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Binance announced today that it won’t support litecoin transactions that make use of so-called MimbleWimble Extension Blocks (MWEB), joining South Korean exchanges in shunning the privacy feature.

On May 20, Litecoin developers activated an optional privacy-preserving protocol on the coin. This allows the Litecoin network to conceal transactional data yet maintain its ability to process a lot of transactions quickly.

Last week, several Korean exchanges, including Upbit and Bithumb, notified users of delisting litecoin, saying that MWEB would hinder their ability to keep track of user transfers under anti-money laundering (AML) rules.

While Binance hasn’t taken the delisting route, it did warn users against making litecoin transfers with the MWEB function. The exchange stated that if users made MWEB litecoin deposits into their Binance accounts, it would result in loss of funds. 

Unlike most South Korean exchanges, Binance is not opposed to privacy-centered coins. In fact, it hosts the trading of some of the most popular privacy coins like monero and zCash. So, it’s not necessarily regulatory compliance that Binance has an issue with regards to today’s announcement.

Rather, as per Binance’s statement, it’s the inconvenience of managing litecoin’s MWEB transactions. Notably, it’s not possible to determine the crypto addresses in an MWEB transaction as those are concealed. 

“Any LTC deposits made to Binance through the MWEB function will not be received or returned as we are unable to verify the sender’s address, resulting in the direct loss of funds,” the exchange 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.

Crypto prices were down across the board on Monday in tandem with broader financial markets as the global cryptocurrency market cap fell below $1 trillion.

Bitcoin (BTC) and ether (ETH) led the downturn, reaching the lowest levels in at least 17 months, as crypto lending platform Celsius halted withdrawals. BTC’s price was down over 12% in the past 24 hours, trading at $24,040 at the time of writing, according to Coinbase data via TradingView. Leaving bitcoin at its lowest price since December 2020. 

This is now lower than May’s price action, when bitcoin fell as below as $26,250 on May 12 — amid a similar market tumult during the Terra collapse. 

Meanwhile, ether’s price fell up to 19% on Monday, trading at  $1,194, according to Coinbase data via TradingView. Monday’s move leaves ether lower than the heights it reached during the 2017/18 bull market, when it peaked just over $1,300 in January 2018. 

Overnight on Sunday crypto lending platform Celsius cited these market conditions as it halted withdrawals. 

According to Celsius’s weekly update on June 10 the firm had net withdrawals of just over $160 million last week, this followed outflows of a little over $300 million between May 27 and June 2. The price of Celsius’s native token, celsius (CEL), fell sharply on the news and is currently trading at $0.18 for a loss of 54% over the past 24 hours, according to data via CoinGecko. 

Prominent stablecoin tether (USDT) briefly slipped to $0.998 following the news, before the price rebounded somewhat as Tether issued a statement distancing itself from Celsius’s woes.

Tether’s post said the recent events affecting Celsius are an “unfortunate result of market volatility and extreme market conditions.” Before going on to say that while its portfolio does include an investment in Celsius this is a minimal part of its holdings and has no bearing on the stability of its own reserves.

These price drops come despite potentially positive developments for both bitcoin and ether last week — the Lummis-Gillibrand crypto bill was finally released in the US while Ethereum’s Ropsten proof-of-stake test merge successfully went live. However, the bitcoin bill was met with a flat reception following months of anticipation as a tumultuous macroeconomic backdrop continues to dictate the mood across financial markets. 

Last week the European Central Bank announced its first interest rate hike in 11 years while US inflation hit a 41-year high of 8.6% as fears of a recession became more pronounced.

© 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.

Tron founder Justin Sun said in a tweet on Monday that the Tron DAO Reserve would deploy $2 billion to fight short sellers as the price of tron (TRX) slid. 

“I don’t think they can last for even 24 hours. Short squeeze is coming,” Sun wrote, as the price of TRX fell more than 16% overnight, according to data from Coinmarketcap. 

A short squeeze occurs when traders who are betting on a decline are forced to close their positions by buying back the underlying token. Sun noted that the so-called funding rate for shorting TRX on Binance had hit 500%.

Meanwhile, Tron’s stablecoin, USDD, was trading at $0.98 at its lowest point on Monday morning. The token — which was at first a near-carbon copy of Terra’s algorithmic stablecoin UST — arrived on the Tron blockchain on May 5 and is supposed to track the price of the US dollar.

The project had been preparing for potential market turbulence following the collapse of Terra. Initially designed to maintain its peg to the dollar algorithmically, albeit with some backing, Sun said earlier in June that USDD would now be overcollateralized.

The Tron DAO Reserve said on Saturday that it had bought $50 million worth of bitcoin and TRX.

A reserve comprised of cryptocurrencies and other stablecoins was amassed to overcollateralize USDD and was guaranteed to be maintained at a minimum of 130% of the total amount of USDD in issuance.

Tron said that it would begin publishing real-time updates on the collateral ratio on the Tron DAO Reserve website from June 5. The ratio on Monday morning was 280%. 

© 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 lending firm Nexo wants to buy beleaguered rival Celsius’s assets, claiming it is in a healthy position to do so.

In a Twitter thread posted today, Nexo said it is “in а solid liquidity and equity position to readily acquire any remaining qualifying assets of Celsius, mainly their collateralized loan portfolio.”

Celsius is reeling under pressure given the crypto downturn, which has seen bitcoin drop below $25,000. Earlier today, Celsius suddenly paused withdrawals, swaps and transfers between accounts, citing “extreme market conditions.” It did not provide a timeline for resuming those services.

Nexo has put together an offer to Celsius in a formal letter of intent. “Nexo, its partners, and affiliates could readily acquire from Celsius part or all qualifying, outstanding collateralized loan receivables secured by their corresponding pledged cryptocurrency collateral, subject to Nexo’s risk management and collateral requirements,” the letter reads.

The offer is valid until 4:30 a.m. UTC on June 20, unless accepted or rejected by the seller, or withdrawn by the buyer prior to that time.

The Block has reached out to Nexo and Celsius for comment and will update this story should we hear back.

Explaining how Nexo is in a strong financial and liquidity position to buy Celsius’s qualifying assets, Kiril Nikolov, DeFi strategist at Nexo, told The Block that “over the past couple of months, the Nexo team has been in the process of fully de-risking it’s DeFi exposure.”

There are no customer funds with exposure to DeFi, although Nexo has some staked ether (stETH) that don’t affect capacity in any “meaningful way,” Nikolov explained. 

“The Nexo team is in a strong financial and liquidity position, bootstrapped and having never raised external capital with a solid equity cushion, which is also visible in our real-time reserves audit available here,” he 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.

Celsius—the crypto lending firm—said on Sunday that it would pause withdrawals on its platform, citing market conditions as the price of Ether and other cryptocurrencies tumbled. 

The firm, which sources told The Block earlier in the week only had a few more weeks of bandwidth to support customer withdrawals, took to Twitter to announce the suspension of withdrawals, transfers, and swaps, noting: 

“@CelsiusNetwork is pausing all withdrawals, Swap, and transfers between accounts. Acting in the interest of our community is our top priority. Our operations continue and we will continue to share information with the community.”

Led by Alex Mashinsky, the firm reportedly had about $12 billion in customer assets as of May across 1.7 million users, as reported by The Financial Times. 

In a note to clients it added: “Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals…We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.”

The price of Celsius’s native token Celsius token cratered on the news, falling 45% to $0.21 per coin. 

This is the latest sign of market stress in the crypto sector. The price of ether tumbled below $1,400 a coin Sunday evening. 

Last week, The Block reported that BlockFi, another lending firm, was raising a round at a valuation of $1 billion—well below the $5 billion valuation it was reportedly raising at in 2021. 

© 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.

Tron Dao Reserve, which manages algorithmic stablecoin USDD, said on Saturday that it had bought $50 million worth of Bitcoin (BTC) and Tron (TRX).

The purchase was announced in a tweet saying it was meant to “safeguard the overall blockchain industry and crypto market.”

Following the collapse of Terra’s algorithmic stablecoin in May, Tron earlier this month said it would significantly increase the amount of capital backing USDD, The Block reported at the time.

A reserve comprised of cryptocurrencies and other stablecoins was amassed to overcollateralize USDD and was guaranteed to be maintained at a minimum of 130% of the total amount of USDD in issuance.

Tron said that it would begin publishing real-time updates on the collateral ratio on the Tron Dao Reserve website from June 5. The ratio today was almost 193%.

Tron’s USDD went live on the blockchain on May 5.

© 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.

Coin Center, a Washington, DC-based crypto think-tank, on Friday filed a lawsuit in federal district court against the Treasury Department and the Internal Revenue Service claiming a crypto tax-reporting requirement contained in an infrastructure law is unconstitutional, it said in post on its website.

The lawsuit leads by claiming: “In 2021, President Biden and Congress amended a little-known tax reporting mandate. If the amendment is allowed to go into effect, it will impose a mass surveillance regime on ordinary Americans.”

The provision in question from the Infrastructure Investment and Jobs Act passed last summer is the 6050I amendment, which would require individuals and businesses receiving $10,000 or more in crypto to report to the government not only the name of who sent them the funds, but also that person’s date of birth and Social Security number.

The lawsuit claims this would help “uncover a detailed picture of a person’s personal activities, including intimate and expressive activities far beyond the immediate scope of the mandate. The reports would give the government an unprecedented level of detail about transactions within a realm where users have taken a series of steps to protect their transactional privacy.”

Coin Center wrote in its post that its “mission is to defend the rights of individuals to build and use free and open cryptocurrency networks: the right to write and publish code – to read and to run it. The right to assemble into peer-to-peer networks. And the right to do all this privately.”

© 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 lending platform BlockFi, which earlier this year was fined a record $100 million by the US Securities and Exchange Commission and state authorities to resolve regulatory charges, is the latest company in the crypto industry to hire lobbyists, Reuters reported on Friday.

BlockFi has engaged a five-person policy team with law and lobbying firm Arnold & Porter Kaye Scholer, including partner Mark Epley and legislative and public policy practice group chair Kevin O’Neill, Reuters said, citing a federal lobbying disclosure.

The team will work on “regulatory and tax policy for financial service providers in digital assets,” the filing said.

Crypto has been a growth sector for lobbying, with the industry spending $9 million on lobbying in 2021, according to a March report from Public Citizen cited by Reuters.

A spokesperson for BlockFi told Reuters the company is “eager to engage” with policymakers to help define the regulatory and tax environment for digital assets.

SEC Chair Gary Gensler said in February that the $100 million settlement made it “clear that crypto markets must comply with time-tested securities laws,” The Block reported at the time.

© 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.

A survey conducted by Deloitte found that more than 85% of US merchants view enabling crypto payments as a high priority, with almost three-quarters of respondents planning to accept either cryptocurrency or stablecoin payments within the next 24 months.

Although crypto payments are not yet an everyday occurrence for most customers, interest is significant, especially among younger generations, Deloitte said, calling this a sign to retailers that those failing to embrace customer demand risk of losing out on profits.

Spending on crypto infrastructure is expected to increase, as more than 60% of respondents said they expect to have budgets of more than $500,000 to enable digital currency payments in the next 12 months.

Enabling crypto payments does not mean companies will be holding digital assets. More than half (52%) plan to have payment processors convert crypto into fiat currency, and companies partnering with third-party crypto payment processors are particularly likely to do so (61%). This offers easier and faster time to market and is considered lower risk than alternatives, the study said.

Still, respondents cited multiple barriers to adoption of crypto payments, with customer security of the payment platforms topping the list (43%), followed by the changing regulatory landscape (37%) and instability of the digital currency market (36%).

The study, titled “Merchants Getting Ready for Crypto,” conducted in collaboration with PayPal, was published last week and conducted from December 3-16, polling 2,000 senior executives from US retail companies.

Respondents reported at least a general knowledge of cryptocurrency and stablecoins, and most were primary decision-makers regarding whether their companies would accept crypto payments.

© 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

• Fueled by the NFT mint craze, NFT projects have amassed massive treasuries
• In total, the top 45 projects accumulated an aggregate of 215.6K ETH ($372.1mm at the current ETH price) in primary revenue
• Surprisingly, 67% of the total treasury balance was already liquidated or moved within the first week after inception
• Although two basic treasury management types emerged, there appears to be a lot of room for improvement and the need for more sophisticated processes

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