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Latest Crypto News: Bill Gates Slams Crypto and NFTs, Crypto Hedge Fund Three Arrows Capital Faces Potential Insolvency Amid Crypto Crash, Coinbase Lays Off 18% of Workforce

Photo to accompany story about crypto news. Robert Nickelsberg/Getty Images
Cryptocurrency exchange Coinbase just laid off 18% of its workforce amid recession fears.
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It’s been a tumultuous year for investors, but it’s been even more so for those with a stake in crypto.

Bitcoin’s price has dropped by nearly 70% from its all-time high of $68,000 at the start of the week — to its lowest level in 18 months. Ethereum followed bitcoin’s lead and so did just about every other cryptocurrency.

The crypto market, which has been tracking with the stock markets lately, has been a casualty of the broader market selloff of risky assets as investors wrestle with high inflation, the war in Ukraine, and shifts in U.S. monetary policy. Although not usually correlated to stocks, the crypto and stock markets are rising and falling in similar patterns.

Crypto lender Celsius’ announcement Monday that it’s freezing its withdrawals due to “extreme market conditions” made matters even worse for the fragile crypto market. Crypto hedge fund Three Arrows Capital may also be in trouble amid swirling rumors that the company is insolvent following the market collapse.

And some experts are warning the worst may be yet to come — and bitcoin’s price, as well as other cryptocurrencies, could drop even further.

“Sometimes bear markets can last up to several months,” Charlene Fadirepo, a crypto expert and founder of Guidefi, recently told NextAdvisor during an Instagram Live. “Some people track the 20-week average for bitcoin, and according to that, that gets us in the $20,000 to $30,000 range. I don’t know where it’s going to go, but based on past trends, we’ve been in that range.”

The big crypto market crash is just the latest reminder for investors that crypto assets come with extra risk and volatility, especially in times of economic and political uncertainty like we’re in now. Either way, experts advise not to make financial decisions based on news-related panic or hype. Here’s what investors should make of the latest crypto news:

  • Bill Gates, one of the richest people in the world and a well-known critic of crypto, has once again slammed the industry, saying crypto and NFTs are “100% based on greater fool theory.” During a TechCrunch talk on climate change Tuesday, the billionaire Microsoft implied that crypto and NFTs are overvalued assets and sarcastically joked that “expensive digital images of monkeys” would “improve the world immensely.” During the talk, Gates said he’s “not involved in that” and “not long or short any of those things,” referring to crypto and NFTs. The comments come amid a tumultuous week for crypto, with bitcoin dipping below $21,000 and ethereum falling below $1,100 Wednesday.
  • Rumors began to swirl Tuesday that a major crypto hedge fund could become insolvent following the crypto market crash this week. Dubai-based crypto fund Three Arrows Capital, popularly known as 3AC, is allegedly attempting to figure out how to repay lenders and other counter-parties after it was liquidated by crypto lending firms in the space, according to a BlockFi report. Co-founder Su Zhu took to Twitter Tuesday evening to address the rumors but didn’t give specifics, stating the firm is “in the process of communicating with relevant parties and fully committed to working this out.” This comes shortly after crypto lender Celsius announced it is pausing its withdrawals, spurring concerns of potentially another crash in the crypto market.
  • Coinbase, the largest crypto exchange in the U.S., announced it is laying off 18% of its workforce amid a collapse in the crypto market. Coinbase CEO Brian Armstrong said managing the company’s expenses right now is critical to “operate in this highly uncertain period in the world,” referring to the possibility of a recession and a “crypto winter,” according to a post published on Coinbase. Crypto winter is when prices fall and remain low for an extended period, such as they did between early 2018 and mid-2020. But Coinbase isn’t the only crypto firm that has announced job cuts and experts are warning that it’s just the beginning, according to a TIME report. Crypto lender BlockFi on Monday said it was reducing its headcount by about 20%, and Crypto.com announced last week that it’s laying off around 260 workers, or around 5% of its workforce.
  • Celsius, a major crypto lender, announced at the start of the week that it’s pausing withdrawals “due to extreme market conditions,” according to a company memo. As of May, Celsius has lent out more than $8 billion to customers and has almost $12 billion in assets. The announcement comes amid a meltdown in the crypto and stock markets, fueling concerns about Celsius’ solvency. The crypto firm has not yet said when it will resume withdrawals.

Bitcoin is the largest cryptocurrency by market cap, and a good indicator of the crypto market in general, since other coins like Ethereum (and smaller altcoins) tend to follow its trends. Even though Bitcoin recently set another new all-time high, it was a pretty normal uptick for the crypto, which is notorious for its volatility. That’s not to say investors should take swings in either direction lightly, and this is also why investing experts recommend not making any major investment changes based on these normal fluctuations.

Cryptocurrency is still very new, and everything from innovation to regulation can have an outsize impact for investors. Here’s how you can invest smartly, regardless of what’s making news or Bitcoin’s price swings.

What You Should Know About Crypto Investing

Cryptocurrency is a highly volatile, speculative investment. Only invest in crypto what you’re prepared to lose, and make sure you have other financial priorities in place first: save money in an emergency fund, contribute to retirement savings, and pay off any high-interest debt balances.

How Investors Should Deal With Volatility

Cryptocurrency volatility is nothing new, and you should be comfortable with this if you decide to invest. 

Volatility can be attributed to an “immature market,” says Ollie Leech, learn editor at Coindesk, a cryptocurrency news outlet. Anything from a celebrity tweet to new federal regulation can send prices spiraling. 

“If Elon Musk puts hashtag bitcoin in his Twitter bio, it sends Bitcoin up 10%,” says Leech. 

This unpredictability is part of the reason why investing experts warn against investing huge amounts of your portfolio into a risky asset like crypto. Many recommend keeping your crypto holdings to less than 5% of your total portfolio

For new investors, day-to-day swings can seem frightening. But if you’ve invested with a buy-and-hold strategy, dips are nothing to panic about, says Humphrey Yang the personal finance expert behind Humphrey Talks. Yang recommends a simple solution: don’t look at your investment. 

“Don’t check on it. That’s the best thing you can do. If you let your emotions get too much into it then you might sell at the wrong time, make the wrong decision,” says Yang.

This is the traditional “set it and forget it” advice that many traditional long-term investors follow. If you can’t get on board, and the extreme dips continue to cause you worry, then you might have too much riding on your cryptocurrency investments

“The most important thing any investor can do, whether they are investing in bitcoin or stocks, is not just to have a plan in place, but to also have a plan they can stick with,” says Douglas Boneparth, a CFP and the president of Bone Fide Wealth. “While buying the dip might be attractive, especially with an asset that you really like, it might not always be the best idea at the moment.”

Top Crypto News From Recent Months

President Joe Biden signs crypto executive order

President Joe Biden signed an executive order on cryptocurrency, marking the first concrete steps by the White House to regulate digital currency. The executive order outlines what government agencies, including the Treasury Department, need to do to develop policies and regulations on cryptocurrencies. It also calls on U.S. agencies to make sure the country’s cryptocurrency laws align with those of U.S. allies, and tasks the Financial Stability Oversight Council to investigate any illicit financial concerns. Additionally, the order puts new urgency on the possibility of a new government-issued central bank digital currency.

Cryptocurrency stars in Super Bowl ads

Cryptocurrency made a splash at the Super Bowl this year, with multiple cryptocurrency exchanges airing ads. The crypto ads captured America’s attention, but not everyone loved them. Senate Banking Chairman Sherrod Brown blasted them during a senate committee hearing last week, saying the ads lacked transparency and “left a few things out.” The hearing was another government meeting on stablecoins, where U.S. lawmakers echoed similar past sentiments about how more regulation is needed.

New York Stock Exchange wants to get in on NFTs

The New York Stock Exchange, the world’s largest stock exchange by market capitalization, wants to be the marketplace for NFTs just like with stocks. The exchange filed an application with the U.S. Patent and Trademark Office to provide an online marketplace for digital goods including NFTs, cryptocurrencies, digital media, and artwork. If the exchange’s plan comes to fruition, it would compete with other popular NFT marketplaces like OpenSea and Rarible.

Colorado will accept crypto for tax payments

Colorado Governor Jared Polis announced that the state will begin accepting crypto payments for taxes and other state-related transactions by the end of summer. Polis said during an interview with CoinDesk that Colorado will partner with crypto companies to effectively accept and convert Bitcoin into U.S. dollars. “We don’t want to take the speculative risk of holding crypto, so we will have a transactional layer there and it will be entered in our system as dollars,” he says. “For consumer convenience, we want to accept payment in a wide variety of cryptocurrencies, just as we do with credit cards.”

Proposed legislation weighs in on stablecoins

New Jersey Rep. Josh Gottheimer unveiled an early draft of legislation that would place clear definitions around U.S. dollar-backed stablecoins. The proposed legislation would designate certain stablecoins as “qualified,” making them redeemable on a one-to-one basis for U.S. dollars, and institute traditional deposit insurance on stablecoin holdings. The bill also states that qualified stablecoins would only be issued by banks or non-bank institutions that satisfy certain regulations.

JP Morgan enters the metaverse

JP Morgan has officially entered the metaverse, opening a lounge in Decentraland, a virtual world based on blockchain technology. The “Onyx lounge” was unveiled along with a report from the bank outlining “limitless” opportunities for businesses in the metaverse and why there is “explosive interest.” JP Morgan is the largest bank in the U.S. and the first to participate in the metaverse.

Coinbase partners with Mexico for withdrawals

Coinbase announced it’s launching a service that allows cryptocurrency recipients in Mexico to cash out their funds in pesos. The service will be offered at over 37,000 locations across the country, free of charge through March 31, after which customers will be charged a “nominal fee that’s still 25-50% cheaper” than traditional international payment options, according to a Coinbase blog post. Cryptocurrency has drawn interest for cross-border payments and money transfers, because of its potential as a faster and cheaper method to transact compared to more traditional options.

Meta scraps stablecoin project

Mark Zuckerberg’s plan to launch stablecoin project Diem has hit a dead end. Meta, formerly branded as Facebook, announced this week it sold its assets and intellectual property to crypto bank Silvergate Capital. The bank paid $182 million for the project, according to a press release. Though Meta is no longer involved in the project, Diem CEO Stuart Levey said in a press release he has “confidence in Silvergate’s ability to take Diem’s technology forward.” In the press release, Silvergate CEO Alan Lane said they plan to launch a stablecoin by 2022.

India announces digital currency

India announced plans this week to launch a digital version of the rupee and place a 30% tax on income from digital assets as soon as this year. It’s the latest major economy to announce an official virtual currency, as China trials the digital yuan and other countries, including the U.S., continue to explore the idea. According to a Chainanalysis report, India is one of the fastest-growing markets for cryptocurrency, though it has had a hot-and-cold relationship with it. In 2018, it effectively banned crypto transactions, but the Supreme Court struck down the restriction in March 2020.

White House prepares government crypto strategy

Bloomberg reported the White House is planning to release an initial government-wide strategy for crypto and other digital assets as soon as next month, and will ask federal agencies to assess their risks and opportunities. Bloomberg cited people familiar with the matter, saying senior administration officials are holding several meetings and drafting an executive order that will be presented to President Joe Biden in the coming weeks. The report suggests the Biden team is facing pressure to take the lead on the issue since federal agencies have so far taken a scattered approach.

Tech companies explore NFTs

Large tech companies continue to explore and integrate NFT technology into their services. Last week, Twitter became the first major social media platform to introduce NFT-based profile pictures. This new feature comes with limitations, however. To have a NFT profile picture, you’ll need to have bought or minted an NFT on an Etherum-based marketplace first.  You also need a Twitter Blue subscription, and an iOS device to set an NFT as your profile picture, which appears in a hexagonal shape. A lot of people, including Elon Musk, have taken to Twitter to express their frustrations with the new feature. In a tweet Musk said, “Twitter is spending engineering resources on this bs while crypto scammers are throwing a spambot block party in every thread!?”

Fed releases long-awaited crypto report

The Fed released a long-awaited report exploring the pros and cons of government-issued crypto, but ultimately took no position on the matter. Instead, they’re asking the public to weigh in. Through May 20, 2022, the Fed is asking Americans to provide public comment on the possible rollout of a digital dollar. A central bank digital currency (CBDC) would essentially be a digital form of cash, issued and backed by America’s central bank. The U.S. isn’t the only country exploring or launching its own CBDC. Central banks all over the world, from China to Sweden, are experimenting with the adoption of digital currencies.

Walmart could be entering metaverse

Walmart may be quietly entering the metaverse with the intent to make and sell virtual goods. It has plans to create its own cryptocurrency and collection of NFTs, according to several applications filed with the U.S. Patent and Trademark Office last month. The retail giant is the latest corporate player to show interest in crypto and the metaverse, which can potentially lead new revenue streams for retailers.

Crypto.com suspends withdrawals

Crypto exchange Crypto.com suspended withdrawals on its platform last week after there were reports from a “small” number of users of “suspicious activity.” The Singapore-based firm made the announcement via Twitter, adding that all funds were safe. After several hours, the exchange issued an update saying users were required to sign back into their accounts and reset their two-factor authentication. Technical issues and widespread outages on crypto trading platforms are nothing new. Over the last year, similar situations have occurred with crypto exchanges Coinbase, Binance, and Kraken.

Major banking group sees a future for crypto

Rob Nichols, president of American Bankers Association, a major U.S. banking trade group, said in a recent blog post that crypto isn’t “going away” and banks are exploring ways to “safely and responsibly” introduce crypto service for customers. It’s further proof that crypto is becoming more mainstream among investors. But in order for there to be more mainstream adoption of crypto, banks need “regulatory clarity,” said Nichols.

North Korean hackers steal $400 million in crypto

Nearly $400 million worth of digital assets were stolen by North Korean hackers, according to a Chainalysis report published recently. Ether accounted for most of the stolen funds, followed by altcoins, ERC-20 tokens, and Bitcoin, according to the report. According to Chainanalysis, security researchers believe many of last year’s attacks were carried out by a group labeled as advanced persistent threat 38 (APT38), also known as Lazarus Group.

Banks team up to create stablecoin

Several U.S. banks are joining together to offer their own stablecoin, which they’ll call USDF, according to a press release. Founding members of this new stablecoin include New York Community Bank, FirstBank and Sterling National Bank — all FDIC-insured institutions. USDF is an alternative to non-bank-issued stablecoins, such as Tether, and will be minted exclusively by U.S. banks. According to the release, USDF “addresses the consumer protection and regulatory concerns of non-bank issued stablecoins and offers a more secure option for transacting on blockchain.”

FTC warns of “new spin” on crypto scams

The Federal Trade Commission is warning consumers about a “new spin” on crypto scams. The U.S. consumer protection agency says scammers are calling people pretending to be from the government, law enforcement, or a local utility company and luring people to send them money through cryptocurrency ATMs. The FTC’s warning comes in the midst of rising cryptocurrency crimes. In 2021 alone, scammers took $14 billion worth of crypto, according to a recent report from blockchain data firm Chainalysis.

PayPal considers launching stablecoin

PayPal may launch its own stablecoin as it grows its footprint in the crypto sector, CoinDesk reported. A PayPal spokesman told CoinDesk in an emailed statement that the company is “exploring a stablecoin,” and will work closely with regulators if they move forward with the idea. PayPal has been actively growing its crypto business recently, increasing the amount of crypto its customers can purchase, as well as investing in educating its users on crypto and working to allow them to withdraw their crypto safely to third-party wallets.

Binance CEO has $100 billion net worth

Changpeng “CZ” Zhao, CEO of crypto exchange Binance, has an estimated net worth of nearly $100 billion, according to new calculations from the Bloomberg Billionaires Index published. In terms of wealth, that puts him in the company of Facebook founder Mark Zuckerberg and Google founders Larry Page and Sergey Brin. The Binance coin makes up the “majority” of his net worth, according to an interview with the Associated Press last November.

Scammers stole $14 billion worth of crypto in 2021

Scammers took a record $14 billion worth of cryptocurrency in 2021, up from $7.8 billion in 2020, according to blockchain data firm Chainalysis’ 2021 “Crypto Crime Report.” While that’s a big jump in criminal crypto activity, the widespread adoption of crypto by legitimate individuals and institutions actually pushed the total percentage of illicit cryptocurrency transaction volume as low as it’s ever been, the report says.

Crypto becomes legal in Ukraine

Ukrainian President Volodymyr Zelenskyy signed into law a bill that legalizes crypto in the country, Bloomberg reported. This move by Zelenskyy comes amid a sudden increase of crypto donations to support the country’s defense against a Russian invasion. Along with conventional military aid, Ukraine has received more than $60 million in crypto donations since the war started, according to research from blockchain analytics firm Elliptic.

U.S. Labor Dept warns about crypto investments in 401(k) plans

The U.S. Department of Labor recently warned employers that offer 401(k) plans with cryptocurrency investment options, such as Bitcoin and other digital assets like non-fungible tokens, to “exercise extreme care.” According to the labor agency, it has become aware of financial services companies marketing crypto investments as retirement-plan options in recent months, and “has serious concerns.” The agency said crypto investments present “significant risks and challenges” to 401(k) investors, including fraud, theft, and financial loss.

Japan asks crypto exchanges to stop Russian transactions

The Japanese government asked crypto exchanges earlier this week to stop transactions with Russian and Belarusian organizations and individuals sanctioned following Russia’s invasion of Ukraine, Reuters reported. The move by Japan came after the Group of Seven leaders — which includes Canada, France, Germany, Italy, Japan, United Kingdom, and the United States — came to an agreement together that Russia could not leverage digital assets as a means of evading sanctions. According to the report, crypto exchanges who don’t comply could be fined as much as 1 million yen, which is equivalent to roughly $8,500, and executives could face up to three years in prison.

Ethereum burns $6 million worth of its own coin

Ethereum is intentionally destroying a portion of its own coin supply. The platform has cut down on 65% of the new issuance of its currency since last August, according to Watch the Burn, an Ethereum data dashboard. That’s nearly $6 billion worth of Ether burnt, destroyed, and taken out of circulation. It’s part of a multifaceted strategy to upgrade the blockchain network to its Consensus Layer, previously known as Ethereum 2.0, while also reducing the amount of money that crypto miners can make from each transaction.

Crypto investor Katie Haun raises $1.5 billion

Crypto investor Katie Haun raised $1.5 billion for her newly launched, crypto-focused venture firm. It’s the largest initial fund ever raised by a solo venture capitalist, let alone by a solo female VC, according to Pitchbook. The move also reflects surging investor interest in Web3, which is typically described as the next iteration of the internet based on blockchain technology.

Goldman Sachs makes first OTC crypto transaction

Goldman Sachs made the first over-the-counter crypto transaction by a major bank in the U.S. The bank traded a Bitcoin non-deliverable option, a derivative tied to Bitcoin’s price that pays out in cash, with crypto bank Galaxy Digital this week, according to a press release. It’s a big step in the development of crypto markets for institutional investors.

New SEC crypto initiatives

The Securities and Exchange Commission (SEC) Chairman Gary Gensler announced several initiatives to expand investor protections in the crypto market, including registering and regulating crypto exchanges, possibly separating out asset custody, and partnering with the Commodity Futures Trading Commission to address platforms trading crypto-based security tokens and commodity tokens.

United Kingdom NFT

The United Kingdom announced it will launch its own NFT, or non-fungible token, in effort to the lead the way in cryptocurrencies. U.K. Finance Minister Rishi Sunak has asked the Royal Mint to create and issue the NFT by the summer, according to a U.K. government press release. NFTs broke through into the mainstream in 2021, and have explored in popularity. Total NFT sales hit $25 billion in 2021, compared to $94.9 million the year before, according to data collected by DappRadar, an app store for decentralized applications.

Terra adds $100M AVAX to its UST

Terraform Labs, which created the crypto tokens LUNA and stablecoin TerraUSD (UST), announced it added $100 million worth of Avalanche (AVAX) to its UST stablecoin reserve. Avalanche, a blockchain that completes with Ethereum, is the second major asset added to the UST reserve after Bitcoin. In an interview with Bloomberg, Terraform Labs founder Do Kwon explained that they chose Avalanche over Ethereum due to its “rapid growth and vast fan base.”

$600M Axie Infinity hack

Ronin Network recently lost roughly $615 million in Ethereum and USD Coin to hackers, according to a blog post. It is the largest decentralized finance, or DeFi, hack to date as it surpasses the $611 million hack of the DeFi protocol Poly Network in August 2021. Ronin Network powers the popular blockchain game Axie Infinity, which lets users earn money as they play.

Coinbase NFT marketplace

NFT enthusiasts will have another marketplace to trade their digital collectibles. Coinbase, the latest crypto exchange in the U.S., just launched its own NFT marketplace in beta mode. During this period, a small set of beta testers will be able to create a Coinbase profile to buy and sell NFTs using any wallet. Sanchan Saxena, vice president of product at Coinbase, said in a blog post that there won’t be transaction fees, but that the platform will eventually add fees, which will be “in-line with Web3 industry standards.”

Blockchain.com may IPO

Crypto exchange Blockchain.com is interviewing banks for an initial public offering (IPO), and may go public as soon as this year, Bloomberg reported. The exchange recently reached a valuation of $14 billion, and was picked by the Dallas Cowboys for the NFL’s first crypto sponsorship. According to the report, the IPO might not happen till 2023 and its plans could still change.

Ethereum update delayed

Ethereum’s massive software upgrade, also known as the “the Merge,” won’t happen in June as expected, according to Ethereum developer Tim Beiko. Beiko tweeted on April 11 that “the Merge” won’t happen in June, and followed up with another tweet on April 12 saying it would take a few more months. The shift from proof-of-work to proof-of-stake will change how transactions on Ethereum are ordered, making it more efficient and sustainable for widespread use.

Fidelity exposes 401(k) investors to Bitcoin

Fidelity Investments announced last week it will begin offering a bitcoin investment option for its 401(k) plans. However, employers will have the autotomy to decide whether or not they roll that investment option out to their employees, and there will be a limit on how much of a 401(k) plan can be invested in bitcoin – no more than 20%. Fidelity is the first major retirement account provider to allow investors to add bitcoin in their 401(k) plans.

Coinbase NFT marketplace

Coinbase announced in April that it was launching an NFT marketplace in beta mode, allowing only a small set of users to test out the platform. Now, Coinbase is opening its beta NFT marketplace to all users, allowing anyone to buy, sell, or trade non-fungible tokens, just two weeks after its initial launch. A spokesperson for Coinbase said additional marketplace features are “still to come,” and Coinbase will “disclose details at a later date.

SEC comments on crypto exchanges

Securities and Exchange Commission chair Gary Gensler said last week that crypto exchanges are sidestepping rules and may be “trading against their clients” in an interview with Bloomberg. According to Gensler, many of the largest cryptocurrency exchanges don’t separate their custody, market-making, and trading services like traditional exchanges do. The “commingling” of services could be problematic for clients’ interests, he says. Gensler also criticized stablecoins by pointing out that the three largest are all controlled by or have connections to major crypto exchanges. “I don’t think that’s a coincidence,” Gensler said during the interview.

Mike Novogratz on Terra crash

Mike Novogratz, CEO of crypto bank Galaxy Digital, billionare investor, and avid supporter of the Terra ecosystem, broke his silence Wednesday and shared his thoughts on last week’s dramatic crash of UST and Luna, its sister crytocurrency. In a public letter, Novogratz said Galaxy had invested in Luna at the end of 2020 using balance sheet capital because it had “significant growth potential,” but that it was ultimately “a big idea that failed.” Novogratz said that the global macro backdrop has been “brutal for all risk assets” in 2022, which ultimately put pressure on Luna and the reserves held to back UST. The downward pressure on reserve assets coupled with UST withdrawals, he said, triggered a stress scenario akin to a “run on the bank,” and the reserves weren’t enough to prevent UST’s collapse. Novogratz also addressed the future of crypto in the letter, saying “crypto is not going away” and that it will take “restructuring, a redemption cycle, consolidation, and renewed confidence in crypto” before the market goes back up.

CFTC signals increased crypto enforcement

The Commodity Futures Trading Commission (CFTC) hinted that it plans to increase enforcement and its resources to combat a growing number of digital asset fraud and manipulation cases, the Wall Street Journal reported. Agency Chairman Rostin Behnam said Wednesday at a conference that the agency has filed more than 50 enforcement actions related to digital asset activity since 2015, and more than half of those cases involved allegations of fraud. The issue has been a hot button topic among lawmakers and regulators, with some aruging the Securities and Exchange Commission (SEC) should police fraudulent and manipulative crypto schemes instead of the CFTC.

Gamestop crypto wallet

Gamestop wants to help the world of Web3 leap into the mainstream. The world’s largest gaming retailer just launched the beta version of a new crypto wallet that allows customers allow customers to store, send, receive and use crypto and NFTs across decentralized apps without having to leave their web browsers. It’s a self-custodial Ethereum wallet extension, similar to the crypto wallet launched last week by trading app Robinhood, that can be downloaded from the Chrome Web Store.

ECB President says crypto is worthless

Cryptocurrencies are worthless, according to European Central Bank President Christine Lagarde. In an interview with Dutch talk show “College Tour” that aired Sunday, Lagarde went into detail about how crypto’s value is “based on nothing” and “there is no underlying asset to act as an anchor of safety.” She also called on policymakers and regulators to establish rules to protect investors, particularly inexperienced ones who may be more at risk. The crypto market has been under more regulatory pressure since the collapse of TerraUSD.

Luna token relaunch

The Terra community recently voted to relaunch a new version of its collapsed luna token, but not UST — the sister stablecoin that lost its 1-to-1 ratio with the dollar earlier this month. The newly revived token is currently trading on several exchanges including Bybit, Kucoin, Huobi, and Binance. However, the new token — which investors are calling Terra 2.0. — is already off to a bad start. After reaching nearly $20 on Saturday, luna dropped as low as $4.39 within a few hours, according to CoinMarketCap data. It has since settled at a price of around $8.70.

Terra community burns tokens

In a last-ditch effort to save the Luna token, hardcore Luna investors — dubbed on social media as “LUNAtics” — are volunteering to destroy their own tokens. It’s called burning in the crypto world, with the idea being that if you partially deflate the supply then the price will rise. But Do Kwon, the creator of Luna and TerraUSD is warning Luna holders on Twitter that it’s not a good idea, though he posted the address of the burn wallet. Luna holders can “burn” their tokens in the wallet address he shared, never to be seen again. “Why would you do this. Literally burning money,” Kwon tweeted on Saturday. The Luna token collapsed in value earlier this month after the algorithmic stablecoin it backed, TerraUSD, de-pegged from the dollar — rocking the broader crypto market.

Binace venture capital fund

The world’s largest crypto exchange is launching its own venture capital fund. Binance’s venture arm Binance Labs announced it has raised $500 million to invest in companies building “Web 3,” securing capital from institutional firms DST Global Partners and Breyer Capital as well as other unnamed equity funds, family offices, and corporations that are limited partners. Web 3 is typically described as the next iteration of the Internet based on blockchain technology. Binance’s new investment fund comes at a time when the crypto market is struggling at large, with bitcoin and most cryptocurrencies down sharply since the start of the year.

Potential crypto legislation

Two U.S. senators revealed legislation aimed at regulating cryptocurrencies and other digital assets. The bill takes a “light touch” approach to crypto regulation, proposing tax benefits for crypto users, stablecoin regulation, conducting studies on crypto’s impact on the environment and 401(k) plans, and granting the Commodity Futures Trading Commission (CFTC) control over enforcing crypto regulation. However, it’s unclear whether the bill proposed by New York Democrat Kirsten Gillibrand and the Wyoming Republican Cynthia Lummis could pass through Congress ahead of midterm elections. The legislation comes at a tumultuous time for the crypto industry. Just last month, the crypto market experienced one of its worst downturns and two major tokens — TerraUSD stablecoin (UST) and luna —collapsed.

SEC’s investigation into Binance

The U.S. Securities and Exchange Commission (SEC) has started investigating whether Binance — the world’s largest crypto exchange — sold unregistered securities during its initial coin offering roughly five years ago, according to a Bloomberg report. Binance’s ICO is one of many the SEC is looking further into, which is the cryptocurrency industry’s equivalent to an initial public offering (IPO). Binance has been facing additional federal scrutiny over the last few months, with separate SEC probe into alleged ties between its founder and two trading firms. Reuters also published an investigative report Tuesday that alleges Binance has been a conduit for the laundering of over $2 billion in illicit funds over the last five years.

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