Authorities in Egypt recently allowed the local currency’s exchange rate versus the U.S. dollar to decrease by more than 60%. Additionally, the central bank raised interest rates by 600 basis points. Both steps were key conditions set by the IMF which Egypt had to meet before the approval of a new financial aid package. IMF […]
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FTX bankruptcy estate intends to sell its $175 million general unsecured claim against the collapsed crypto lender Genesis, according to a Feb. 2 court filing.
FTX proposed to divest these claims through public auctions or private transactions, either in entirety or in parts, with single or multiple purchasers. The generated funds would be used to facilitate debt repayment and also restructure its financial obligations to creditors.
This development aligns with FTX’s recent commitment to not resurrecting the platform, opting to liquidate assets as part of the ongoing efforts to compensate customers affected by its 2022 collapse.
Data from Claims Market showed that over $1 million in customer claims were trading at over 65 cents on the dollar as of the end of January.
FTX creditors have until Feb. 15 to voice objections to this proposed claim sale.
Genesis filed for Chapter 11 bankruptcy protection in January after the failure of FTX triggered mass customer withdrawals on its platform.
Genesis and FTX, initially engaged in substantial reciprocal claims, eventually settled with the failed exchange, holding a $175 million claim against the collapsed lender. Under the settlement agreement, both parties also relinquished other claims held against each other. Genesis Global Capital, the crypto lending arm of Genesis, had previously extended loans exceeding $2.8 billion to Alameda.
A recent court filing revealed that Genesis reached a $21 million settlement with the U.S. Securities and Exchange Commission (SEC) concerning the now-defunct Gemini Earn investment product.
“The proposed settlement will, among other benefits to the Debtors’ estates, resolve the Civil Action Claim filed by the SEC in these Chapter 11 Cases and eliminate the risks, expenses, and uncertainty associated with protracted litigation against the SEC,” the filing stated.
The filing further explained that the $21 million settlement would be disbursed after Genesis fully pays “all other allowed administrative expense, secured, priority, and general unsecured claims.”
The SEC had alleged that Gemini and Genesis violated U.S. securities laws through the crypto lending program.
Meanwhile, the company is still embroiled in a lawsuit filed by the New York Attorney General, which also involves DCG and Gemini, over allegations of fraud.
President Joe Biden and Ukrainian President Volodymyr Zelensky on Tuesday pushed a divided Congress to make a deal on more aid for the Eastern European nation, but analysts and some lawmakers forecast that weeks more of talks look likely.
Biden and his fellow Democrats, along with Zelensky, want congressional approval for additional Ukraine assistance before U.S. lawmakers take a break for the holidays, but Republicans won’t sign off until they get support for their demands related to U.S. border security, such as stricter rules for asylum.
Republicans “cannot go back to our constituents, with close to 10 million illegal entries in the last three years, and say that we got nothing out of border negotiations,” said GOP Sen. J.D. Vance of Ohio on Tuesday during the WSJ CEO Council Summit, an event in Washington, D.C. Vance added that he sees potential for a deal “if the president is actually willing to make one.”
Biden, for his part, said he’s “ready and offering compromise already,” but the president criticized what he described as an “extreme Republican partisan agenda on the border.”
“Ukraine will emerge from this war, proud, free and firmly rooted in the West. Unless we walk away” the president said during a joint news conference with Zelensky following their meeting in the Oval Office. Their events together come as the Republican-run House and Democratic-controlled Senate are slated to go on recess after this week.
Senate Minority Leader Mitch McConnell told reporters on Tuesday that it’s “practically impossible,” even if Congress reaches an agreement, to “craft it, get it through the Senate, get it through the House before Christmas,” though that “doesn’t mean it’s not important.” The Kentucky Republican noted that House Speaker Mike Johnson, a Louisiana Republican, has “said to a number of people they’re leaving at the end of the week.”
Some analysts have been eyeing January as the time when a deal could be made.
“We continue to believe there is a deal to be had here, but our sense is that the debate will slip into the new year as there is no clear legislative forcing mechanism and the path of least resistance is leaving town for the holidays,” said Isaac Boltansky, a BTIG analyst, in a note.
Meanwhile, another analyst, Pangaea Policy founder Terry Haines, has said in a note that an aid-and-border package can be finished by year’s end, but he’s cut his chances for it to 60%, down from 70% last week. He also said there are “three more weeks, until the end of the calendar year, to do this, not the one week the Washington conventional wisdom bandies about.”
Biden is seeking $61 billion for Ukraine as the country continues to resist Russia’s invasion, and the request is part of a $110 billion package that also includes money for Israel.
“It’s very important that by the end of this year, we can send a very strong signal of our unity to the aggressor,” Zelensky said during the joint news conference.
Crypto Aid Israel, an emergency relief fund created to support Israeli victims of Hamas terrorism, has received over $185,000 in donations despite suffering a phishing attack.
In an Oct. 19 statement shared with CryptoSlate, Crypto Aid Israel said it had completed two rounds of aid distribution of 200,000 NIS, around $49,000, to various organizations spearheading the relief efforts in the region.
Some of the beneficiaries of the donations include the Foundation for Advancing Citizens of Eshkol Regional Council, Zaka, Latet, and Lev Echad. They are spending the funds on search and rescue movements, securing medical equipment, and providing essential provisions like food and transportation for needy citizens.
Eyal Gura, the New Digital Initiatives advisor to Latet’s board, said:
“The crypto channel is an important, speedy and innovative one and will enable new contributors to join our global ecosystem and support Israel in such an important hour.”
However, the initiative has faced challenges, including a “serious phishing attack” and “a brief disruption” that lasted 30 minutes to its website. It was unclear if any funds were lost to these incidents.
Meanwhile, the initiative revealed it has enjoyed support from more than 30 companies, including accounting giant KPMG, crypto wallet provider Zengo, and Fuse, helping it raise awareness and financial contributions for its cause.
Crypto Aid Israel is a collective led by influential leaders within the Israeli cryptocurrency community. The collective includes organizations like 42Studio, MarketAcross, Collider Ventures, CryptoJungle, Nilos, BlockchainB7, Efficient Frontier, Ironblocks, Israel Blockchain Association, Bits Of Gold and KPMG.
The Aid was launched following a terrorist attack from Hamas on Israelis, resulting in the loss of properties and lives. Critics of the crypto industry highlighted its role in funding such incidents, prompting a broader discussion on the regulation and transparency of digital assets.
As a result, regulators worldwide are clamping down on Hamas’s financial resources. For context, the U.S. government recently sanctioned a Gaza-based crypto broker, Buy Cash, and its operator, Ahmed M. M. Alaqad, for facilitating crypto transactions for Hamas.
Got a question about the mechanics of investing, how it fits into your overall financial plan and what strategies can help you make the most out of your money? You can write me at beth.pinsker@marketwatch.com.
Dear Fix My Portfolio,
I make $75,000 a year and have two teenagers who will be heading to college soon. I have saved a little, but I was counting on getting a lot of help with financial aid. The thing is, my mom just died and I’m about to inherit some money — more than $250,000 — and it’s going to land in my account just about when we’re filling out the FAFSA for my oldest in the fall. To make matters more complicated, I’m divorced. My ex makes about the same as me, and doesn’t have much savings. I have the majority of custody and pay most of the bills.
I know I should feel lucky to receive an inheritance, but I feel sad about my mom and now it’s making me worried that college is going to be very, very expensive. Is there a way for me to receive this money and hide it, so it doesn’t just go straight to paying tuition? I wanted to have a little left over for helping with my mortgage and my own retirement. The money is coming in cash, not an IRA or anything.
—CG
Dear CG,
I’m very sorry for your loss. Inheritances come with all sorts of tricky feelings, and sometimes they create financial complications rather than solving them. This situation actually happens in a lot of families. Financial adviser Beth V. Walker, author of “Never Pay Retail for College,” says she sees this scenario with inheritances impacting financial aid about twice a year in her practice.
She helped one family a few years ago where the father died right before the daughter went to college and she got a life insurance settlement. “She was headed toward an almost full need-based award, but then she got $350,000 and college was suddenly going to be full-pay that year,” says Walker. “When you’re in that situation, you have to take action to protect it.”
What does that look like? You have a couple of choices.
One avenue to consider is to spend down the amount you inherit before the financial-aid forms are due. “You could pay off debt,” says Paul Sydlansky, a certified financial planner with Lake Road Advisers in upstate New York and member of the Wealthramp network of advisers. “Let’s say you have a car loan, a mortgage, maybe even the parents have their own student debt.” Pay that all down before the forms are due, and it helps the issue. That also goes if you have any large purchases you were planning, like a vacation or a home renovation.
But take into consideration that the financial aid formula doesn’t just automatically expect you to spend every penny you have on hand. “You have to think about how much it is really going to impact the financial aid numbers,” says Sydlansky.
The financial aid algorithm puts the most weight on parental income, and if that hasn’t changed despite the inheritance, then the bulk of your tuition bill will be based on that. Colleges generally value parental savings and investments at 5.6%, which means if you tell them you have $250,000 in savings, they’d expect you to use about $14,000 of it a year toward tuition.
When you’re divorced, the federal FAFSA form only counts the income and assets of the parent who pays the majority of the expenses, starting next year, so that would have to be you. For private colleges that use the CSS Profile, both divorced parents have to submit.
So that’s not such bad news, and doesn’t require any subterfuge. If you put your full inheritance in your bank account, and accurately note it on the forms for the 2024-2025 school year, which will open in December 2023, you might still possibly get some financial aid. That’s especially true if you write a letter of explanation to the financial-aid office explaining that your savings have been bolstered temporarily by a one-time inheritance and your overall financial situation has not changed otherwise.
“You disclose the windfall and then go through the windfall appeals process. I see that often,” Walker says.
If you don’t get what you think you need just from need-based aid, you can always look for colleges that will charge you less based on the merit of your child. This is where Walker and Sydlansky help clients strategize the most, because their typical clients are higher income, but they still need to look for breaks off colleges that list at $80,000-plus per year. For high-school seniors, the choice of where to apply really matters, and advisers can crunch the data based on each family’s financial picture.
“It allows you to compare apples to apples when it comes to cost and aid,” says Sydlansky.
If you can come up with a college choice for your child that gets them merit aid, then you won’t have to worry about the impact of the inheritance. For clients, Sydlansky runs the numbers on what various colleges are likely to cost using subscription-based professional software. If you’re doing this on your own, you can use the federal student aid estimator to see what FAFSA schools might charge you. For private colleges that use the more complicated and opaque CSS Profile to determine awards, you need to go to each college’s website and run their net price calculator using different asset amounts to see how your bill might be impacted.
You won’t really know, however, until you hear directly from the financial-aid office and see what other scholarship are available that are not dependent on your finances.
If none of this appeals to you, and you think that your inheritance will push the cost of college past your limits, you can try some strategies that advisers use for very large inheritances. For some families, Walker has suggested investing inheritances into retirement and insurance accounts that don’t count toward the financial aid formula. When you’re inheriting cash, it’s not possible to put large sums into an IRA or other qualified retirement plans, but you can invest in annuities and life insurance products, even into specialized life insurance products called modified endowment contracts.
Walker helped one family where a grandparent died and the family invested the inheritance in a universal life insurance policy. But the rules are complicated so, Walker says, “you want to work with somebody who knows how to design them and minimize payday to agent and cash to client.”
When it comes down to it, you may well decide that trying to exclude your inheritance from the financial aid formula may not be worth the effort and it’s best just to use the funds to pay for education costs. “I’m not a fan of whole life or universal life as an investment vehicle,” says Sydlansky. “The fees are hard to understand and it’s designed to protect you, not make money on it.”