We just had a bearish month for cryptocurrencies. The term “BitcoinBitcoin is the first decentralized digital currency. It was created in 2009, by an anonymous founder or group of founders... More dead” was very popular, but we’re still far from there. More regulations and changes for the market are coming. Let’s check then the most important news during June in the cryptocurrencyA digital currency running on a blockchain and built with cryptography. Contrary to central-bank issued currency, cryptocurrency issuance rules are... world.
On the markets
- Bitcoin (BTCAn abbreviation for Bitcoin.) hit a low of $17,700 per coin, therefore, losing around 40% [CoinMarketCap]. Google searches for the term “Bitcoin dead” reached a new record amid the panic. The reasons behind the crash may include the rampant inflation in the United States and Europe, and the miners trying to recover from losses by selling their holdings.
- The whole crypto market capitalization lost around 26% in June. However, not all coins were bearish. Some top-100 coins stayed bullish during the blood bath: STORJ (+73%), SNX (+20%), BAT (+13%), UNI (+13%), SHIBA (+8%), and LINK (+8%) are included.
- Experts worldwide are warning about an upcoming global recession. A recent survey by the research firm Conference Board showed that over 60% of CEOs consulted expect the economy to go south by 2023. For the investment bank JP Morgan, the probability is as high as 85%. This event, of course, could hit or stall the crypto market temporarily.
- The DeFi market is losing traction too, decreasing by over 22% [DeFiPulse]. This is probably due to the bearish market itself. We can also consider that over 21 DeFi platforms were hacked in June only. They amount to over $282 million in stolen funds [DeFiYield]. For its part, the Non-Fungible Token (NFT) market increased in market cap (+30%), despite a decrease in sales (-6%).
Regulations on crypto
- After the Terra (LUNA) crash, Japan approved specific legislation for stablecoins. Starting in 2023, the Japanese issuers of stablecoins should have proper licenses and reserves. Besides, they’re only accepting fiat-based stablecoins. Meanwhile, the UK Treasury is considering rescuing collapsing stablecoins, and the US could release its own legislation about it this year.
- Crypto exchanges in the Eurozone could lose their licenses “for serious breaches of AML/CFT rules”. The European Supervisory Authorities (ESAs) are planning to tight the measures to supervise these companies. On the other hand, the Spanish Treasury is aiming to register every cryptocurrency owned by its citizens, even outside the country. The reports must include personal data, balances (in EUR), types of coins, and yearly operations. This register could lead to taxes for holding cryptos, though.
- The U.S. bill “Responsible Financial Innovation Act (RFIA)” was introduced by Senators Cynthia Lummis and Kirsten Gillibrand. This law covers a great part of the crypto industry, including stablecoins, DAOs, exchanges, and miners. If approved, among other changes, stablecoin issuers should have 100% reserves, DAOs would pay taxes, and miners and validators won’t be considered brokers.
- The U.S. White House is studying the environmental impact of cryptocurrency mining. The RFIA also entrusts this study to the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). They’re not planning to ban crypto mining, but more regulations could be in the making. Far from there, Iran cut again the power for their licensed crypto miners, until further notice.
Hacks and security
- Over 21 DeFi platforms were attacked last month. They amount to over $282 million in stolen funds [DeFiYield]. The worst attacks include the protocols Arda and Maiar Exchange from the blockchainBlockchain is a type of database storing an immutable set of data, verifiable to anyone with access to it —through... Elrond (+$127 million and +$113 million stolen, respectively). The platform Wintermute was hacked by over $27 million in tokens Optimism (mostly turned back by the hacker), and the Bored Ape Yacht Club (BAYC) suffered its second attack in two months (+$276k stolen).
- The Harmony bridge to Ethereum (Horizon) was hacked for over $100 million. Other platforms involved with Harmony (such as Aave) are monitoring the situation to protect their own users. Meanwhile, the crypto lending company Celsius paused all the withdrawals “due to extreme market conditions”. They handle around 445,000 stETH tokens and 17,919 WBTC.
- Binance was accused of billionaire money laundering by Reuters, and the token BNB may face an investigation by the U.S. SEC. This crypto exchange also had technical issues that forced BTC withdrawals to be paused for hours. In addition, they announced that they won’t accept Litecoin (LTC) operations that use the privacy solution MimbleWimble.
- An exploit in old versions of the web3 walletA crypto wallet is a user-friendly software or hardware used to manage private keys. There are software wallets for desktop... MetaMask could lead to stolen private keys (and funds). Dubbed “Demonic”, the vulnerability can apply to every version before the 10.11.2 (released in March). It’s recommended to move the funds and update the software in case you have those versions. At the same time, other types of crypto-stealing malware are lurking around.
Other news
- Daily BTC mining revenue dropped by over 28% in June [Braiins]. Meanwhile, several governments and authorities are deciding to rise the energy prices for miners or apply more taxes to them. Those aren’t good news for miners: many of them have decided to disconnect their machines and sell their coins. As consequence, the hashrate (total Bitcoin power) may decrease and the transactionA cryptocurrency transaction is an entry on the blockchain ledger, noting sender, receiver and number of coins transacted. fees may increase.
- Tether Limited is planning to launch a new stablecoin pegged to the British Pound Sterling (GBP). The new coin, dubbed GBPT, will initially work on Ethereum from July 2022. To make this possible, they’re working with UK regulators. Besides, they’re also adding Tether (USDT) to the blockchain Tezos.
- A U.S. citizen sued Elon Musk and his companies Tesla and SpaceX for, allegedly, promoting the “pyramid scheme” Dogecoin (DOGE). Plaintiff Keith Johnson is asking for $258 billion in damages since they consider that Musk “was aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading”. Musk denied this accusation.
- The Japanese film studio Noma will produce three animated featured films about crypto. The first one, titled “Rhetoric Star”, is already in production and set to release in 2024. Taichi Ito, the founder of Noma and a producer of the series, considers this a new way to learn about the decentralized world.
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