21 June

The U.K. government will not implement its proposed version of a controversial rule requiring all senders of funds to private crypto wallets to collect identification details of recipients. Based on the feedback received, the Treasury does not think it would make sense to create a data collection rule for unhosted, or private, wallets.

Instead of requiring the collection of beneficiary and originator information for all unhosted wallet transfers, cryptoasset businesses will only be expected to collect this information for transactions identified as posing an elevated risk of illicit finance.”

BnkToTheFuture co-founder Simon Dixon has proposed a recovery plan similar to the solution offered to Bitfinex after its Bitcoin hack in August 2016 – allowing customers to be compensated for their losses through tokens tied to the platform’s recovery.

I believe traditional finance will not have a timely solution for Celsius as we saw in the past with Mt. Gox that still remains unresolved 10 years later. I believe that this can only be solved with a solution using financial innovation like we did with Bitfinex that was resolved within 9 months and worked out very well for depositors.

Rather than pursuing liquidation proceedings, Bitfinex instead came up with an innovative recovery plan, which involved “promises to repay” in the form of BFX tokens to customers, representing the value of the money lost in the hack. These tokens were tradable on the open market or could be held later for future repayment of $1 per token, and effectively allowed customers to speculate on the company’s recovery.

However, there’s also an unofficial community-led recovery plan which appears to be gaining traction on Twitter under the hashtag #CELShortSqueeze. The movement is attempting to force short-sellers of the Celsius token to cover their short positions by purposefully driving up the price of the CEL token through the mass purchase and withdrawals of the CEL token from various exchanges.”

See Also: Babel Finance Reaches Debt Agreement With Counterparties After Withdrawal Freeze
See Also: Hong Kong’s Hoo.com Expects to Re-Open Some Token Withdrawals Today; Finblox Takes Steps to Address Liquidity

Investors exited bitcoin (BTC) positions worth a record $7.3 billion over the past few days, amounting to the biggest U.S. dollar denominated losses in the asset’s history. Approximately 555,000 BTC have changed hands between prices of $18,000 and $23,000. In broader futures markets, bitcoin futures racked up some $436 million in liquidations over the past three days.

Such liquidations could have contributed to bitcoin falling to under $20,000 over the weekend. Bitcoin fell to as low as $18,319 a coin while its market capitalization slumped to about $350 billion, a 73% decline from its November all-time high. Bitcoin saw resistance at $21,000 on Monday morning after a relief rally.

Glassnode analysts said data at current price levels suggested a market bottom. ‘We can see that as prices hit the $17,000 lows [Sunday], just 49% of the $BTC supply was in profit. Historical bear markets have bottomed and consolidated with between 40% and 50% of supply in profit.’

However, traders remain cautious with some stating that macroeconomic conditions must improve and the Fed’s aggressive approach to monetary policy should subside before crypto markets see a bottom.”

See Also: Bitcoin futures enter backwardation for the first time in a year
See Also: ProShares Launches First ETF to Short Bitcoin

“Layer-2 scaling solution Synthetix recently collaborated with liquidity provider Curve Finance to create Curve pools for sETH/ETH, sBTC/BTC, & sUSD/3CRV, allowing investors to cheaply convert synths such as sETH to Ether (ETH).

Synthetix created a buzz across the crypto ecosystem after witnessing a sudden increase in trading activities and an unprecedented comeback of its in-house token, SNX, during an unforgiving bear market. The protocol racked up over $1.02 million in trading fees — overshadowing Bitcoin’s (BTC) daily performance by five times.”

See Also: Bancor pauses impermanent loss protection citing ‘hostile’ market conditions

ETH2: Mev-boost for Validators

The Disrupt Weekend

  1. Obol Network – Distributed Validator Technology (DVT)
  2. LI.FI – L2 Bridge & DEX aggregator aggregator
  3. Voltz – Internet Rate Swap AMM
  4. Tracer – Derivatives Meta-Protocol
  5. Blocknative – Real-Time Infrastructure for the Pre-Chain Layer
  6. Euler – Governance-Minimized Money Market
  7. Aztec Network – Privacy-focused Layer 2
  8. Disco.xyz – The Off-Chain Internet

Users of Solana-based borrowing and lending service Solend voted Sunday to force a takeover of the protocol’s largest account: a “whale” whose “extremely large margin position” was getting, according to Solend contributors, dangerously close to a catastrophic on-chain liquidation cliff.

The unprecedented governance vote will grant Solend Labs “emergency powers” to liquidate the whale’s vulnerable assets (around $20 million in SOL) via over-the-counter (OTC) trades. Solend Labs said on-chain liquidation of the whale’s position “could cause chaos” in Solana’s DeFi markets.

But it also usurps entirely the smart contract–coded protocol Solend programmatically follows for every other borrower liquidation.”

See Also: Voyager Digital Secures Loans From Alameda to Safeguard Its Assets

See Also: SBF: Three Arrows Crisis ‘Couldn’t Have Happened’ with Transparent On-Chain DeFi
See Also: BIS to launch market intelligence platform amid stablecoin, DeFi collapse
See Also: How Crypto Lender Celsius Overheated

A blockchain transaction that contributed to the collapse of Terra’s UST stablecoin has been linked by a South Korean analysis firm to the ecosystem’s chief developer, Terraform Labs. Uppsala, in its report, did not venture to provide a possible motive or rationale for the transaction, and officials with Terraform Labs did not reply to requests for comment. The findings have been shared with legal authorities in South Korea.

Blockchain data shows Wallet A swapped over 85 million UST for another dollar-linked stablecoin, USDC, on May 7 – just minutes after Terraform removed over 150 million UST from a liquidity pool on the lending platform Curve in a planned move. Prices of UST fell under $1 almost immediately following these trades, which Uppsala said was a result of the lower liquidity on the Curve pool. Meanwhile, Wallet A’s newly-acquired USDC was sent to Coinbase.

It means that Terraform Labs or LFG made a financial transaction that caused Terra to collapse on its own.”

See Also: Convicted Felon Anna Sorokin is Launching an NFT Collection

“Crypto has actually gone through multiple boom/bust cycles in its relatively short existence; in the last cycle the price of Bitcoin fell 85% from its peak, before rising ~20x in the next cycle. All along the way there have been skeptics calling cryptocurrency a ‘scam’ and ‘dangerous’.

The price of Bitcoin is now down ~70% from its most recent peak. And, almost on cue, the crypto grave-dancers (like Bill Gates) are now insisting that they were right for predicting its demise. If history is any guide, this is pretty foolish. As 99Bitcoins.com tracks, there have been (at least) 453 declarations of the death of Bitcoin since 2010.

The fact that a technology attracts manic boom/bust capital is no reflection on the technology itself. It is a reflection on the market’s tendency towards irrationality. This was the case with bicycles and the Internet. And it will most likely be the case with crypto.

There will be plenty of crypto businesses, and many tokens themselves, that will (and should) go bust. But there are still plenty of great projects and great ideas out there– most notably, the fundamental idea of having a decentralized financial system.

Our traditional financial system, dominated by clueless politicians and out of touch central bankers, has been a total disaster. It is responsible for the record-high debt and record-high inflation which are disrupting the lives of literally billions of people.

Given these conditions, the decentralized financial system that cryptocurrency represents makes more sense than ever. And the fact that Bitcoin is going through another ‘down phase’ in the market cycle bears absolutely no relevance to its value whatsoever.

History is almost invariably on the side of innovation. And there’s still an abundance of innovation in crypto.”

See Also: Crypto Market Tumbles as Bitcoin Breaks Previous Cycle’s Highs

Loss harvesting, also known as tax-loss harvesting or tax-loss selling is an investment strategy where investors either sell, swap, spend or even gift an asset that has fallen into the red — also known as making a “disposal” — allowing them to “realize a loss.” Investors typically do it in the final weeks of the tax year. In the crypto world, a loss can be realized by converting it to fiat or just trading for another crypto token on the exchange.

Most people are familiar with the concept of tax on gains. But, what they’re not doing is realizing that they can recognize that loss on their tax return to then offset against gains.”

18 June

“Bitcoin (BTC) has tumbled 23% since Sunday, heading for its worst weekly performance since May 2021. As of press time the largest cryptocurrency was changing hands just around $20,500. The price has declined 56% year-to-date.”

“Beleaguered cryptocurrency fund Three Arrows Capital (3AC) confirmed Friday it had suffered heavy losses in the recent market downturn and said it had hired legal and financial advisors to figure a way out. 3AC is exploring options including asset sales and a rescue by another firm and hopes to reach a settlement with creditors, Davies said.

The fund had over $3 billion worth of cryptocurrencies under management as of April. Davies added that 3AC was working on quantifying its losses and valuing its illiquid assets, which include many venture-capital investments in crypto startups.

We are committed to working things out and finding an equitable solution for all our constituents. The Terra-Luna situation caught us very much off guard.

Law firm Solitaire LLP, which is advising 3AC, told the WSJ that it was keeping Singapore’s financial regulator, the Monetary Authority of Singapore, apprised of 3AC’s recent developments.”

See Also: Genesis Trading Mitigated Losses With a ‘Large Counterparty,’ CEO Says

“Caisse de dépôt et placement du Québec, a major Canadian pension fund, and the New York-based WestCap Group led Celsius’ oversubscribed $750 million Series B funding round last year, which raised the firm’s valuation to $3.5 billion. However, neither of them is reportedly willing to provide additional funds to Celsius.

Investors are willing to either stand back, or let another company try to buy Celsius. Another possible option on the table is to simply let the business restructure; earlier this week, Celsius reportedly hired restructuring attorneys.

There was more risk in this than fully appreciated.

Securities regulators in five states have opened investigations into Celsius’ decision to freeze withdrawals.”

See Also: Lido Finance Warns Leverage Is a ‘Hell of a Drug’
See Also: Maker cuts off exposure to Aave’s stETH supply as fallout from Celsius continues

Hong Kong-based crypto lender Babel Finance has suspended withdrawals and redemptions. ‘Babel Finance is facing unusual liquidity pressures,’ the statement reads, before alluding to major fluctuations in the market and ‘conductive risk events‘ among institutional market participants.

At the end of 2021, Babel Finance had an outstanding loan balance of over $3 billion, up from $2 billion the previous February. It averaged $800 million in monthly derivatives trading volume and had structured and traded over $20 billion in options products.

On Thursday, rival staking platform Finblox made a similar decision, restricting withdrawals to $1,500 per month due to its connection with Three Arrows Capital.”

Immutable said the fund will collaborate with crypto and gaming investors including BITKRAFT, Animoca, Arrington Capital, Double Peak, Airtree, King River Capital and GameStop. Immutable Ventures has invested in Web3 companies and NFT startups including Starkware, Stardust, PlanetQuest and Topology.

Earlier this year, GameStop partnered with Immutable X for the launch of its NFT marketplace. Some of the names already building on Immutable include GameStop, TikTok, Opensea, Ember Sword and more.”

17 June

“Timmer explained that while Bitcoin has fallen back to 2020 levels, its price-to-network ratio has reeled all the way back to 2013 and 2017 levels, which he said may indicate it is undervalued. The macro analyst also shared a graph making use of Glassnode’s dormancy flow indicator, which he said suggests ‘how technically oversold Bitcoin is.’

The price-to-network ratio is a crypto-riff on a popular metric used by traditional stock market investors called the price-to-earnings (P/E) ratio, which is used to determine whether a stock is over or undervalued.

Morgan Creek Digital co-founder Anthony Pompliano gave a similar view to Fox Business Monday, explaining that Bitcoin’s “value and price are diverging” and that “weak hands are selling to strong hands:”

What we’re watching right now is the transfer from weak, short-term oriented people with weak hands into the long-term oriented strong hands.”

See Also: Hester Peirce expresses strong support for crypto spot ETFs and regulatory structure

The Euro Coin (EUROC) will be fully backed by euro-denominated reserves held in the custody of financial institutions that fall “within the U.S. regulatory perimeter,” the company announced Thursday. One such institution will be San Diego-based Silvergate Bank, the company said.

Euro Coin is a regulated, euro-backed stablecoin issued under the same full-reserve model and built on the same pillars of trust, transparency, and security that have made USDC one of the world’s most trusted digital currencies.

Euro Coin will launch on the Ethereum blockchain on June 30 as an ERC-20 standard token. Once trading on exchanges kicks off, people and businesses will be able to trade for Euro Coin and withdraw EUROC from exchanges and put it in Ethereum-compatible wallets.

It is unclear how a euro-backed stablecoin issued under U.S. standards might be perceived by EU leaders, and how Circle is anticipating the EU’s pending [MiCA] legislation. EUROC joins a short list of euro-backed stablecoins including EURt, issued by Tether, and EURS, from Malta-based Stasis.”

See Also: Bitso Processed $1B in Crypto Remittances Between Mexico and the US so far in 2022

“The Tesla CEO spoke Thursday at an all-hands meeting for the social network company. Musk said it “makes sense” to integrate digital payments into Twitter (TWTR).

Money is fundamentally digital at this point and has been for a while. It would make sense to integrate payments into Twitter so it’s easy to send money back and forth.

Twitter has already tiptoed into cryptocurrency, incorporating bitcoin (BTC) tipping in 2021 under then-CEO Jack Dorsey, and adding ether (ETH) functionality early this year.”

See Also: Elon Musk, Tesla and SpaceX Hit With $258 Billion Dogecoin Lawsuit

“Russia’s Gazpromneft and U.S.-sanctioned bitcoin (BTC) mining hosting firm BitRiver plan to develop crypto mining facilities at oil fields, according to memorandum signed at the St. Petersburg International Economic Forum on Thursday. The oil-producing subsidiary of state-owned natural gas giant Gazprom will provide energy to data centers set up by BitRiver.

On April 20, BitRiver was added to the U.S. Treasury Department’s Office of Foreign Asset Control (OFAC) list of specially designated nationals, because the company helps Russia “monetize its natural resources.” The company has called the measures unfair and anti-competitive and has announced plans to sue the U.S. government.”

Several U.S. states including Texas and Alabama are investigating Celsius Network’s decision to halt customer withdrawals.

I am very concerned that clients – including many retail investors – may need to immediately access their assets yet are unable to withdraw from their accounts. The inability to access their investment may result in significant financial consequences.

This is not Celsius’ first brush with Texas’ state securities regulators, who began looking into the platform’s crypto interest accounts – which advertised returns of up to 17% – last September.”

“We exercised our best business judgment recently with a large client that failed to meet its obligations on an overcollateralized margin loan. We fully accelerated the loan and fully liquidated or hedged all the associated collateral.

Prince’s tweet followed a Financial Times report that Three Arrows was liquidated by BlockFi and other top-tier crypto lending firms after it failed to top up its loan collateral.

See Also: Liquidity provider asks platforms to freeze 3AC funds to recover assets after litigation

16 June

“The U.S. Federal Reserve on Wednesday raised interest rates by 75 basis points, or three-quarters of a percentage point. It is the biggest rate hike in 28 years, part of an ongoing effort to bring down soaring inflation. The Fed Funds rate will rise to a range of 1.5%-1.75%. Bond traders are pricing in a range of 3.25%-3.5% by the end of the year, implying an unusually rapid and harsh pace of monetary tightening.

Powell said the U.S. central bank will not “declare victory” until officials see “compelling evidence” that inflation is coming down. ‘The labor market is extremely tight, and inflation is much too high.’

Bitcoin (BTC) was changing hands around $21,444 about an hour after the meeting, up from $21,076 when the decision was released. Most analysts had already priced in the hike in the days leading up to the meeting.

Overall economic activity appears to have picked up after edging down in the first quarter. Job gains have been robust in recent months, and the unemployment rate has remained low.”

Dubai-based crypto fund Three Arrows Capital is facing possible insolvency after incurring at least $400 million in liquidations. Three Arrows, popularly known as 3AC, was liquidated by crypto lending firms and is currently in the process of repaying lenders and other counterparties.

3AC’s troubles come amid reports that crypto lender Celsius may be insolvent. Meanwhile, on-chain data suggests 3AC is selling its existing crypto positions to lower collateral requirements for certain positions. One of 3AC’s wallets has a debt totaling $183 million.

We are in the process of communicating with relevant parties and fully committed to working this out.”

Crypto lending firm Celsius has hired lawyers specializing in business restructuring to help it navigate its thorny financial situation. Lawyers from the Philadelphia-based Akin Gump Strauss Hauer & Feld LLP are working with Celsius, which at its peak held over $10 billion in client assets.

Celsius took the dramatic step of freezing account withdrawals Monday amid the broader crypto market downturn.”

See Also: Celsius Troubles, UST Collapse May Help Crypto Long Term, FSInsight Says
See Also: Crypto Lending Platforms ‘Should Be Regulated’: Former CFTC Chairman

“The stETH price drop has fueled some worries on Twitter and elsewhere that Lido is “the next Terra.” Fortunately, such worries aren’t grounded in actual understanding of how stETH works under the hood.

First off, while Terra’s UST stablecoin was “pegged” to the price of $1, stETH was never pegged to the price of ETH. So long as stETH is not redeemable for ETH, there’s nothing guaranteeing the two should sell at the same price until they are interchangeable.

The price of [Lido] staked ETH prices in some risk of not doing the Merge, some risk of [Ethereum not allowing] withdraws, and some opportunity cost of having your ether locked up for along time.

Unless you believe ether is going to zero or you think it will never successfully merge into a proof-of-stake network, you can rest easy knowing you can wait it out and eventually trade stETH back for ETH. The relationship between stETH and ETH does not have the sort of feedback loops that doomed Terra.

The people selling stETH at a discount to ETH either need to cash out now (like Celsius needing to pay off loans), or figure ETH’s price will be lower than it is today even after The Merge. Even if it trades at a discount to ETH currently, stETH is unlikely to crash (similar to Terra) unless ether itself crashes.”

“Investors pulled out about $1.6 billion in 48 hours from Tether’s dollar-pegged USDT stablecoin, reducing its circulating supply to $70.8 billion, the lowest since October 2021.

Paolo Ardoino, chief technology officer of Tether, said that Tether liquidated its Celsius position without a loss and has no exposure to Three Arrows Capital. USDT’s price has been holding up its anchor to the U.S. dollar.

The composition of Tether’s reserve to back the price of USDT has long since been an area of concern in the crypto market, with questions surrounding the nebulous “commercial paper” holding and digital asset investments.”

See Also: Tether Denies Claims of Asian Commercial Paper Backing, Exposure to Three Arrows Capital

“The proposed addition in Article 835 of the Civil Procedure Code states that while crypto assets are not a currency in and of themselves, they could be ‘used as a financial asset, means of exchange or payment, or instrument of access to goods and services or investment.’ A broad interpretation of the proposal suggests that cryptocurrencies such as Bitcoin (BTC) or Ether (ETH) could be used to pay for goods and services across the country.

The proposal also discusses the new powers and limitations that Brazilian courts would have once crypto is recognized as a financial asset, such as freezing exchange accounts. However, the proposal has also stopped short of giving the court power to seize users’ private keys.

Access, by the Judiciary, to the users’ private key is prohibited.”

See Also: Russian bank Sber to complete its first digital currency deal

“Blockchain analytics platform Nansen has launched what is said is an end-to-end encrypted messaging app for global crypto participants to engage with each other while enhancing developer accountability. The transparency should help reduce scams such as the Discord moderator hacks.

Nansen Connect will allow users to log in via their crypto wallets, select a username based on their Nansen wallet labels and join groups based on crypto holdings and on-chain behaviors.”

Forta takes a decentralized approach to security by working with a loose federation of researchers who deploy bots to patrol various corners of the blockchain world. The bots are deployed by a network of nodes to act as a kind of security camera network to monitor for abnormal activities.

Beal says blockchains evolve so rapidly that it doesn’t make sense to rely on centralized cybersecurity giants in the way that the Web 2.0 world does. But to ensure the node operators act in the best interest of the network, Forta is introducing incentive systems like the FORT token.

The FORT token will allow the Forta Network to continue growing and attracting quality contributors.

A number of major blockchain projects—including Lido, Compound and Polygon—are already using Forta to monitor their activities.”

15 June

A a 75 basis point (0.75 percentage point) hike is suddenly seen as all but certain. Up until last week, economists predicted a 50 basis point rate increase, as happened in May. But a U.S. government report Friday showed the consumer price index, which tracks inflation, rose to a new high of 8.6% instead of an expected slowdown. Now, the central bank is entertaining the possibility of accelerating its rate hikes.

As a result, Goldman Sachs (GS) changed its forecast to 75 basis points for the next rate increase. Similarly, the CME FedWatch Tool, which uses 30-day Fed Funds futures data, shows traders see a 94% chance of a 75 basis point hike, compared with 35% just one day ago.

Our best guess is therefore that the [WSJ] article is a hint from the Fed leadership that a 75bp rate hike is coming.”

“Crypto-tracked futures lost over $1 billion in the past 24 hours, weighed down by a weak sentiment for bitcoin and other cryptocurrencies amid a weak global economic outlook. Bitcoin accounted for over $532 million of all liquidations, followed by ether (ETH) at $317 million and Solana’s SOL token at nearly $20 million, with some 213,000 individual trading accounts seeing liquidations in the past 24 hours.

Open interest – or the number of unsettled futures contracts – decreased by 7% in the past 24 hours to $23 billion, suggesting a considerable number of traders closed their positions expecting further market volatility.

Much of the decline in the past few months has come as the U.S. Federal Reserve (Fed) plans to hike rates in the coming months to battle the ill effects of record inflation – a move that has inadvertently caused a slide in global stocks and subsequently cryptocurrencies as investors take money off assets deemed risky.”

See Also: Coinbase Lays Off Around 1,100 Employees
See Also: Celsius’s CEL Token Jumps 8-Fold in Intraday Spike
See Also: MicroStrategy Defended at BTIG; Saylor Not Expecting Imminent Margin Call
See Also: ‘Staked Ether’ Becomes Focus of Crypto Stress, From Celsius to Three Arrows

A bill intended to specify the rules and roles for crypto regulation could inadvertently “undermine” other market protections, U.S. SEC Chair Gary Gensler said Tuesday.

Gensler suggested many crypto companies are already engaging in behaviors overseen by his agency, pointing to companies that offer yield for staking as one example. Gensler said most crypto exchanges list hundreds of tokens, and ‘it’s highly unlikely that all of them, 100% are not securities.’

His counterpart at the Commodity Futures Trading Commission (CFTC), Rostin Behnam, previously said the bill ‘does a very good job.'”

See Also: SEC Launches Inquiry Into Insider Trading at Crypto Exchanges: Report
See Also: Ripple counsel slams SEC for trying to bulldoze and bankrupt crypto

“OpenSea is revamping its back end and moving from the Wyvern protocol to its self-developed Seaport protocol. OpenSea says the switch could significantly reduce transaction costs on the platform, lowering gas costs by about 35%. The company estimates the switch will save users $460 million in the next year.

In addition to lowering gas costs, moving to Seaport will allow OpenSea to eliminate initiation fees, let users make offers on entire collections and make its wallet signatures “easier to read and understand.”

Seaport is a game changer, it’s open source, inherently decentralized and a modern foundation that will help us (and any teams using it) build and release new features more quickly.”

“Researchers at the federally funded Lawrence Livermore National Laboratory in California have combined statistical mechanics and information theory to design a class of stablecoin dubbed the Electricity Stablecoin (E-Stablecoin) that would transmit energy as a form of information. Livermore’s Maxwell Murialdo and Jonathan L. Belof say their innovation would make it possible to transmit electricity without physical wires or a grid and create a fully collateralized stablecoin pegged to a physical asset – electricity – that is dependent on its utility for is value.

According to the scientists, the E-Stablecoin would be minted through the input of one kilowatt-hour of electricity, plus a fee. The stablecoin could then be used for transactions the same way as any stablecoin, or the energy could be extracted by burning it, also for a fee.

Investors would be able to mint E-Stablecoins in regions where electricity prices are low and burn the tokens where electricity is more expensive.

Vitalik: Soulbound NFTs

14 June

“The company announced it would also pause its swap and transfer products. The price of Celsius’s CEL token fell over 50% after the news came out.

We are working with a singular focus: to protect and preserve assets to meet our obligations to customers. Our ultimate objective is stabilizing liquidity and restoring withdrawals, Swap, and transfers between accounts as quickly as possible. There is a lot of work ahead as we consider various options, this process will take time, and there may be delays.

Crypto reporter Colin Wu posted Monday that Celsius has transferred about 104,000 ETH to FTX in the past three days.”

See Also: Nexo Proposes Celsius Buyout as Rival Lending Platform Halts Withdrawals
See Also: What Crypto Lender Celsius Isn’t Telling Its Depositors

The latest leg down came as the big crypto lender Celsius, which as recently as April claimed to hold at least 150,000 bitcoin, worth about $3.5 billion at current prices, halted withdrawals.

The overall market capitalization of cryptocurrencies fell below $1 trillion for the first time since early 2021, with big losses in tokens including SOL and DOGE. Crypto-related stocks, led by MicroStrategy (MSTR), plunged. Binance temporarily paused bitcoin withdrawals (reportedly due to technical issues). Crypto.com and the crypto lender BlockFi announced job cuts. Tron’s USDD stablecoin wobbled off its $1 peg.

The pain in crypto mounted as traditional markets also came under severe pressure. The Standard & Poor’s 500 Index tumbled 4% to a new low for the year. The biggest driver appeared to be renewed investor fears the U.S. Federal Reserve will have little choice but to tighten monetary policy aggressively to tamp down inflation, which is running at its hottest in four decades. The next two-day Fed monetary policy meeting starts Tuesday, culminating Wednesday with a statement and press conference hosted by Chair Jerome Powell.

As of press time, bitcoin was changing hands around $23,200, down 16% over the past 24 hours. Ether (ETH), the native token of the Ethereum blockchain, slumped 18% to $1,222.”

See Also: Ethereum price enters ‘oversold’ zone for the first time since November 2018
See Also: DeFi contagion? Analysts warn of ‘Staked Ether’ de-pegging from Ethereum by 50%
See Also: Crypto crash wreaking havoc on DeFi protocols, CEXs
See Also: Floor price of popular NFT collections collapse due to bear market
See Also: Michael Saylor’s MicroStrategy Leads Plunge in Crypto-Related Stocks
See Also: MicroStrategy Now Down $1B on Its Bitcoin Bet

“JPMorgan (JPM) hopes it has found a way for decentralized finance (DeFi) developers to leverage the yield-generating potential of non-crypto assets. Tyrone Lobban, head of Onyx Digital Assets at JPMorgan, described in detail the bank’s institutional-grade DeFi plans and highlighted how much value in tokenized assets is waiting in the wings.

Over time, we think tokenizing U.S. Treasurys or money market fund shares, for example, means these could all potentially be used as collateral in DeFi pools. The overall goal is to bring these trillions of dollars of assets into DeFi, so that we can use these new mechanisms for trading, borrowing [and] lending, but with the scale of institutional assets.

Onyx Digital Assets sees two complementary parts to bringing bank-grade DeFi to fruition. One component is JPMorgan’s blockchain-based collateral settlement system that was extended last month to include tokenized versions of BlackRock’s money market fund shares. The second piece of the puzzle is a recent pilot that is being led by the Monetary Authority of Singapore and includes JPMorgan, DBS Bank and Marketnode and is dubbed “Project Guardian.” It tests institutional-friendly DeFi using permissioned liquidity pools that are made up of tokenized bonds and deposits.

These ventures into DeFi will involve public blockchains and have a permissioned structure similar in many ways to what is being done by the likes of Aave Arc and Fireblocks. JPMorgan hasn’t decided what DeFi platforms and counterparties it will work with, Lobban said, but it will be among the recognized offerings. ‘It’ll be from the bench of protocols that you’d expect, battle-tested with high TVLs.'”

See Also: Goldman Sachs Executes Its First Trade of Ether-Linked Derivative: Report

“The Tron network’s stablecoin, USDD, lost its peg to the U.S. dollar on Monday, dipping to as low as 91 cents, as crypto markets nosedived.

Tron founder Justin Sun tweeted Monday that the funding rate on the Binance exchange for betting against, or “shorting,” the Tron blockchain’s native TRX token stood at negative 500%, a whopping rate that suggests many investors are clamoring to get into that trade. According to Sun, TronDAO ‘will deploy $2 billion to fight them.’

Decentralized USD (USDD) is an algorithmic stablecoin on Tron eerily similar to Terra’s stablecoin, UST, which lost its price peg and eventually imploded a month ago. TronDAO said in a tweet that it added $650 million of USDC to its reserve.

According to the official TronDAO website, USDD’s collateral stands at $2 billion, while USDD’s supply in circulation is $723 million, suggesting that it holds enough capital to prop up the stablecoin by using reserves to buy USDD. At press time, USDD was changing hands around 99 cents but still had not recovered its dollar peg. TRX, the twin token of the stablecoin, dropped 17% in the last 24 hours.”

“Manhattan’s Fifth Avenue is a vaunted strip of stores, with luxury retailers and other major brands fighting for shoppers’ attention. Come next week, an NFT gallery will join their ranks. What really stands out is the ability for anyone, anywhere to own the exclusive rights to show off and sell their own NFTs—either created or collected—on one of the displays, and control it remotely.

The location will feature 300 NFT displays from partner Tokenframe, which can only be controlled by the owner of an associated Genesis NFT. If you buy a Genesis NFT—whether during the initial primary sale, or in the future from a secondary marketplace—then you can showcase almost any NFTs you want in the gallery. Within the gallery, visitors can scan a QR code on the frame and purchase any NFTs that are listed for sale.

See Also: Ukraine to Use NFTs to Save Its Cultural ‘DNA’ Amid Russian Invasion
See Also: ‘Snow Crash’ Author Neal Stephenson Is Building a ‘Free Metaverse’ Called Lamina1

The network will launch new crypto tokens tied to individual networks. The shift to a new model comes as Helium attempts to expand its offerings with 5G connectivity and more. The existing HNT token will continue to exist and serve as something of a “reserve currency” or “floor currency” for the expanding Helium ecosystem.

Helium will first launch a new MOBILE crypto token this month, which will reward people who operate a 5G node. In August, the network plans to launch a new IOT token that node operators will earn for the original LoRaWAN network designed for Internet of Things (IoT) devices, like sensors and trackers. The network now has more than 850,000 active nodes around the world, up from 640,000 in mid-March.

Today’s announcement is indicative of a larger shift—a “network of networks” approach that can bring additional future protocols under the Helium umbrella in the future. Helium could encompass a wide range of connectivity protocols—including Wi-Fi or content delivery networks (CDNs), for example.”

Over 2,000 Terra investors say false marketing is what caused them to lose their money. The suit, which was filled by U.S.-based law firm Roche Freedman LLP, alleges that Binance.US marketed Terra’s dollar-based UST as more stable than it actually was. Misleading advertising is what the suit says is to blame for those losses.

Binance U.S. recklessly listed and promoted UST as a ‘safe’ stablecoin to those seeking to avoid the volatility of other cryptocurrencies. They, as well as other exchanges that listed UST, should be held accountable.”

See Also: Do Kwon dismisses allegation of cashing out $2.7B from LUNA, UST

11 June

CPI, the most widely tracked benchmark for inflation, rose 8.6% on a year-over-year basis in May, topping expectations that it would decline to 8.2% from April’s 8.3%. On a monthly basis, the CPI rose 1% in May, ahead of expectations for a gain of 0.7%, and more than tripling from April’s 0.3% advance.

The unexpected fresh four-decade high of 8.6% in headline inflation is problematic for monetary policymakers who are in the middle of a rate hike cycle but may have been eyeing a pause at some point later this year. Now the question may be whether the U.S. Federal Reserve needs to raise rates by 75 basis points per meeting rather than the planned 50 basis points.

Bitcoin (BTC) – along with nearly all assets – has taken a major hit as western central banks have begun tightening monetary policy over the past few months. BTC has dipped to $29,500 from $30,000 in the minutes after the report.

There are certainly positive signs that would indicate the worst [on inflation] is behind us. The job market remains strong, which is putting money in people’s pockets. However, price increases are still outpacing people’s paychecks. Hopefully, this trend will reverse itself as inflation reaches its peak and begins to dissipate. Our purchase spending data suggests that this is the direction we are headed.

Friday’s inflation report is the last major economic indicator that the Fed sees before its next meeting June 14-15, at which time the central bank is widely expected to raise its benchmark federal funds rate by another 50 basis points, in what would be the third rate hike this year.”

See Also: Mike Novogratz Predicts Next Crypto Cycle Begins in October

“Officials from investment firms Grayscale and Bitwise are optimistic a spot bitcoin exchange-traded fund (ETF) will finally be approved by the U.S. SEC.

Grayscale’s proposal to convert GBTC to an ETF is going through a public comment period, with the deadline for the SEC’s decision coming July 6. The deadline for a decision on the Bitwise application is June 29.

Eventually, [an ETF] will be the largest way that investors will hold bitcoin.”

“The U.S. Treasury Department is once again looking at a controversial proposal to identify who controls unhosted cryptocurrency wallets. Wally Adeyemo, deputy secretary of the Treasury, said that storing crypto anonymously outside of regulated venues allowed people to bypass sanctions and anti-money laundering (AML) checks.

We’re working to address the unique risks associated with unhosted wallets.”

The Abra Crypto Card will allow users to earn back crypto on any purchase, no matter the amount or category.

Cardholders can choose from any of the more than 100 cryptocurrencies supported on the Abra platform, with no annual or foreign transaction fees. The card will also come with Amex Offers for shopping, travel, dining and services as well as presale ticket access and purchase protections.

Amex retail offers from hundreds of merchants are integrated into the app with the whole fraud and purchase protection all integrated with the Abra wallet.”

See Also: Mastercard Now Allowing Cardholders to Buy NFTs on Several Marketplaces

Marc Andreessen & Chris Dixon of a16z | Reinventing the Internet (Recommended Watch)

Layer 2 bridge Hop protocol has distributed 20.5 million governance tokens (HOP) to its users in the form of an airdrop. A total of 54.8 million tokens are available to be claimed by 145,329 eligible recipients.

Hop protocol currently supports Gnosis and Polygon as mainnet rollups but will soon offer support for Optimism and Arbitrum.”

See Also: Optimism Attacker Returns 17M Stolen OP Tokens

“Data has become a valuable resource in the digital universe, whether that’s aggregated data from people’s retail decisions or self-driven miles accumulated by the auto industry’s AI-enabled cars. However, the raw data sets needed to model outcomes or train machine-learning algorithms have tended to accumulate in the hands of a few very large companies – a situation Ocean aims to democratize for a Web 3 future.

Ocean’s version 3, released in late 2020, allowed particular data sets, the supply-chain data of a large company, for example, to be accessed using Ethereum-based “data tokens” that would enable the data to be shared and also monetized in decentralized data marketplaces. Version 4 of the protocol uses NFTs as a more flexible way to handle data ownership as it becomes a yield-bearing asset.

We saw that the ability for you to encode your ownership right of the data set into NFT was very powerful.”

See Also: CZ visits Palau to kick off BNB Chain-supported ID NFTs for digital residency program
See Also: Pussy Riot Crashes Texas State Capitol, Mints Commemorative Ethereum NFT

“Jack Dorsey’s beef with Web 3 has never been a secret. TBD – the bitcoin-focused subsidiary of Dorsey’s Block (SQ) – announced its new vision for a decentralized internet layer on Friday. Its name? Web 5. The Block subsidiary’s alternative ditches Web 3’s blockchain-centric model and places bitcoin at the forefront. But there is no official release date, as yet.

TBD lead Mike Brock explained that Web 5 – in addition to being “two better than Web 3” – would beat out incumbent models by abandoning their blockchain-centric approaches to a censorship free, identity-focused web experience.

This is really a conversation about what technologies are built to purpose, and I don’t think that renting block space, in all cases, is a really good idea for decentralized applications.”

10 June

See Also: Summary of Ropsten Testnet Merge

Three-quarters of United States retailers plan to accept crypto or stablecoin payments within the next two years, according to a new survey published by Deloitte.

It also found that more than half of large retailers with revenues over $500 million are currently spending $1 million or more building the required infrastructure to make it happen. A large majority, around 85%, of the surveyed merchants said they anticipate that cryptocurrency payments will be ubiquitous in their respective industries in five years.

Consumer interest is driving merchant adoption, with 64% of merchants signaling their customers have expressed significant interest in using crypto for payments. Roughly 83% of retailers expect interest to increase or significantly increase over 2022.

Improving customer experience, increasing the customer base and the hope their brand is perceived as “cutting edge” were the biggest reasons given for a desire to adopt crypto payments. Of the retailers already accepting cryptocurrency, 93% have reported a positive impact on their customer metrics.”

See Also: Flexa Expands Payments Suite for Multiple Cryptocurrencies and Wallets

Institutional crypto custody firm Anchorage Digital along with other global crypto companies has formed a custody exchange network in a bid to improve the crypto marketplaces for investors. Crypto exchange Binance.US is part of the new network, and Anchorage has commitments from CoinList, Blockchain.com, Strix Leviathan, and Wintermute.

As the American digital asset industry continues to mature, there is growing demand from institutions for custody, liquidity and enhanced market access. By combining the advanced security of Anchorage with the best-in-class exchange technology of Binance.US, this integration eliminates multiple pain points to institutional trading, and marks a major milestone in the evolution of digital asset infrastructure.

We actually genuinely believe it’s a better market structure going forward and answers a lot of the questions that regulators have had.”

See Also: Crypto Trading Firm Wintermute to Launch DEX on Ethereum
See Also: Virtu Sees Crypto Market-Making Opportunity, Has Little Confidence in Incumbents, CEO Says

The US SEC is looking into whether Terraform Labs violated U.S. laws regarding how it marketed the crypto coins.

The agency was already investigating Terraform founder Do Kwon in connection with his role in building the Mirror Protocol, which allows users to trade tokens representing synthetic stocks.”

See Also: Terraform Labs Probed for Alleged Bitcoin Embezzlement Following UST Collapse: Report
See Also: $15M of Optimism Tokens Stolen After Wintermute Sent Wrong Wallet Address

9 June

“The Ethereum blockchain’s first dress rehearsal for its upcoming Merge was successfully completed Wednesday.

The Ropsten test network (testnet) successfully merged its proof-of-work execution layer with the Beacon Chain proof-of-stake consensus chain – a process identical to the one that the main Ethereum network will undergo in just a few months. Other testnet merges on Goerli and Seoplia are expected to happen in the coming [weeks].

Once Ethereum shifts from PoW to PoS, validators who have staked the required 32 ETH will take over the role of adding new blocks to the blockchain. Currently, the Beacon Chain runs in parallel with the current PoW chain.”

See Also: Ropsten POS Chain

Analysts await the likely outcome of the European Central Bank’s monetary-policy meeting on Thursday, which could affect in which direction BTC moves next.

It’s possible central banks beyond the U.S. Federal Reserve might start to hold sway over markets. As central banks outside the region start to raise interest rates, theoretically making their fixed-income assets more attractive to yield-seeking investors, they make their currencies more attractive. That could have implications for bitcoin because its price is usually denominated in dollars, and the trend often coincides with moves in the greenback versus major regional currencies.

We’re starting to price in much more aggressive tightening by the ECB. This is going to counter a tremendous amount of dollar strength. The consensus trade is going to be for the dollar to weaken in the second half of the year.”

See Also: Will El Salvador Default on Its Sovereign Debt in 2023?

Stablecoins traded in the U.S. state of New York should be fully backed by certain assets, with these assets segregated from the issuers’ operational funds and attested to by an auditor regularly, according to new guidance issued by the state’s banking and finance regulator.

Our goal is to accomplish those things for the stablecoin market, the safety and soundness of institutions, stability of the marketplace and consumer protection.”

See Also: CFTC Chief Heaps Praise on Bill That Boosts Agency’s Crypto Reach

“Sharing the groundwork for policy discussions around the environmental impacts of digital currencies, the IMF recommends moving away from proof-of-work-based distributed ledger technology applications. The IMF also points out that the policymakers will consider the mainstreaming of crypto or CBDCs by weighing the environmental impact of the technology’s underlying design.

In addition to eco-friendly components, the IMF recommended central banks include other features in CBDCs, such as compliance, higher resilience and offline capabilities.”

LINK’s latest price action follows the publication of its updated roadmap for the implementation of staking. The initial implementation of Chainlink, called v0.1, is projected for the second half of 2022 and will mark the beginning of Chainlink Economics 2.0, the project’s ‘new era of sustainable growth and security.’

The increase in oracle security and user assurances brought about by staking will be key in helping the multi-chain smart contract economy scale to eventually secure multi-trillion-dollar markets across major global industries.

According to Chainlink, the initial staking pool will start with an aggregate size of 25 million LINK tokens, with the goal of expanding to 75 million tokens.”

See Also: Maker’s Decentralized Stablecoin Is Coming to Cosmos Thanks to Umee
See Also: DeversiFi Launches Cross-Chain Swaps for Bridgeless DeFi Transactions

“Adim is a new Web3 entertainment company from actor and creator Rob McElhenney. The startup will use decentralized writers’ rooms to develop IP and then share in future royalties or revenue with NFT-holding co-creators.

Adim is building for the next evolution of these groups—communities of creators, writers, artists, designers, developers, fans, and friends working together to create and own a new generation of content.”

See Also: Anthony Hopkins Adopts Ethereum Name, Asks Snoop Dogg What NFT to Buy
See Also: Salesforce Launching Platform for Brands to Mint and Sell NFTs
See Also: Budweiser’s Clydesdales Zoom Into Ethereum NFT Racing Game Zed Run