain is insolvent
The ThorChain project is in crisis amid news that the project is insolvent. In order to prevent what would effectively be a bank run and likely death spiral, the project has paused portions of the protocol while determining how best to handle the problem. According to Twitter user TCB, the project has almost $200 million in liabilities, with only $107 million in assets — assets which can be quickly withdrawn or depleted in the case of a panic.
The team has announced that the pause will last for 90 days as they explore options to save the project.
- Tweet thread by TCB [archive]
Digital Currency Group settles with the SEC for $38 million over misleading statements surrounding Genesis collapse
The Digital Currency Group has agreed to settle with the SEC for $38 million over charges that its Genesis subsidiary misled investors. When the hedge fund Three Arrows Capital blew up and defaulted on a margin call in June 2022, DCG publicly downplayed the fact that their entire business was at risk, and overstated its ability to bail out the Genesis subsidiary by taking on its liabilities and doing some weird accounting maneuvering involving a $1.1 billion promissory note. In November, with further crypto market turmoil, Genesis could no longer meet withdrawal requests and collapsed. The company filed for bankruptcy the following January.
- Order from the SEC
MakersPlace NFT marketplace shuts down
Citing "ongoing market challenges and funding difficulties", the MakersPlace NFT platform announced it will be shutting down after six years of operations. The company had raised $30 million in funding in August 2021 from investors including Eminem, Sony Music, and Coinbase Ventures.
They wrote in their announcement that, although they had some money left, the "prolonged downturn" in the NFT market was causing them to "anticipate significant challenges in securing further investment which would make it difficult". They said they would be returning unused funding to investors and shutting down most of the site's functionality immediately.
- "MakersPlace Announces Market Exit", MakersPlace
Bitcoin mining company Rhodium Enterprises files for bankruptcy
The Texas-based Rhodium Enterprises bitcoin mining company has filed for bankruptcy, disclosing debts between $50 and $100 million and total assets between $100 and $500 million. The company had tried to begin restructuring, but was not able to reach agreement among shareholders, and so decided to enter bankruptcy.
Bitcoin mining has been an extremely challenging business in recent times, partly due to volatile crypto prices over the last few years, and due to diminishing miner rewards following the April halving event.
Rhodium Enterprises had been showing signs of trouble, including failing to make scheduled loan payments earlier this month. In December 2023, a dispute between them and a subsidiary of the Riot Platforms bitcoin mining group culminated in armed security removing Rhodium employees from a bitcoin mining facility in Rockdale, Texas, where Rhodium was leasing bitcoin miners. The case was later sent to arbitration.
Yield App declares insolvency, citing FTX losses
Yield App, a crypto investment platform, has announced that it will be entering liquidation proceedings. Citing "significant financial challenges", the project announced that the platform would be suspended pending liquidation.
In the immediate aftermath of the FTX collapse in November 2022, Yield App CEO Tim Frost had assured customers that "Yield App has no exposure to Alameda or the FTT token, and no signifiant exposure to FTX". However, Yield is now — going on two years after the FTX collapse — claiming to be suing "several hedge funds" that had lost money on FTX.
- "Crypto platform Yield App shuts down citing FTX losses", CoinTelegraph [archive]
- Statement and FAQ by Yield App [archive]
Australian NGS Crypto mining fund collapses
NGS Crypto, which sold "crypto mining packages" to interested investors, has been put into receivership. The Australian firm encouraged customers to set up a self-managed super fund — a type of retirement fund — to achieve returns they said were powered by crypto mining. The firms advertised returns of up to 16% annually, and promised that investors would receive 100% of their initial investment back at the term's completion — even "in the unlikely event that crypto mining becomes unprofitable".
NGS and its associated business is believed to have pulled in around AU$62 million (US$42 million) from around 450 Australians.