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Monday morning’s market fall triggered the second-highest amount of DeFi-related liquidations in the ecosystem’s history, according to available data. 

In total, out of the more than $24.1 million worth of liquidations, approximately $13.7 million came from DeFi protocol Compound. Aave saw the second-highest number in liquidations, making up about $5.4 million of the total. 

The highest liquidation occurred November 26, 2020, when a momentary price increase in DAI led to Compound liquidating over $88.4 million worth of collateral. 

Source: DeBank

The market development occurred alongside a brief plunge in the price of bitcoin below the $50,000 mark. The price of the cryptocurrency fell below $47,000 on Coinbase, a move that came on the heels of an earlier market fall that triggered significant liquidation levels, as previously reported. 

© 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.

Publicly-traded remittance firm MoneyGram announced Monday that it suspended its use of Ripple’s payments solution in light of the distributed ledger company’s ongoing legal fight with the U.S. Securities and Exchange Commission (SEC).

“Due to the uncertainty concerning their ongoing litigation with the SEC, the Company has suspended trading on Ripple’s platform,” said Nasdaq-listed MoneyGram. The Ripple-MoneyGram partnership began in June 2019 and was scheduled to expire in July 2023.

By using Ripple’s payments solution, RippleNet, MoneyGram was leveraging XRP in forex settlements as part of its cross-border payments process. Ripple had provided incentives to MoneyGram for doing that and the remittance company previously categorized these payouts as “market development fees” rather than revenue.

In the fourth quarter of 2020, Ripple provided MoneyGram with $8.5 million worth of incentives. Now that its use of Ripple’s platform has been suspended, MoneyGram is “not planning for any benefit from Ripple market development fees in the first quarter.”

Over the last two years, in 2020 and 2019, Ripple paid $50.2 million and $11.3 million, respectively, to MoneyGram. This was in addition to Ripple’s $50 million initial investment in MoneyGram.

Since the SEC filed a lawsuit against Ripple and its executives over alleged unregistered securities sales of XRP, a number of firms in the crypto space have paused or ceased entirely activities related to XRP.

© 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 booming crypto market is enticing traditional fintech firms to add crypto services — and vice versa.
• Even DeFi projects are trying their hand at fintech.

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You can continue reading
this Daily feature on The Block.

U.S. Treasury Secretary Janet Yellen critiqued Bitcoin’s energy consumption and transaction utility during a New York Times event on Monday.

In her remarks, according to quotes published by The Times today as part of its DealBook DC Policy Project event, Yellen said that “I don’t think that Bitcoin is widely used as a transaction mechanism.”

“It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering,” she was quoted as saying.

On the subject of central bank digital currencies or CBDCs, Yellen said that many questions remain, including the impact on monetary policy and how the Fed would interact with retail users.

She was quoted as saying:

“What would be the impact on the banking system? Would it cause a huge movement of deposits out of banks and into the Fed? Would the Fed deal with retail customers or try to do this at a wholesale level? Are there financial stability concerns? How would we manage money laundering and illicit finance issues? There’s a lot of things to consider here, but it’s worth looking at.”

Confirmed as Treasury Secretary on January 25 this year, Yellen’s remarks today resemble her previous stance on crypto. Back in 2018 at the Montreal Fintech Forum, Yellen said: “I am not a fan” of Bitcoin, stating that it isn’t a “very effective form of currency or stable sources of value.”

In her testimony to the U.S. Senate for her confirmation as Treasury Secretary, Yellen said that Bitcoin and other cryptocurrencies offer “potential benefits for the U.S. and our allies” and could “improve the efficiency of the financial system.” 

© 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.

The price of bitcoin fell sharply below $50,000 before recovering during Monday morning’s trading session.

The dive began after 9 a.m. ET, with the steep fall occurring around 9:15 a.m. ET. Data from Coinbase indicates that the price of bitcoin hit a low of $46,616 on the U.S.-based crypto exchange.

The price has since recovered, and at press time bitcoin is trading hands at above $53,000 on Coinbase.

In a similar movement, the price of ETH, Ethereum’s native cryptocurrency, tumbled to $1,507 on Coinbase before recovering. ETH is trading at about $1,760.

As The Block reported earlier Monday, significant liquidations of derivatives positions in the last 24 hours took place amid bitcoin’s fall from $58,500. About $1.5 billion worth of open interest was liquidated by crypto exchanges during the period, according to tracker Bybt.com.

The crypto futures market was “massively over-leveraged,” FTX CEO Sam Bankman-Fried told The Block last week. If such level of activity in the market continues, multi-billion-dollar liquidation days will become the new norm, Bitfiex CTO Paolo Ardoino told The Block at the time.

© 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.

Data collected by The Block Research shows that, for the first time, Ethereum miners have brought in more than $1 billion in revenue for the month of February.

That includes approximately $541 million in the form of transaction fees, which miners earn with every new block they successfully create. The fee income has been buoyed by elevated transaction fees on the Ethereum network as well as all-time-high price increases this month.

The February figure — which is set to grow given the remaining days of the month — eclipses January’s total, and is the highest recorded for the data set. It also, perhaps, reflects the surging environment for ETH mining, as demonstrated by recent GPU shortages and moves by some miners to use hardware built into gaming laptops. Gaming hardware maker Nvidia formally unveiled plans for dedicated mining hardware last week.

The price of ETH crossed the $2,000 mark for the first time last week. ETH, the native cryptocurrency of the Ethereum network, is now trading hands at roughly $1,730, per data from Coinbase.

© 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.

The price of bitcoin has fallen below $54,000 from nearly $58,500 on Sunday as derivatives positions worth more than $1 billion get force liquidated by crypto exchanges.

About $1.50 billion worth of open interest was liquidated by crypto exchanges in the last 24 hours, according to tracker Bybt.com. In other words, crypto exchanges liquidated traders’ overleveraged positions. 

Traders overleverage, or trade on margin, thinking that bitcoin’s price would go up and they would benefit more. But when bitcoin’s price goes below the liquidation price of their positions, exchanges force liquidate or close their positions because traders cannot fulfill margin requirements of their leveraged positions.

“In the past weeks, a lot of accumulation on the long side happened, so traders should expect such correction events,” Bitfinex CTO Paolo Ardoino told The Block, adding that such corrections are “normal.”

Most of the liquidations occurred on Binance, followed by Huobi and Bybit. While in terms of crypto assets, bitcoin positions formed most liquidations, followed by ether (ETH) and XRP. 

Bitcoin is currently trading at around $53,400, according to tracker TradingView. Meanwhile, ETH is trading at about $1,775.

© 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.

India’s top securities regulator reportedly wants promoters of companies looking to go public to sell their cryptocurrency holdings before raising money.

The Economic Times reported the news on Monday, citing “several people with direct knowledge of the matter.” The Securities and Exchange Board of India (SEBI) has reportedly informed merchant bankers, securities lawyers, and company executives involved with the IPO process about the restrictions.

No written communication has been formally provided by SEBI, per the report. The Block has reached out to the regulator for comments and will update this story should we hear back.

The restrictions reportedly stem from the possibility that India will ban cryptocurrencies. “There could be a direction from the government in this regard,” a securities lawyer currently working on some IPOs told ET. SEBI seems to think that “this could become a risk for investors if a promoter holds an asset that is illegal in the country.”

SEBI is being “over cautious here and it appears like a case of overreach,” according to Vatsal Gaur, a partner at law firm Pier Counsel. “If a promoter holds any cryptocurrency, it may not necessarily expose the company to any risk — the same way as holding any other financial assets doesn’t pose a risk to the operations of a listed entity,” Gaur told ET.

India is said to be moving to ban the use of “private cryptocurrencies” via a new bill, which is also expected to provide a framework for the digital rupee, the official digital currency to be issued by the Reserve Bank of India.

© 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 world’s largest payment companies and financial services firms are finally moving in on the crypto and stablecoin ecosystem. It’s about time.

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members of The Block Genesis.
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Two more commercial banks, this time backed by fintech giants Tencent and Ant Group, are said to trial China’s digital yuan.

Bloomberg reported the news on Monday, citing people familiar with the matter. Tencent-backed WeBank and Ant-backed MYbank will reportedly offer the same features as China’s state-owned commercial banks that piloted digital yuan.

In their tests, four state-owned commercial banks — the Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China — offered to activate digital yuan wallets to transfer money and make payments. Users of WeBank and MYbank will also be able to do the same.

WeBank and MYbank’s participation would mean the first time China’s private sector banks are entering the digital yuan trial space. Previously there were reports that China’s central bank would compete with Tencent and Ant’s payment apps, but later the central bank clarified that digital yuan wouldn’t compete with AliPay or WeChat Pay.

China’s increasing trials suggest that the country’s digital currency is becoming real by the day. China first began researching digital currencies over six years ago to cut the cost of circulating paper money and increase policymakers’ control over the money supply.

© 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.