Rising Bankruptcy Rates Among US Firms Highlight Crypto Impact

Surge in Bankruptcy Rates

The US has recently witnessed a surge in bankruptcy rates among firms, with a significant portion attributed to crypto-based companies. Recent data indicate that January saw the highest number of bankruptcy filings for companies with liabilities exceeding $50 million since 2010. This troubling trend highlights the financial instability within the crypto sector.

Digital Currency Group's Losses

Digital Currency Group, the parent company of Genesis, reported a substantial $1.1 billion loss for 2022. The losses were primarily due to the firm's exposure to now-defunct crypto entities, including Three Arrows Capital and Alameda Research. This financial setback underscores the volatile nature of the crypto industry and its impact on related businesses.

Binance.US and Voyager Digital

In a significant development, 97% of Voyager Digital's customers have approved a proposal for Binance.US to acquire the bankrupt crypto lender's assets. This move indicates a strong customer preference for Binance.US's takeover, despite objections from the US Securities and Exchange Commission regarding potential violations of federal securities laws.

Crypto Industry Lobbying Efforts

The crypto industry has responded to increased regulatory scrutiny by ramping up its lobbying efforts in Washington. A recent analysis revealed that the sector spent a record-breaking $21.55 million on lobbying activities. This surge in spending reflects the industry's desire to gain more influence and support amidst tightening regulations.

The current landscape of the crypto industry, marked by escalating bankruptcy rates and strategic lobbying, underscores the challenges and opportunities within the sector. As regulatory pressures mount, companies are navigating financial hardships while seeking greater influence in policy-making circles.