Tech Brew Ride Home - Wed. 06/15 – Now The Crypto Hedge Funds Might Be Blowing Up

Episode Date: June 15, 2022

Is a major crypto hedge fund about to blow up? How the Celsius network got in such hot water. YouTube lets you make corrections. Why Apple’s deal for Major League Soccer is such a big deal. And pour one out, definitively, for Internet Explorer. Sponsors: LinkedIn.com/techmeme LCX.com/ride Links: After facing hundreds of millions of dollars in liquidations, Three Arrows Capital's future is uncertain (The Block) Crypto Lender Celsius Hires Restructuring Lawyers After Account Freeze (WSJ) Celsius bid to rival Wall St with crypto lending scuppered by risky bets (FT) YouTube’s new corrections feature lets creators fix the record more easily (The Verge) Nothing reveals Phone 1 design a month early (The Verge) Exclusive: New entry-level iPad to pack A14 chip, 5G, and USB-C connectivity (9to5Mac) Apple, Major League Soccer Strike 10-Year Streaming Deal for All MLS Games (WSJ) Microsoft to retire Internet Explorer browser and redirect users to Edge (The Guardian) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme right home for Wednesday, June 15th, 2022. I'm Brian McCullough. Today is a major crypto hedge fund about to blow up. How the Celsius network got in such hot water, YouTube lets you make corrections why Apple's deal for Major League Soccer is such a big deal and pour one out definitively. Finally, for Internet Explorer. Here's what you miss today in the world of tech.

Well, the contagion looks like it's spreading. are telling the block that crypto hedge fund three arrows capital faces an uncertain future after a $400 million liquidation. The CEO of the fund tweeted they are, quote, committed to working this out, which they would be, quoting, according to well-placed sources, the investment firm, which counts the likes of options exchange, Derribut and financial services firm BlockFi among its venture bets, is in the process of figuring out how to repay lenders and other counterparties after it was liquidated by top-tier lending firms in the space. Sources declined to share the names of those firms on the record for fear of reprisal,

but three people said the liquidation totaled at least $400 million. They added that the firm has maintained limited contact with its counterparties since being liquidated. The liquidation event is just one of several setbacks by the firm, which has backed projects like Avalanche, PolkaDOT, and Ether, which are all down 57%, 38.8% and 47% over the last 30 days respectively. The fund sustained significant losses during the collapse of the Terra ecosystem last month after investing heavily in its native token Luna. The firm, which reportedly managed approximately $10 billion at market peak by some estimates is led by former classmates Su Zhu and Kyle Davies.

Zhu, a co-founder and CEO of Three Arrow's Capital addressed rumors regarding the crypto investment firm's operations and solvency in a tweet Tuesday evening. Quote, we are in the process of communicating with relevant parties and are fully committed to working this out, he said. Representatives from Three Errors did not respond to messages seeking comment. Zhu, who up until a few weeks ago was a vocal crypto bull recently took to Twitter to admit that his supercycle bull case on the crypto market was, quote, regrettably wrong. Supercycle price thesis was regrettably wrong, but crypto will still thrive and change the world every day, he said at the end of May.

The super cycle was an idea pushed by Zhu that suggested the crypto market would gradually rise during this market cycle, avoiding a sustained bear market. In an interview on the Up Only podcast in February 2021, Zhu suggested that Bitcoin's price could go as high as $2.5 million per coin if Bitcoin were to capture the same market value as gold, end quote. By the way, sources also say that crypto lender Celsius networks is looking for financing, options from investors and exploring other strategic alternatives like financial restructuring, quoting the Wall Street Journal. Last week, Celsius told users that it was pausing all withdrawals,

swaps, and transfers between accounts because of extreme market volatility. Celsius is first looking for possible financing options from investors, but is also exploring other strategic alternatives, including a financial restructuring, one of the people familiar with the matter said. Celsius lends out customer deposits to other users to earn a return. The company managed $11.8 billion in assets as of May 17th, according to its website. It offers users annual percentage yields of up to 18.63% on cryptocurrency deposits. The company said it has 1.7 million users, end quote. I'll admit that I didn't know much about Celsius until this recent trouble, though.

I had heard plenty about these lending projects, promising yields, the likes of which the world hasn't seen since the days of the East India companies. but according to the Financial Times, while Celsius portrays itself as a simple company offering financial freedom, at the same time, it's been risky trades that have led to this current crisis. The group which was founded in 2017 rode the most recent crypto bull run to become one of the most prominent companies offering eye-popping yields of as much as 18% to customers who deposited their digital assets. Similar to how a bank counts deposits as liabilities, Celsius customers are unsecured. lenders, though in the lightly regulated crypto world, they have no government-backed insurance for their funds. Celsius deployed those deposits in loans to major crypto market makers and hedge funds, as well as into so-called decentralized finance projects. Several players in the market had a policy

of not extending credit to CELSIUS, even as they borrowed from it, according to people familiar with the matter. The final squeeze came in the past week with a severe liquidity mismatch CELCES had created. The company borrowed Ether, a major digital token, from users and then locked huge sums of the asset up for an indefinite period in a new version of the cryptocurrency that is under construction and has experienced delays. Locking ether in the new version earned rewards that would eventually be released. Celsius had locked the ether directly, but also through a service called Lido that issues a derivative of the locked ether known as staked Ethereum or STEath, steeth, which is meant to be easily tradable and treated as

as a one-to-one equivalent to ether itself. It used that Steeth as collateral for further borrowings, posting $450 million worth on a platform called Ave, according to public blockchain data. Holders of Steeth last week sold down the derivative over concerns about delays to the rollout of the new Ethereum network, the main digital ledger where ether trades. The sell-off has drained liquidity from the main trading pool for the derivative, leaving Celsius unable to swap. It's ST-Eth for ordinary ether to meet customer withdrawal requests without incurring huge losses, according to crypto analysts. Compounding the challenge is the threat that it could be forced to post additional collateral on Ave or be liquidated on its borrowings if the price of Steeth

continues to fall. Max Boonin, founder of the crypto broker B2C2, likened crypto lenders to banks that have to carefully match their assets and liabilities to remain solvent. Quote, banks have learned from past crises and are now pretty careful and sophisticated about their asset liability mismatches. It's a skill set, and I don't know to what extent the crypto lending market has learned it yet, he said, end quote. YouTube has launched a corrections feature, letting creators add info cards at a relevant timestamp if you want to make a correction, quoting the verge. Everyone makes mistakes, but if you mess up a fact or flub a line in a YouTube video, it can be hard to correct the error.

You can edit and re-upload the video, but that means losing all your comments and engagement metrics. You can add a note to the video's description or pin a comment with the correction, but that might go unnoticed by most viewers. That's why YouTube is introducing a new feature named corrections that lets creators easily add more obvious corrections. After a video has been uploaded, creators can add corrections that will appear as info cards, in the top right-hand corner of a video at the relevant timestamp, but only, it seems, for the first correction in any given video. Viewers can then click on the card to expand the correction notes in the video's description. The feature feels a little ad hoc, but it's still undoubtedly very useful.

YouTube shouldn't force creators to choose between amending the record and allowing their videos to perform the best they can, so any tool that helps them do both is welcome, end quote. The whole nothing company is one that I've not quite, quite decided on in terms of how seriously we should follow it. But I guess we're going to have an opportunity to assess that judgment soon because Nothing Founder Carl Pye has revealed the nothing phone won ahead of its July 12th launch event, saying leaks are harder to contain nowadays, quoting the Verge. As Pi previously confirmed to the verge in an interview, the phone has

illuminating light strips on the rear of the phone, which appears to be made from transparent material. The arrangement of these light strips was teased by nothing at a previous event. Interestingly, a logo can be seen on the center of the rear of the phone, which almost looks like the silhouette of a cartoon bomb. Other confirmed specs of the phone include a Qualcomm Snapdragon processor, wireless charging, and a modified version of Android branded as Nothing OS. No doubt, nothing plans to slowly reveal more details ahead of the phone's official announcement next month, end quote. I don't know why the Apple rumors are coming so fast and furious. recently, but sources are telling 9-to-5 Mac that Apple plans to refresh its entry-level iPad

with a USB-C port instead of lightning, an A-14 chip, 5G, and an improved display likely coming as soon as this year. Quote, the entry-level iPad, which is currently sold with prices starting at $329, is the most affordable iPad available in the lineup. Having USBC opens up a world of possibilities for iPad users as the connector supports faster transfer speeds and even a wider variety of peripherals, while the lightning connector is still based on the slower USB 2.0 standard, and relies on adapters for just about everything. With USBC, entry-level iPad users will also be able to easily connect it to more modern external displays, such as Apple's studio display. We have also heard from our sources that the new entry-level iPad will feature a retina display of the same

resolution as the iPad Airs display. The current 9th-generation iPad has a 10.2-inch LCD screen, so we can expect a slight screen increase to 10.5 inches or even 10.9 inches. However, more modern display specs, such as wide color gamut with DCIP3 and higher brightness, will remain exclusive to the more expensive iPads. At the same time, the 10th generation iPad is expected to be equipped with the A14 bionic chip, the same as the fourth generation iPad Air. Compared to the A13 bionic, which is used in the current entry-level iPad, the performance gains should be around 30%. Apple will also add 5G network support for cellular models. Unfortunately, we have no details on whether the new 10th generation iPad will stick with the same

old design, or whether Apple will move to a more modern design matching iPad Air, iPad Mini, and iPad Pro. But based on what we know about the new display and connector, the design change seems likely, end quote. Not a rumor, but a fact. Apple and Major League Soccer have announced a 10-year broadcasting deal running from 23 to 2032, with games available via MLS's Apple TV app or Apple TV Plus. Sources say the deal is worth more than $250 million a year. Now, y'all know that I love soccer, but even though I do root fervently for the U.S.

national teams, I have to cop to never really getting down with Major League soccer. European football is more my bag, but this deal is worth noting for the simple, stunning fact of the size of the investment Apple is making here. Basically, it's going to own the rights to an entire sport for a decade and paying handsomely to do that. In essence, I've been waiting for something like this to happen, as we've said many times on the show. Shouldn't most major sports be existing inside of apps and on a subscription model, either of their own creation or in participation with some of these major platforms by the end of this decade? Seems likely to me, quoting the journal. The 10-year agreement unveiled Tuesday will make the Apple TV app the home of all.

all MLS matches available to fans through a variety of programming options. While financial terms for the deal weren't announced, the agreement is worth a minimum of $250 million a year, according to a person familiar with details. The agreement makes MLS the most significant American Sports League to move all of its games to a streaming service rather than the bulk of games appearing on cable or broadcast TV. From early 2023 through 2032, fans will access matches by subscribing to a new MLS streaming service available only through the Apple TV app. The price for the service wasn't disclosed. A broad selection of matches in MLS and Leagues Cup, an annual competition between

MLS and Liga MX clubs, will be available to subscribers to Apple TV Plus, a premium service for which Apple charges a $4.99 per month monthly fee. A limited number of matches will be available free on Apple TV, which can be accessed by anyone with internet access. The deal encompasses global broadcast rates, an unusual step, sports leagues typically sell the broadcast or streaming rights to their games by country or region. Increasingly, sports content appears to be a key strategy for many services to bolster content. However, in the streaming era, increasingly, sports content appears to be a key strategy for many services to bolster content. Sports leagues are embracing the battle for online viewership and the potential for capturing younger fans,

while traditional TV viewership has struggled. Despite the entire MLS, schedule being available via Apple under the agreement, the league will also pursue linear TV deals to simulcast a limited number of games, a move Apple apparently supports. MLS could earn more than the Apple deals minimum under a revenue sharing mechanism that would kick in if unspecified metrics related to the MLS subscription service are reached. MLS season ticket account holders will receive access to the service at no additional charge. Although MLS has inspired large, rabid crowds inside stadiums, it lags behind larger league. in traditional TV ratings. December's MLS Cup final between the Portland Timbers and New York City

FC drew 1.1 million viewers on ABC, end quote. But Apple's Eddie Q said of this deal, it's a partnership. It's not a rights deal. In general, we're interested in growing the game first and foremost, end quote. Finally today, Microsoft officially retired Internet Explorer after 27 years, disabling the desktop app and directing users to Edge. voting the Guardian. Internet Explorer was the gateway to the internet for people born prior to Generation Z in an era when Microsoft dominated the tech world before Google, Facebook, and TikTok, and when the browser had to be installed onto computers using a CD-ROM. Microsoft's market domination came about due to its bundling of the software as part of the Windows operating

system. The experience was often sluggish, and when faster competition arrived with Mozilla's Firefox and later Google Chrome, people jumped ship in droves. Although market-dominant Chrome suffers from the same issues that plagued Internet Explorer, a shift away from the need to support the legacy browser will be a relief for web developers. There's a good chance you haven't used Internet Explorer in many years or ever. Microsoft has been nudging people away from it in favor of the Edge Browser, which was launched in 2015 and is built on Google's Open Source Chromium. If there is a Relic website that still requires Internet Explorer in order to open it, people using the Edge Browser will be able to run it in IE mode, end quote. Not to plug my book,

or the Internet History podcast episodes we did on Internet Explorer, but it's hard to overstate how the initial success and then eventual decline of I.E., due to shocking neglect of the platform on Microsoft's part, got us the internet we have today. Maybe more on this in a Twitter space soon.

Nothing for you again today. Talk to you tomorrow.