Here’s What You Missed in Crypto This Week

As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week’s top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.

NY AG SUES CRYPTO COMPANIES FOR FRAUD: New York Attorney General Letitia James announced Thursday the filing a sweeping lawsuit against cryptocurrency companies Gemini Trust Company, Genesis Global Capital and its affiliates, and Digital Currency Group for defrauding more than 230,000 investors, including at least 29,000 New Yorkers, of more than $1B. An investigation by the Office of the Attorney General found that Gemini lied to investors about an investment program it ran with Genesis called Gemini Earn. Gemini repeatedly assured investors that investing with Genesis through their Gemini Earn program was a low-risk investment. However, OAG’s investigation found that Gemini’s internal analyses of Genesis showed that the company’s financials were risky. The lawsuit alleges that Gemini knew Genesis’ loans were undersecured and at one point highly concentrated with one entity, Sam Bankman-Fried’s Alameda, but did not reveal this information to investors. The lawsuit also charges Genesis, its former CEO Soichiro Moro, its parent company, DCG, and DCG’s CEO Barry Silbert with defrauding investors and the public by trying to conceal more than $1.1B losses, which were borne by investors. As a result of these misleading claims and deceptions, thousands of investors lost millions of dollars and, in some instances, lost their lifesavings. Through this lawsuit, Attorney General James seeks to ban Gemini, Genesis, and DCG from the financial investment industry in New York, and seeks restitution for investors and disgorgement of ill-gotten gains. (read more)

MINER PRICE TARGETS LOWERED: Compass Point lowered the firm’s price target on Marathon Digital (MARA) on Wednesday to $12 from $20 and kept a Buy rating on the shares. The firm expects bitcoin prices to average $29,000 in Q4, exiting at $30,000 versus its prior estimate of $35,000. Compass sees average prices of $50,500 in 2024, down from $58,000 prior, exiting the year at $75,000. The decrease in 2024 is driven by expectations that higher interest rates for longer will dampen upside for all risk assets, including bitcoin, the analyst said. Compass increased its global hash rate outlook materially given the persistence of global hash rate growth in recent months despite bitcoin prices staying relatively range bound. Overall, the changes reduce the firm’s estimates and price targets for most miners in its coverage. (read more)

The firm also lowered its price targets on Iris Energy (IREN) to $14 from $24 (read more), on Riot Platforms (RIOT) to $14 from $21 (read more), on Bitfarms (BITF) to $3.50 from $5 (read more), on Stronghold Digital Mining (SDIG) to $13 from $23.50 (read more) and on Argo Blockchain (ARBK) to $2.50 from $2.75 (read more). The analyst kept a Buy rating on all the names.

TERAWULF INITIATED WITH BUY: Stifel analyst Bill Papanastasiou initiated coverage of TeraWulf (WULF) on Tuesday with a Buy rating and $3 price target. TeraWulf represents one of the most attractive public bitcoin operators on the basis that it mines at one of the lowest marginal costs, using predominantly zero-carbon energy sources, and manages a highly efficient fleet of the latest generation equipment, the analyst said. Stifel expects the company to pay down a substantial amount of its outstanding term loan organically. (read more)

MAWSON ENTERS COLOCATION AGREEMENT: Mawson Infrastructure Group (MIGI) announced Thursday that a customer co-location agreement has been signed between a subsidiary of Mawson and a subsidiary of Consensus Technology Group for Mawson to provide Consensus with co-location services for approximately 15,876 Bitmain Antminer S19 XP miners or approximately 50 MW at Mawson’s Midland, Pennsylvania facilities. The customer co-location agreement includes Consensus providing approximately 15,876 Bitmain Antminer S19 XP mining machines capable of hashing at about 141 EH/s, while Mawson will pass through the power costs to the customer along with co-location service fees per MWh, as well as other fees and charges. The agreement provides for Mawson to provide co-location services to Consensus for 12 months and the parties can extend further upon mutual agreement. With the addition of this co-location customer, Mawson anticipates its Midland facilities operating at a capacity of 100 MW and the combined self-mining and co-location fleets at its Midland facilities are expected to comprise of approximately 32,930 miners. (read more)

CRYPTO STOCK PLAYS: Publicly traded companies in the space include Bit Digital (BTBT), Coinbase (COIN), Core Scientific (CORZ), Greenidge Generation (GREE), Marathon Digital, MicroStrategy (MSTR), Riot Platforms, Stronghold Digital Mining and TeraWulf.

PRICE ACTION: As of time of writing, bitcoin rose roughly 10% this week to $29.615 in U.S. dollars, according to CoinDesk.