Unchained 'The Last Big Whale': Why the Crypto Contagion of 2022 Eventually Hit Genesis - Ep. 426
Nov 29, 2022
Michael Jordan, founder at DBA and former co-head of investments at Galaxy Digital, joins Alex Pack, managing partner at Hack VC, to discuss the troubling prospects of Genesis and its parent company, DCG. They dive into the roots of Genesis's insolvency and how the 2021 crypto lending boom contributed to today’s challenges. The duo delves into the catalytic collapse of Terra and its ripple effects across the space. They share insights on assessing collateral quality and ponder how to avert future crises akin to FTX.
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Crypto Credit Expansion and Risk
- The 2021 crypto market saw a massive credit expansion, particularly in lending.
- Less scrupulous lenders offering undercollateralized loans forced established players to take on more risk.
Do Kwon's Actions and Terra's Downfall
- Do Kwon's actions of selling UST for Bitcoin to back the stablecoin triggered its de-pegging.
- This specific transaction initiated the downfall of Terra and contributed to the subsequent market crisis.
Alameda Research Due Diligence
- Alex Pack considered investing in Alameda Research in 2018.
- Due diligence revealed red flags like hidden losses and ambiguity about fund allocation.