FreeCryptoCurrency.Me

The UK’s Financial Conduct Authority (FCA) has appointed the director of the multi-agency National Economic Crime Command (NECC) as its new director of payments and digital assets. 

The regulator announced the appointment of Matthew Long in a release on Tuesday, amid a raft of other senior moves. The role is newly-created and will oversee e-money, payment and crypto-asset markets and lead related policy development.

The regulator put out a search for a crypto head in mid-March as pressure mounted ahead of its deadline for granting firms anti-money laundering licenses, which would allow them to continue operating in the UK. In April, it appointed Victoria McLoughlin as its interim head of digital assets. 

The complicated and protracted process for granting licenses has meant that some firms, including marketmaker B2C2, Blockchain.com and BCB Group, have opted to seek regulatory approval elsewhere. 

Long will join the FCA in October. His previous remit included tackling economic crime and illicit finance, including leading responses to organised immigration crime, modern slavery, human trafficking, drugs, firearms and borders. 

He also led the UK Financial Intelligence Unit (UKFIU) which has national responsibility for receiving, analysing and disseminating financial intelligence submitted through the Suspicious Activity Reports Regime. Prior to that role, Long had a career in the police. 

© 2022 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 Bank of England said activity in the crypto market must be addressed as the industry continues to grow. 

The bank’s Financial Policy Committee (FPC) briefly addressed cryptocurrencies in its financial stability report on Tuesday. The report noted that while crypto poses a less immediate risk it is nonetheless important to monitor.

In particular, the report pointed to the sharp drop-off in the market’s value — which fell below $1 trillion in June from a high of $3 trillion in November. The FPC said that several vulnerabilities, with similarities to previous episodes in traditional finance, were exposed during this decline.

These vulnerabilities included “liquidity mismatches leading to run dynamics and fire sales, and leveraged positions being unwound and amplifying price falls. Investor confidence in the ability of certain so-called ‘stablecoins’ to maintain their pegs was weakened significantly, particularly those with no or riskier backing assets and lower transparency.”

While the report went on to say that these risks did not pose a threat to the stability of the broader financial markets, it did call for greater regulatory clarity as the industry develops.

“This underscores the need for enhanced regulatory and law enforcement frameworks to address developments in these markets and activities,” the report said.

Stablecoins were then singled out as requiring additional regulation, as “some stablecoins held to be used for payments may not offer similar protections to central bank or commercial bank money.”

Such stablecoins hit the headlines in May as TerraUSD – the third-largest — lost its peg to the US dollar, destroying more than $40 billion in value. 

The FPC previously set out its expectations for stablecoins which are  used as “money-like instruments.” The committee expects these cryptocurrencies to meet “equivalent standards to commercial bank money in relation to stability of value, robustness of legal claim and the ability to redeem at par in fiat.” 

The US-UK Financial Innovation Partnership held its third meeting in London last week to discuss crypto and digital asset regulation, ahead of a financial working group meeting between the two nations later this month. The meeting also addressed stablecoins and central bank digital currencies.

© 2022 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.

June was a torrid month for crypto in general; a fact that meant it was almost unavoidable for the non-fungible token (NFT) space to feel a knock-on effect. 

In this inaugural edition of The Block’s monthly gaming, NFT and metaverse data roundup, we look at the numbers behind the news, and bring you some of the latest data on trends in the space.

The bear market hits NFTs

NFT marketplace trading volume fell from $16.6 billion at the start of this year to just over $1 billion last month, a 94% decline. The start of this year was a boom period for NFTs in terms of trading activity.

In January NFT trading on Ethereum hit an all time high of $16.6 billion. But there is a caveat. It’s thought NFT trading was particularly high in January due to users trading tokens among themselves to drive up prices – known as wash trading – on LooksRare.

Alongside this, despite a rocky patch, OpenSea clawed back some of its market dominance.

Meanwhile, NFT prices were generally in decline. The floor prices of so-called blue chip projects such as Bored Ape Yacht Club (BAYC), Doodles and Cool Cats have fallen around 30% since the start of the year.

BAYC’s creators Yuga Labs, however, has increased its market share so far this year as it rolls out new products such as Otherdeed, the land NFTs for the company’s upcoming Otherside metaverse. It will hold its first demo on July 16.

NFT Royalties

Research from The Block shows that the top ten NFT projects have amassed 92,600 ETH in cumulative royalty revenue. The steep ascent in sector-wide royalties in April and May this year has been driven mainly by just two collections: Otherdeeds and Moonbirds.

Source: The Block Research, Dune Analytics (@cryptuschrist)

But don’t be fooled into thinking this graph paints a rosy picture of the fortunes of these top collections. Converted into USD, the picture becomes somewhat bleaker.

Source: The Block Research, Dune Analytics (@cryptuschrist)

Metaverse land prices, volume down

Decentraland land prices decreased from an average of $6,000 in January to $3,500 last month. The Sandbox is down from $4,700 to $2,100. NFT World, which saw its $4,400 January price rise to a peak of $11,600 in March, is back down to $4,300. However, much of the price decline was seen earlier on in the year as opposed to last month.

The outlier was Otherdeed. The price of these land parcels soared to almost $22,000 in May following the Otherdeed mint at the end of April but have since slumped to an average of around $5,700 a piece.

Sales volume continues to fall from highs edging towards $40m at the start of the year to more than ten times less than that in June. The Sandbox and NFT Worlds continue to take in the lion’s share of sales volume but have also seen huge decreases.

Harmony Hack hits DeFi Kingdoms trading volume

Volume on Harmony DEXs have dropped significantly since the start of this year. The popular DeFi Kingdoms game represented the chain’s largest DEX, although its launch of its own Avalanche subnet in late March marked a significant loss for the ecosystem.

But this has now come to a head with the Harmony bridge hack. The hack brought a spike in volume to the DEXs on June 23, including a 434% spike on DeFi Kingdoms compared to the June average as user scrambled to unload their assets.

Source: CoinGecko

Following the hack, the number of ONE tokens on DeFi Kingdoms dropped. The Block published this research on June 30, showing that 50% of the tokens live on the protocol two days before the hack had been removed.

© 2022 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.

Crypto lender Nexo has started a process to potentially acquire rival Vauld after the latter abruptly halted customer withdrawals on Monday.

Sharing the news exclusively with The Block on Tuesday, Nexo said it has signed an indicative term sheet with Vauld with a plan to acquire up to 100% of the Singapore-based company. The term sheet grants London-based Nexo a 60-day exclusive exploratory period in which it will conduct due diligence.

“We have to see what exactly is on their books and it’s going to take a little while,” Nexo co-founder Antoni Trenchev told The Block in an interview. “But since we have the exclusive exploratory period, we are the only ones looking at them right now.”

Vauld is struggling financially, as The Block was first to report on Monday. The crypto trading and lending platform suspended all withdrawals, trading and deposits and hired legal and financial advisors for potential restructuring options.

Client withdrawals will remain halted for now.

Trenchev said Nexo could restructure or refinance Vauld depending upon how the due diligence process goes. That is, if Vauld has some assets staked for longer periods or has made investments for a long duration, Nexo could take those and instantly provide liquidity. On the other hand, if their assets have been lost, Nexo could potentially replenish them if it makes sense, said Trenchev.

“We have to view it in the overall context of if we step in, can we restructure the business so that it is functioning again, so that it is profitable within the Nexo umbrella, which as a company is profitable and whether we can accumulate that,” Trenchev said.

As to why Nexo is interested in Vauld, Trenchev said Vauld has “huge traction in India and Southeast Asia, which are important markets to us.”

Founded in 2018 by Darshan Bathija and Sanju Kurian, Vauld is a crypto trading and lending exchange platform with most of its team based in India. At its peak, Vauld had assets under management of close to $1 billion, Bathija told The Block.

He declined to comment on how big or small Vauld’s balance sheet hole is, but a person with knowledge of the situation told The Block that the hole is worth “mid to high double-digit millions,” which is less than $100 million.

Vauld is not the only struggling firm that Nexo has approached. Last month, Nexo offered to buy beleaguered rival Celsius’s assets. The offer was open for a week and lapsed as Celsius was not interested in making a deal.

But Vauld seems interested. “Operating under the Nexo umbrella puts us instantly in a position of strength to continue the execution of our fiduciary obligations to our customers and at the same time to execute upon both companies’ ambitious roadmaps, regardless of the market conditions,” Bathija said in a statement.

© 2022 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.

CoinLoan, a platform that offers crypto-backed loans, says it has temporarily reduced the withdrawal limit for lenders amid the current market turmoil, the company announced on Monday.

The European crypto lender becomes the latest in the business to restrict withdrawals with several high-profile crypto businesses in various forms of financial distress. CoinLoan stated that the issues affecting the likes of Celsius, Voyager, BlockFi, and Three Arrows Capital have triggered a wave of withdrawals on its platform.

“The interest we pay on the Interest Accounts is yielded by issuing overcollateralized loans to other platform users. Hence in some instances, the estimated date of a complete withdrawal of assets from the Interest Accounts comes before, not after, loan closure,” CoinLoan stated in the announcement.

As such, the company has imposed the withdrawal limit “in order to balance the flows of funds and prevent liquidity-related interruptions.”

Customers are now restricted to a maximum withdrawal limit of $5,000 every 24 hours per today’s announcement.

CoinLoan distanced itself from the contagion spreading among crypto hedge funds and lending outfits. The platform stated that it had no exposure to Luna, staked ETH, or any of the affected firms adding that its policies prohibit investments in “risky activities.” CoinLoan also added that customer funds remain safe.

© 2022 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.

Within the last 24 hours, Celsius repaid $120 million of its debt owed to decentralized lending protocol Maker across three transactions.

Celsius, a centralized lending firm currently facing a severe liquidity crisis, had previously borrowed hundreds of millions on Maker using wrapped bitcoin (WBTC) as collateral.

By paying down its Maker debt, Celsius has de-risked its loan position from potential liquidation. In decentralized finance, liquidations occur when traders cannot repay their loans on time, and the protocols automatically sell their collateralized assets.

Source: DeFiExplore

As the price of bitcoin dropped recently, Celsius faced a heightened risk of liquidation. The repayment has helped reduce the liquidation price on its WBTC collateral to less than $5,000, according to data from DeFiExplore.

On-chain data suggests that Celsius’ obligations are complex and it maintains collateralized loans on multiple lending protocols. The firm still owes $82 million to Maker, $100 million to Compound, and $175 million to Aave.

Celsius’ recent developments are notable given questions about the platform’s solvency and broader fears about solvency across the crypto industry — particularly centralized lenders _ amid a decline in major digital asset prices. Those concerns were kicked into overdrive when Celsius announced that it would halt withdrawals from its platform.

© 2022 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

• “Web 5”, a newly coined concept by Jack Dorsey’s TBD unit, was recently announced on Twitter
• Web 5 promises to return ownership of users’ personal data back to the users, which should allow them the choice of service providers
• The purpose of doing so is to build an Internet for trust minimized applications and to reduce the power that existing service providers have over users’ personal data today
• This is possible with the use of cryptography, decentralized identifiers, and verifiable credentials
• While TBD has proposed certain novel applications, such as tbDEX, there is still no evidence to suggest that such a concept will eventually acquire significant user adoption

This research piece is available exclusively to
members of The Block Research.
You can continue reading
this Research content on The Block Research.

Voyager Digital shares fell 34% on Monday following last week’s announcement that the crypto lender was limiting services for users.

Shares in the Canadian firm were trading for 0.39 Canadian dollars, at the time of writing, according to Toronto stock exchange data.

Trading resumed in Canada on Monday following a national holiday on Friday, the same day Voyager revealed it was “temporarily suspending trading, deposits, withdrawals and loyalty rewards.”

Monday’s losses come on the back of a turbulent second quarter in which shares in the company plunged over 90%.

While Voyager has been affected by the downturn in markets, its issues were exacerbated in June by its exposure to the crypto hedge fund Three Arrows Capital (3AC). The firm issued a notice of default to 3AC over failed repayment of a $650 million loan last Monday — before 3AC filed for Chapter 15 bankruptcy on Friday. 

The latest losses have pulled Voyager’s stock market valuation below the market cap of its native Voyager token (VGX). At the time of writing on Monday, the market cap of VGX was about $72 million, according to data from CoinGecko — while the company’s equity was worth about $58 million. 

© 2022 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 Monetary Authority of Singapore (MAS) says it is considering more restrictive crypto regulations, the financial regulator stated in a letter to the country’s parliament dated July 4.

According to Tharman Shanmugaratnam, senior minister and minister in charge of MAS, the regulator is considering measures that will offer more protection to retail participants in the crypto market.

“These may include placing limits on retail participation, and rules on the use of leverage when transacting in cryptocurrencies,” the letter stated.

The letter signals the MAS plans to further its policy of strict crypto market oversight. The regulator cracked down on crypto marketing campaigns at the start of the year and has enacted a licensing regime for cryptocurrency businesses in the country.

MAS has previously stated its desire to deal with bad actors in the crypto space, as previously reported by The Block. Singapore’s financial regulator recently reprimanded Three Arrows Capital, accusing the embattled hedge fund of misrepresenting its asset holdings to the regulatory agency.

© 2022 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.

Hackers are selling personal records of Chinese citizens stolen during a cybersecurity breach that allegedly targeted a database of Shanghai National Police (SHGA).

The security breach, which occurred sometime in 2022, exposed the personal data of over 1 billion Chinese citizens. The information has now been put it up for sale on both the open and the dark web. It includes names, addresses, government ID numbers, mobile numbers and other sensitive details.

One anonymous hacker who goes by ChinaDan is claiming to sell the stolen information in exchange for 10 bitcoin ($200,000). ChinaDan posted the offer on Breached.to, a hacking forum used by black hat hackers.

Binance CEO Changpeng Zhao said in a Twitter post over the weekend that the exchange’s threat intelligence systems detected that 1 billion resident records from “one Asian country” were put up for sale on the dark web. The exchange claims to have ramped up its verification processes for those affected by the breach.

Zhao added that the breach may have occurred due to a buggy deployment of ElasticSearch, a popular search and data analytics tool used by enterprises. 

Kenny Li, the co-founder of web3 privacy project called Manta Network, told The Block that the breach may have implications for the crypto industry. “The stolen data could be used to exploit users and do things like phishing attacks to steal keys or unauthorized access to applications like centralized exchanges,” Li said.

© 2022 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.