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The price of bitcoin has dropped below $50,000 again while $2 billion worth-of crypto futures long positions have been liquidated over the past hour.

Data shows that the price started to plunge around 22:00 UTC time on Wednesday and dropped to as low as $46,000 on Coinbase Pro. It has quickly bounced back to around $51,000 as of press time.

Meanwhile, data from Bybt shows that around $2 billion in crypto futures long positions have been liquidated in the last one hour with $1.12 billion of them coming from BTC.

Indeed, the broader crypto market is also seeing significant drops over the past 24 hours, according to CoinGecko. The top ten cryptocurrencies by market cap are all falling with 5% to 17% drops with Dogecoin leading the plunge.

The Shiba Inu meme-coin is now changing hands at $0.4, down 40% from its recent high above $0.7. Shib, the other Shiba meme-coin that was hailed as a rival of Dogecoin, has also plunged by 30% within the past 24 hours to $0.00001853, which is down more than 50% from its recent high amid a Dog coin phenomenal over the past week.

The market’s price reaction also came shortly after Elon Musk tweeted that Tesla will stop taking bitcoin for electrical car payments due to environmental concerns.

Musk said in a tweet on 22:06 UTC on Wednesday that Tesla is concerned about the “rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal.” 

The suspension announcement came just less than two months after Musk confirmed on Twitter that Tesla was going to accept bitcoin as a payment option.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Tesla CEO Elon Musk posted a tweet Wednesday evening announcing that Tesla will suspend vehicle purchases using bitcoin due to concerns over the environmental impact of the cryptocurrency.

“We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” read the statement.

The electric car maker began taking bitcoin for payment in March, just over a month after it disclosed in an SEC filing that revealed a purchase of $1.5 billion worth of bitcoin. Last month, its earnings report for the first quarter of 2021 revealed that Tesla had sold $272 million worth of its bitcoin holdings.

“Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy,” the new statement reads. “We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.”

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

On May 12, the Diem Association announced that it was abandoning its plans to register with Swiss financial watchdog FINMA and will be returning to the U.S.

In addition to the relocation, Diem says it will register with the U.S. Financial Crimes Enforcement Network (FinCEN) and will partner with Silvergate Bank as an issuer for its long-awaited U.S. dollar-backed stablecoin.

Diem did not specify where in the U.S. it seeks to set up shop and declined The Block’s request for comment when reached. CNBC reported that its new headquarters will be in Washington, D.C. Silvergate is based in California. 

Despite the announcement of a partnership from Diem, Silvergate wrote that “[b]oth organizations are continuing to prioritize technological and operational readiness for a pilot, as the parties finalize the terms of a definitive agreement.”

Still, technological readiness hasn’t been the major factor standing in the way of launching. The move to the U.S. comes after two years of wrangling with U.S. regulatory concerns. 

When Facebook initially announced Diem, then called Libra, back in early 2019, the Association’s base in Switzerland was one of a list of concerns that U.S. regulators had regarding the project’s intentions. Congress brought in first David Marcus and then Mark Zuckerberg in to testify on the project. 

The Libra Association then moved to hire an executive team stocked by Treasury and Department of Homeland Security officials, underwent a rebrand, and downsized its ambitions from a global coin backed by a “basket of currencies” to the USD-backed stablecoin that forms the core of its proposed network.

More recently, Diem has continued to emphasize its desire to work with regulators, including partnering to form the technological backbone of central bank digital currencies. 

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Ethereum creator Vitalik Buterin sold large amounts of three meme tokens on Wednesday that he was given for free.

Buterin then used proceeds of the sales to support a range of charities, according to public blockchain data.

Buterin was given the tokens through a rather unusual token distribution strategy. The developers behind at least three dog-themed tokens — based around the Shiba Inu breed of dog — decided to send half of their tokens to his publicly known Ethereum address. These tokens included Shiba Inu (SHIB), Akita Inu (AKITA) and Dogelon Mars (ELON).

The theory behind this was that the approach was akin to burning the tokens. Presumably, the idea was that Buterin — who owns 333,500 ETH worth around $1.3 billion — wouldn’t need the cash and would just sit on the tokens. Shiba Inu’s website stated that the tokens sent to him were “burned,” and that everyone has to buy the tokens on the open market (as opposed to the team owning a large supply from the get-go).

Buterin appears to have had other ideas, however. Starting a few hours ago, Buterin began sending the tokens in batches to Uniswap and selling them for ETH. He sold 660 billion SHIB, 140 billion AKITA and 43 billion ELON — and also removed 13,291 wrapped ETH in liquidity from Uniswap — creating a total of 15,719 ETH, an amount worth about $63 million. 

Such dog-themed meme tokens have taken off recently, following Dogecoin’s rapid rise over the last few months. A common theme is that they are built around similar memes but the tokens tend to have much larger supplies (in the quadrillions of units). With recent exchange listings, some of the tokens have seen their prices jump sharply, with one SHIB token holder turning $17 into $5.9 million in under a year.

Yet Buterin’s market moves have significantly impacted the prices of the three tokens. As of the time of writing, Shiba Inu is down 30%, Akita Inu is down 50% and Dogelon Mars is down 73% over the past twenty-four hours.

Buterin gives the spoils to charity

Following the sales, Buterin sent large amounts of ETH to various charities that support different causes. He gave out more than 16,000 ETH along with some of the dog-themed tokens.

The largest tranche — 13,292 ETH — was sent to Givewell, a non-profit charity assessment organization.

The Ethereum creator also sent 1,000 ETH and 430 billion ELON tokens ($215,000) to the Methuselah Foundation, which focuses on making people live longer. He sent 1,050 ETH to the Machine Intelligence Research Institute, which focuses on ensuring AI has a positive impact.

Buterin sent 500 ETH and 10% of his SHIB tokens to Crypto Covid, a relief fund for India. He gave 500 ETH to Charter Cities, which looks to support charter cities around the world. 

He also gave 49 trillion AKITA to Ethereum-focused grants program Gitcoin. These tokens are fairly illiquid, so while they have a paper value of $443 million, right now they could only be sold for around $5 million on decentralized exchange Uniswap.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• The Block was able to access China’s new e-CNY wallet from inside the mobile app of the Industrial and Commercial Bank of China.
• A hands-on review shows that the e-CNY wallet is fully functional and can be used to pay for goods and initiate transactions.

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DeFi protocol xToken suffered an exploit on Wednesday, resulting in the loss of $24.5 million.

The entity behind the attack employed flash loans to steal a range of tokens and has already sold most of the tokens for ether (ETH).

xToken offers eight tokens, such as xSNXa and xBNTa, that offer exposure to returns from DeFi projects. They come in the form of Ethereum-based tokens that are wrapped around certain DeFi tokens, such as SNX and BNT. They give you some of the same benefits as the underlying token, such as staking rewards, but without having to leave the Ethereum ecosystem.

Flash loans are blockchain-based loans through which an amount of cryptocurrency is borrowed and repaid within the same transaction. They can be used to get access to large amounts of capital at a cheap rate because the crypto is repaid instantly (and if the transaction doesn’t go through, the money was never borrowed in the first place).

How did the attack happen?

The attack was carried out using two exploits, both targeting tokens in the xToken ecosystem. 

First, the entity responsible used a flash loan to borrow 61,800 ETH ($270 million). They used it to manipulate Kyber Network’s oracle — which connects its blockchain to real-world data — to mint lots of xSNXa tokens, which were then sold for ether and Synthetix (SNX).

Second, they found a weakness in the xBNTa contract. As a wrapped token, this token should only be minted using BNT tokens. The contract, however, failed to check this. So, they were able to use a different token to mint these xBNTa tokens, which they were able to sell. 

As The Block Research’s Igor Igamberdiev noted: “The attacker was smart enough (or close enough to this project) to use two different exploits for two projects’ tokens.”

The attacker made off with 2,400 ETH ($10.3 million), 781,000 BNT ($6.2 million), 407,000 SNX ($8 million) and 1.9 billion xBNTa tokens. All of the tokens have already been sold, except for the xBNTa, for a total of 5,600 ether ($24.5 million). 

The attacker paid 5 ETH ($21,900) in fees to carry out the attack. The fee was high because Ethereum transaction fees are based on the complexity of the transaction — and this was a very complex transaction.

xToken acknowledged the hack and promised additional information about the incident, tweeting: “We owe the community an explanation and will be providing another update shortly.”

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

FS Vector announced Wednesday that it has Melissa Netram, who most recently served as the chief innovation officer for the Commodity Futures Trading Commission.

FS Vector is a major tech lobbying firm with noted involvement in several well-known companies tied to happenings in the crypto space. It has worked with Ripple and Square, and also played a role in Facebook’s blockchain lobbying, as previously reported.

“I’m excited to join the talented professionals at FS Vector, whose expertise has made the firm a leader in advancing financial services policy. I look forward to utilizing my experience in financial services and fintech policy to provide the best outcome for the firm’s clients,” Netram said in a statement.

Netram left the CFTC in April, with former 0x senior council Jason Somensatto taking her place as acting director of LabCFTC, the agency’s fintech wing. In addition to being the leader of the CFTC’s fintech wing, Netram previously worked for Intuit, the firm behind TurboTax and Mint. She joins FS Vector as a partner. 

Alongside the change in administrations, a growing roster of former regulators has ended up working in policy related to crypto. Former CFTC Chair Chris Giancarlo recently joined BlockFi’s board and continues to helm the Digital Dollar Project alongside former LabCFTC director Daniel Gorfine.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Attrace, a startup that’s building a decentralized referral network, has raised $2.5 million in a seed extension round.

The round was led by Deribit founders, with participation from Coinstone Capital and other investors. Deribit founders contributed “a 7 digit” sum in Attrace, Deribit co-founder and CEO John Jansen told The Block.

With fresh capital at hand, Attrace is looking to grow its developer community and team, CEO Erwin Werring told The Block. Attrace’s current headcount is 17.

Founded in 2018, Attrace had a different proposition, focused on taking out middlemen in affiliate marketing. It then built its own blockchain, which is being used. But late last year, it realized that it needed a completely decentralized and trustless network for its offerings.

“We decided to deviate from our own blockchain and use components of it to develop the verifier nodes for the now-to-be-released Attrace Referral Network,” Werring told The Block.

The network aims to become “a referral standard for any tokenized asset on any blockchain in a tokenized economy,” said Werring.

Deribit’s Jansen told The Block that a trustless referral solution would be the answer to most problems in promotions. “As the Attrace team has deep experience and knowledge about blockchain and affiliate marketing, we had full confidence in Attrace being able to succeed in its mission of creating a trustless referral solution,” said Jansen.

Attrace’s network is expected to launch within the next one and a half months, said Werring, adding that its native token, ATTR, would also launch then.

When launched, the network is expected to help promoters, buyers, and sellers to execute promotions and sales via a decentralized network.

“Think of marketplaces that sell NFTs [non-fungible tokens] or DApps [decentralized applications] — they could surely use the help of promoters that would spread the word about the NFT sales or DApp’s service offering,” Werring told The Block.

Looking ahead, Attrace aims to become a decentralized autonomous organization, or DAO, to be entirely driven by its community, said Werring.

The seed extension round brings Attrace’s total funding to date to $3.7 million. The firm has previously raised $1.2 million in seed funding in 2018.

As for Deribit, Attrace was its first-ever investment, Jansen told The Block. The exchange operator also recently invested in decentralized crypto asset management solution Qredo.

Jansen said a third investment is also in the works. When asked if Deribit is looking to launch its own venture capital unit, Jansen said that’s not the plan at the moment, “though from time to time we might make new investments.”

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

An exchange-traded fund tracking 30 companies in the crypto market kicked off trading Wednesday on the New York Stock Exchange. 

Per an announcement by asset management firm Bitwise, the so-called Bitwise Crypto Industry Innovators ETF (ticket: BITQ) tracks the performance of firms including Coinbase, MicroStrategy, and Galaxy Digital. The index is weighted by market cap, with Coinbase ($COIN) making up the most of the fund’s weighting at 9.56%. 

Other constituents include mining firms like Riot Blockchain and Canaan. 

“Like e-commerce and mobile before it, crypto is a disruptive technology creating massive opportunities for new companies to emerge as winners,” Matt Hougan, CIO of Bitwise, said in a press statement. “Until recently, most great crypto innovators were private companies, but that’s changing rapidly. Today, there’s a growing set of public companies capitalizing on crypto, and more to come. BITQ aims to identify these businesses and give investors access.”

Crypto stocks have seen their performance flatten over the past month after a breakneck start to 2021. Coinbase—which went public on the Nasdaq in April—is down more than 8% since its listing day. 

A bitcoin ETF has yet to be approved by the Securities and Exchange Commission. As such fund hopefuls await approval, the list of wannabe issuers continues to grow, spanning firms like Anthony Scaramucci’s Skybridge and asset management giant Fidelity.

Bitwise had previously sought approval from the SEC to launch such a fund, but the firm withdrew its application with the SEC earlier this year.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Money transfer firm MoneyGram will now accept bitcoin with the help of crypto exchange Coinme. 

Users will now be able to buy the cryptocurrency and withdraw in cash at MoneyGram kiosks in the U.S. starting this week. There are plans to expand internationally in the back half of the year. 

The idea is to leverage MoneyGram’s peer-to-peer network to expand access to bitcoin and “potentially other digital currencies” by creating more access points, according to the announcement. There are only about 30,000 cryptocurrency kiosks in the U.S., and MoneyGram locations will now function as additional point-of-sale locations to buy and sell crypto.

Coinme will act as the proprietary exchange and provide its custody technology. The firm is the second-largest bitcoin ATM operator in the United States. It recently partnered with Coinstar, the kiosk manufacturer, to set up machines in grocery stores across the country.

MoneyGram previously partnered with Ripple to use the digital asset XRP for foreign exchange settlement. Ripple had an equity position in MoneyGram as part of the agreement. MoneyGram suspended Ripple’s use of the platform earlier this year due to an ongoing lawsuit filed by the Securities and Exchange Commission.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.