13 May

“Treasury Secretary Janet Yellen told members of Congress on Thursday that she doesn’t believe the crypto market has grown to a scale that it poses a “systemic risk”—a designation that can trigger a raft of new regulatory measures.

I can’t say [stablecoins] have reached a scale where they’re financial stability concerns.

The Treasury Secretary, in response to a question from Rep. Himes, also stated she was aware of the distinction between algorithmic stablecoins like UST (which rely on financial incentives to preserve their peg to the dollar) and other stablecoins that are backed by a reserve of dollars.

Following the 2008 crisis, Congress introduced legislation that recognized certain large financial entities—including banks and insurer AIG—as posing a “systemic risk” to the U.S. economy, and imposed a series of oversights, including higher capital reserves, on their business operations.”

See Also: Global Crypto Regulatory Body Is Coming Soon, Says Top Official

LUNA currently sits at a price of just over $0.01 per coin, a precipitous fall from a price point of over $81 just one week ago. That’s a 99.99% fall. Given how dramatically the price of the LUNA governance token has fallen, the blockchain network rapidly became much more susceptible to attackers.

Validators decided to halt the Terra chain to prevent governance attacks following severe $LUNA inflation and a significantly reduced cost of attack.

Terra developers announced roughly an hour and half later that the blockchain had resumed block production, albeit with staking on the network disabled.

Earlier today, Terraform Labs—the creators of LUNA and UST—unveiled a series of steps aimed at salvaging the Terra ecosystem. Terraform Labs said that it would burn (or effectively destroy) any remaining UST in the community pool, as well as burn any UST that is running on Ethereum, and stake $240 million worth of LUNA to avoid potential governance attacks.

Crypto industry observers and insiders offered widely negative takes on the announcement.

Their plan is to let hyperinflation of Luna dissolve the bad UST debt, but the chain security of Luna goes down as hyperinflation reduces its price. It’s the 89th minute, they are losing 432-0 and have run off with the ball.”

See Also: Terraform Labs Launches 3 Emergency Actions to Save LUNA, UST Stablecoin
See Also: Citadel Securities, BlackRock, Gemini Slam Social Media Accusations of Involvement With UST Collapse
See Also: Binance will delist LUNA/USDT contracts as price falls below 0.005

“Tether (USDT), the world’s largest stablecoin, briefly dropped 5% on Thursday, falling as low as $0.95. The stablecoin has recovered some but is still trading at $0.98, according to data from CoinMarketCap. Paolo Ardoino, CTO of Tether and Bitfinex, explained that the volatility was “pure market dynamics.”

On Bitfinex the Tether peg is [greater than] $1 while on Kraken it is slightly lower than $1. This has resulted in arbitragers buying USDT cheap on Kraken and selling it on Bitfinex for profit. All this is pure market dynamics and has absolutely nothing to do with the value of Tether which continues to hold its peg.

USDT and UST are two different types of stablecoins. UST is an algorithmic stablecoin controlled by smart contracts, and USDT is backed by Tether’s reserves.

Bitcoin experienced a sharp decline toward $25,402 on Thursday. The cryptocurrency stabilized later in the New York trading day, but is still down by 20% over the past week. The underperformance of ETH relative to BTC typically signals risk-off conditions.

Wild price swings have been the norm over the past few months, which left many alternative cryptos (altcoins) vulnerable to extreme selling pressure. Solana’s SOL token is down by 46% over the past week, compared with a 30% decline in ether (ETH) over the same period.

Meanwhile, on Thursday, the price of the Terra blockchain’s token LUNA plunged below 2 cents. The sharp price move made the network vulnerable to governance attacks, which triggered a brief shutdown of the blockchain, which meant no transactions with the algorithmic stablecoin UST, LUNA or Terra’s other cryptocurrencies could be processed.”

XP (XP), the largest Brazilian brokerage by market value, plans to launch a crypto trading platform by the end of June. XP’s new feature will allow 3,5 million users to buy and sell bitcoin (BTC) and ether (ETH).

XP is listed on the Nasdaq and has a market cap of $10.8 billion. The company offers financial advisory services and more than 800 investment products. On Wednesday, the largest Brazilian digital bank, Nubank, added the option for customers to buy and sell bitcoin and ether on its platform.”

“Blue Studios said Thursday it is launching Wallio, a non-custodial family crypto wallet. The goal of the shared wallet is to promote “multigenerational diversity” through a product that comes with tools to educate children and grandparents alike.

Families who sign up for Wallio ahead of its third quarter launch will be able to create a shared crypto wallet to deposit and receive digital assets. One family member will set up a profile and can add up to six additional accounts for the other family members. Carter said the tie up with Unstoppable Domains lets family members create individual addresses with a name rather than a sequence of numbers.

Blue Studios will implement its play-to-earn and learn-to-earn technologies, where families can play games and complete modules to earn ether (ETH). The Family DAO will allow families to create a governance token for members to vote on measures pertaining to the wallet.

Bankless: UST Luna Collapse