Author: José Oramas

José is a journalist and translator with a keen interest in blockchain and cryptocurrencies.

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Crypto Exchange Crypto News

CoinFlex Files for Restructuring Amid Alleged ‘Bitcoin Jesus’ Default

Coinflex has filed for restructuring in a Seychelles court, according to a report from Bloomberg:

Coinflex is a derivatives exchange that has been struggling to recover a monumental loss – said to be at least US$84 million – after a counterparty failed to meet a margin call.

The exchange is looking for approval from depositors and the court to issue depositors with rvUSD tokens, equity, and a locked version of the exchange’s native token FLEX coin. Additionally, the firm plans to launch “Locked Balances Markets”, which will be traded against unlocked balances on the platform.

Coinflex on the Edge

In June, the exchange halted user withdrawals due to market conditions, only to resume services in July – the same month it laid off over 50 percent of its staff.

Problems had been brewing since late June when the CEO of Coinflex, Mark Lamb, said Roger Ver – the counterparty in question – owed the exchange US$47 million in USDC:

Coinflex stated it would communicate with its customers as the process continues. Its founders will presumably host a video AMA next week to answer users’ inquiries and doubts.

Bad News Follows Bad

Of course, news of crypto exchanges halting services and preventing users from accessing their accounts no longer comes as a surprise in the ongoing bear market:

Of that list, Celsius has since declared bankruptcy while Zipmex this week announced it would allow partial withdrawals of bitcoin and ethereum.

Categories
Crypto Exchange Crypto News

Hotbit Exchange Suspends All Services Due to Ongoing Criminal Investigation

The old crypto adage “not your keys, not your coins” is relevant once again this week after popular crypto exchange Hotbit halted trading, deposits and withdrawals amid an ongoing criminal investigation concerning a former manager of the company.

In an August 10 blog post, the company announced that law enforcement had frozen “some funds of Hotbit” and thus it is unable to determine how long it will take to resume operations:

However, Hotbit didn’t disclose exactly which jurisdiction was investigating the exchange’s former employee:

A former Hotbit management employee who left Hotbit in April this year was involved in a project last year (which was against Hotbit’s internal principles and of which Hotbit was unknown) that law enforcement authorities now think is suspected of violating criminal laws.

Hotbit blog post

Compensation Plan in the Works

Hotbit stated that users’ unfilled open orders would be cancelled until the exchange resumes operations, and that leveraged ETF positions would be “forcibly liquidated to prevent further losses”.

On a side note, the exchange said it would come up with a compensation plan that will be published when “the website is resumed”.

The crypto bear market has not only drawn down cryptocurrency prices but caused a lot of institutional meltdowns in the industry. Hotbit is just the latest crypto firm to prevent users from accessing their funds.

Last month, Zipmex halted user withdrawals citing “circumstances beyond our control”, while another Singapore-based exchange, Hodlnaut, followed suit citing “market conditions”.

Categories
Metaverse NFTs Real Estate

Metaverse Real Estate Bubble Pops, Prices Crash 85% Amid Waning Interest

Not even the metaverse is exempt from housing bubbles as virtual property sales have plunged 85 percent in 2022, according to recent analytics from digital land gateway platform WeMeta.

In just six months, the metaverse real estate industry has seen a massive decline in volume. The bubble reflects waning interest and a wider retreat in cryptocurrencies and non-fungible tokens (NFTs), combined with harsh macroeconomic conditions:

The WeMeta analytics were based on the six largest Ethereum metaverse projects, including Decentraland and The Sandbox. Overall, land sales volume across these platforms has dropped considerably, from a peak of US$1 billion in November 2021 to barely US$150 million in August 2022:

Source: WeMeta

Metaverse ETFs (exchange-traded funds) have also lost value, with the Roundhill Ball Metaverse ETF (METV) plunging along with blockchain-based metaverse projects. The METV offers investors exposure to companies exploring the metaverse, such as Facebook’s parent company, META. Accordingly, the ETF has tanked by nearly 50 percent from its all-time high of US$17.11 in November 2021.

Source: TradingView

Buying Digital Land is ‘the Dumbest Sh*t Ever’, Says Cuban

Billionaire crypto advocate Mark Cuban has some harsh words for everyone who jumped in on digital real estate. “It’s the dumbest shit ever,” he said in an interview this week with YouTube channel Altcoin Daily.

The metaverse and NFTs have been waning in demand for months, and only a handful of projects have seen millionaire investments from fundraising rounds. Such was the case with Ethereum-based NFT game Illuvium, which raised more than US$72 million following the sale of nearly 20,000 digital land plots.

At the height of the NFT craze last year, a single Axie Infinity land plot sold for a record US$2.5 million. Considering the market bubble, best not ask about the current price of other lands in the metaverse.

Categories
CeFi Crypto News DeFi NFTs

Despite Downturn, Crypto Fundraising Outpaces All of 2021

The cryptocurrency sector has generated over US$30 billion in fundraising in the first half of the 2022 fiscal year – more than the entire year of 2021, according to a report from crypto firm Messari.

The report says US$30.3 billion was raised through 1199 funding rounds across centralised finance (CeFi), decentralised finance (DeFi), Web3 and NFTs (non-fungible tokens ). At least US$25.9 billion came from crypto funds and US$10 billion from traditional funds.

Centralised Exchanges Attract Wide Capital Influx

Moreover, centralised exchanges have attracted a wide influx of capital despite some brokers filing for bankruptcy: US$4.6 billion in the first quarter of H1 and US$5.6 billion in the second quarter of H1. This represents 108 percent more than H1 2021 and more than a third of total fundraising:

DeFi Sector Falls Behind

Web3-related startups have also attracted considerable capital. However, it seems the DeFi sector fell behind with barely US$1.8 billion raised. Astar Network was one of the stellar protocols in terms of fundraising. On April 5, the protocol announced it had secured over US$22 million in a fundraising round led by several crypto companies and angel investors.

Moreover, blockchain game GOALS netted US$15 million in seed funding led by Northzone, a venture capital firm, and the CEO of Sorare.

Bear Market Out to Two Years?

After the fall of several cryptocurrency companies following the collapse of Terraform Labs, combined with global inflation and other macro economic factors, selling pressure has been widening across the crypto market. Some crypto analysts even predict a two-year-long bear market. But institutions and big investors are still betting on blockchain technology and crypto assets, the report notes.

Categories
Ethereum Ethereum Classic Tether

Key Miner Plans to Derail ETH’s Transition to Proof-of-Stake

The Ethereum Merge – the term used to describe Ethereum’s transition from proof-of-work (PoW) to proof-of-stake (PoS) – is getting closer to realisation, possibly by mid-September.

However, according to one prominent figure in the Ethereum community, Chandler Guo, a new PoW version of ETH is “coming soon”.

Last week, Chinese crypto miner Guo tweeted about the advent of a PoW ETH, despite the already existing ETC (Ethereum Classic), which Guo was part of. He proclaimed: “I fork[ed] Ethereum once, I will fork it again!”

The plan is gaining traction on Crypto Twitter, though many in the Ethereum community remain confused and had mixed reactions. Some of them stated there was no need for a new PoW:

Huobi, Poloniex Back a Possible ETH Fork

It seems several high-profile players in the industry are supporting the idea of an ETH fork, including the Justin Sun-backed crypto exchange Poloniex, and Huobi.

Sun tweeted about his intention to donate over 1 million ETH if Guo carried out his plan, saying: “We are willing to continue to support the development of the community.”

Many users inquired about Tether’s (USDT) involvement regarding an ETH fork, with Tether CTO Paolo Ardoino clearly outlining Tether’s support for the Merge:

It’s not about what I/we prefer between PoW/PoS. Stablecoins should act responsibly and avoid disruption for users. Especially for DeFi, it’s really delicate.

Paolo Ardoino, CTO, Tether

Categories
Bitcoin Crypto News Markets

This Bear Market May Last Longer Than Others, On-Chain Analytics Firm Suggests

The cryptocurrency market has been rocked in the past couple of months due to several key factors within the industry but also by events at a macroeconomic level.

And according to on-chain data from blockchain intelligence firm Glassnode, the current bear market could last longer than others:

Bullish Weeks Not Strong Enough

As per the Glassnode report, Bitcoin and other cryptocurrencies failed to reaffirm a bullish retracement last week, and the market is instead heading towards a harsher downturn that could last several months or even years.

Bitcoin, for example, last week hit a high above US$24,000 shortly after the US Federal Reserve increased interest rates by 75 basis points. However, the father of all cryptos lost momentum entering the new week, falling below the US$23k level.

Glassnode’s report notes that BTC’s on-chain demand remains “lacklustre at best”.

Source: Glassnode

With the exception of a few activity spikes higher during major capitulation events, the current network activity suggests that there remains little influx of new demand as yet.

Glassnode report

The report also observed certain similarities between the current network demand and those from 2018 to 2019. After BTC hit its all-time high in April 2021, the asset has been in a macro-decline despite regaining momentum throughout that year:

Categories
Aave Stablecoins

Aave DAO Approves Creation of Yield-Generating Algorithmic Stablecoin ‘GHO’

The Aave DAO (Decentralised Autonomous Organisation) has approved the creation of a yield-generation stablecoin called GHO.

Aave is one of the most popular crypto lending protocols. Initially launched in the Ethereum ecosystem, it also supports other layer-1 networks such as Avalanche and Fantom.

GHO to be Heavily Backed

As per a July 31 announcement, the GHO proposal was submitted by Aave Companies, an organisation of developers supporting the Aave protocol. The Aave DAO voted 99.9 percent in favour of the creation of GHO, which will be reportedly backed by a basket of cryptocurrencies:

Users keen to mint GHO will have to allocate collaterals exceeding the amount of GHO they want to mint, all while earning interest on the underlying stablecoin. In other words, users have to allocate an overcollateralised supply in order to mint the GHO.

Shortly after the Aave DAO approval was announced, user activity on the Aave network rose to a new 2022 high:

Not Your Average Stablecoin

GHO differs from algorithmic stablecoins, whose business model solely relies on two key factors to maintain parity with a fiat currency: algorithmic mechanisms and the supply and demand of investors. But they are not really backed by any kind of reserves.

Terra was the most popular algorithmic stablecoin that stormed the market throughout 2021 and early 2022. After the protocol crumbled in May, wiping over US$60 billion from the market and spreading contagion to other stablecoin protocols, Terra launched Terra 2.0 in a bid to revive the ecosystem.

Categories
ETFs Kucoin NFTs

KuCoin Becomes First Exchange to Offer NFT ETFs

Popular crypto firm KuCoin has become the first centralised exchange to launch a non-fungible token exchange-traded fund (ETF), as per a recent announcement.

KuCoin has partnered with Fracton Protocol to launch Trading Zone ETF, and it aims to increase liquidity to the exchange’s more than 20 million users and lower the investment threshold for these assets:

KuCoin Going All Out on NFTs Despite Market Downturn

The ETF will offer investors exposure to blue-chip NFTs that can be directly purchased with Tether (USDT). As such, the ETF is made up of five popular NFT collections including BAYC (hiBAYC), CryptoPunks (hiPUNKS), Koda NFTs (hiKODA), hiSAND33 and hiENS4.

We are very excited to become the first centralised crypto exchange to support NFT ETFs that allow users to conveniently invest and trade top NFTs directly with USDT. In the future, KuCoin will keep exploring more NFT-related products for our users.

KuCoin blog post

KuCoin has been working on developing several NFT-related products and services this year. In April, it launched two NFT launchpads, Wonderland and Windvane. The firm said it would continue to roll out more NFT and Web3-related features in the future.

While KuCoin is the first crypto exchange to launch an NFT ETF, FinTech firm Defiance was already one step ahead with the world’s first NFT ETF, launched on December 2 last year.

Categories
Crypto News Japan Metaverse

Japan’s Ministry of Economy Launches Web3 Policy Office

Japan’s Ministry of Economy, Trade and Industry (METI) has established a Web3 policy office within the Minister’s Secretariat in a bid to boost the importance of digital assets in the country.

According to an official announcement, the new Web3 office will help create better frameworks for Web3-related businesses by gathering information from key players in the industry and working with relevant parties toward developing a proper environment for Web3:

As metaverses become new personal interfaces, especially among younger generations such as Generation Z, digital spaces and assets could become much more important, and their business value could also increase dramatically.

METI blog post

Moreover, the Web3 office will bring together several departments responsible for industrial finance, taxation and corporate systems, as well as those responsible for media, digital content, sports, fashion and other industries.

Companies Betting Big on the Metaverse

Japan is one of the latest countries to enter the metaverse with its push to expand Web3 businesses and technology. Not so long ago, one of North America’s ‘Big Four’ accounting firms, KPMG, opened its first metaverse collaboration hub to examine potential use cases in several industries.

Despite a current bearish scenario for digital assets in general, companies and firms across different industries are still betting big on Web3. A week ago, Crypto News Australia reported that auction house Christie’s had established Christie’s Ventures, an investment fund for fintech companies looking to tap into the digital art market.

Categories
Crypto News NFTs Solana

Solana in Pole Position to Challenge Ethereum NFT Dominance, Report

Data from crypto platform Messari reveals that Solana (SOL) could become the biggest challenger to Ethereum’s NFT market dominance.

In a recent report by James Trautman from Messari, Solana’s network activity declined heavily in the second quarter of this year. However, daily activity has accelerated with over 7 million newly minted NFTs, a growth rate of 46.4 percent:

Solana new NFTs per month. Source: Messari

Solana Defies Market Downturn

The NFT market has been hammered by the crypto winter, with sales plunging over 90 percent since their January highs. But while Ethereum still commands over 80 percent of the market, Solana continues to gain traction in the industry, overthrowing other alternative layer-1 platforms:

Ultimately, Solana’s position in the NFT sector remains a strong component of its ecosystem despite a down market. It continues to be the second-largest protocol by secondary NFT sales volume, trailing only behind Ethereum.

Messari report

A boost for the Solana NFT ecosystem came with the announcement of OpenSea introducing its Solana launchpad to allow SOL-based NFT projects. The plan is to provide OpenSea users with a “multi-chain future” for NFTs.