FreeCryptoCurrency.Me

Following President Biden’s crypto executive order in March, the White House Office of Science and Technology Policy (OSTP) is aiming to put out a report on cryptocurrency mining and its environmental impact this summer, according to Bloomberg.

OSTP is digging into a wide variety of topics related to crypto mining, including claims that it could be beneficial to power grids in states like Texas, complaints about noise pollution, and the differences between proof-of-work and other network consensus mechanisms. The report is expected in August, per Bloomberg’s report.

“It’s important, if this is going to be part of our financial system in any meaningful way, that it’s developed responsibly and minimizes total emissions,” Costa Samaras, principal assistant director for OSTP’s energy division, told Bloomberg Law.

Samaras said that the team was studying what the economic incentives are for miners to shut down at peak power consumption times when they could be making money by running machines non-stop.

“We’ve seen miners set up in places where the electricity prices are low and they’ve secured favorable industrial rates,” Samaras told the publication. “I would like to go see the evidence that an afternoon peak mining tariff slows down mining operations.”

Samara also mentioned looking into reports about noise, local pollution and old fossil power plants being reenergized in certain communities. 

“These are not trivial loads,” he said.

Biden’s comprehensive executive order tasked OSTP with teaming up with other offices and coming up with a report within 180 days essentially looking into how blockchain technologies could impact the environment.

OSTP invited the public to send comments until May 9 and a group of environmental organizations including Greenpeace and the Environmental Working Group co-signed a letter alerting to the potential “impacts of digital currency” and proposing a series of measures to reign in their effect on climate change.

In it, they argue that bitcoin’s electricity usage is growing faster than other sectors and is contributing to climate pollution, as well as harming local communities.

They also urge the EPA to tighten supervision of air and water permits given to miners who use proof-of-work validation and the Office of Management and Budget to create a registry for proof-of-work mining operations “over a certain threshold.”

A few weeks ago, House Democrats sent a letter to the EPA calling for the agency to investigate possible negative consequences of proof-of-work mining. A group of over 50 advocates of bitcoin mining followed up by addressing the EPA, in a letter to dispute some of the legislators’ claims.

For instance, they argued that bitcoin mining did not create carbon emissions by itself and that if miners abide by EPA’s regulations, they shouldn’t be singled out from other operations that similarly source electricity.

© 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.

We.trade, a Dublin-based blockchain company established and co-owned by 12 banks, is calling in a liquidator, The Independent.ie reported today.

The joint venture of banks including HSBC, Deutsche Bank and KBC, along with IBM, has called for a creditors’ meeting next week, where a liquidator from PwC may be appointed, the report said. We.trade is seeking to be wound up under the Companies Act, according to a meeting notice.

We.trade, which was established in 2017 to develop a platform for trade finance, has been loss-making, the report said. Its latest accounts, for 2020, show losses of about 8 million euro ($8.6 million).

In 2021 the company raised 5.5 million euro from investors, according to the Global Trade Review.

A person familiar with the company’s operations said that it has been unable to secure more funding, The Independent.ie reported, adding that employees were recently informed of the move to appoint a liquidator.

© 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.

Following the total collapse of Terra’s algorithmic stablecoin in May, TRON this morning announced a plan to significantly increase the amount of capital backing up its own stablecoin.

USDD — at first a near-carbon copy of Terra’s algorithmic stablecoin UST — arrived on the TRON blockchain on May 5. Initially designed to maintain its peg to the US dollar algorithmically, albeit with some backing, USDD will now be overcollateralized, according to TRON founder Justin Sun.

A reserve comprised of cryptocurrencies and other stablecoins has been amassed and will be maintained at a minimum of 130% of the total amount of USDD in issuance, he said. In a news release, TRON described that collateral ratio as “guaranteed,” and said that it would begin publishing real-time updates on the collateral ratio on TRON DAO Reserve’s website from June 5. 

As things stand, according to a TRON spokesperson, the reserve contains 14,040 bitcoin (around $418 million), 140 million USDT, and 1.9 billion TRX, as well as 8.29 billion TRX in a burning contract. 

“We want to upgrade USDD to a hybrid model,” said Sun. “So on the one side we have an algorithmic stablecoin — an algorithm to make the stablecoin stable — on the other hand we have TRON DAO Reserve.”

Ailing algorithms

USDD was designed to incentivize arbitrageurs to keep its price pegged to that of the US dollar through trading between TRX, TRON’s token, and USDD — following the algorithmic stability blueprint. Like Terra, TRON had also signaled its intent to establish a reserve of billions of dollars’ worth of bitcoin and other cryptocurrencies to support USDD in extreme market conditions.

Still, that combination of safeguards proved spectacularly ineffective for Terra’s UST. The stablecoin, which was the third largest by issuance prior to its collapse, veered sharply away from its dollar peg in mid-May, taking down Terra’s LUNA with it and wiping out some $40 billion in value in a matter of days. Billions of dollars in bitcoin were sold and unprecedented volumes of Terra’s native token LUNA issued in a frantic attempt to restore the peg, but to no avail.

Sun, however, contends that hope remains for USDD — which has already reached $667 million in total circulating supply — if it can be suitably backstopped.

“The reserve backing we’re using right now is highly diversified. It includes bitcoin and all different kinds of stablecoin. USDC [Circle’s stablecoin] will be a part of our reserve, but it will only be a small part of our reserve,” he said. 

In its news release, TRON provided a full list of the assets in the reserve, which are bitcoin, TRX, USDC, USDT, TUSD and USDJ. 

“All the Bitcoin addresses will be signed by signature so everybody will know those bitcoins belong to us,” Sun added.

Not giving in

In a previous interview, Sun told The Block that building so-called “decentralized” stablecoins that cannot be interfered with by regulators is a pressing need for the crypto industry.  

Asked whether he was tempted to simply abandon the USDD project in the aftermath of UST’s collapse, Sun said the Luna Foundation Guard — a Singapore-based non-profit that had raised billions of dollars in cryptocurrency to buttress UST — mismanaged the situation by trying to sell to panicked investors.

“We need to be one step before the market,” he said. “We want to basically participate in a role to stabilize the market — to decrease the volatility in the first place.”

Currently, the bulk of the reserve has been financed by TRON directly, but the company hopes to add external capital from investors soon, according to Sun. 

Prior to its demise, holders of UST were able to park the stablecoin in Terra’s lending platform Anchor Protocol to earn interest rates of 20%, which many had flagged as unsustainable. TRON has a similar platform named JustLend. Currently, it offers annual interest rates of 17.67%, but Sun said he hopes to drive that higher — to “around 30%.”

© 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.

Bitcoin’s near-term volatility is largely irrelevant once you understand the fundamentals of the leading cryptocurrency and how difficult it would be to create something better, according to MicroStrategy CEO Michael Saylor.

“Bitcoin is the most certain thing in a very uncertain world, it’s more certain than the other 19,000 cryptocurrencies, it’s more certain than any stock, it’s more certain than owning property anywhere in the world,” he said in an interview with The Block last week after appearing at CoinMarketCap’s The Capital virtual conference.

People who have spent at least $100 on bitcoin can speak about the cryptocurrency, Saylor allowed, but otherwise they probably “shouldn’t have anything to say about it.” 

MicroStrategy’s bet on bitcoin 

Saylor’s software company holds a massive bitcoin position — owning, including through subsidiaries, about 129,218 bitcoins — and he has become a leading proponent of the cryptocurrency since adding it to his company’s balance sheet in August 2020.

MicroStrategy’s most recent purchase, revealed in an April 5 filing, was the acquisition of 4,167 bitcoin worth about $190.5 million at the time, when bitcoin was trading at $45,714.

The company has acquired its total bitcoin holdings at an average price of $30,700. With bitcoin trading at  $29,716.37 on Sunday, Saylor’s company is in the red on its purchases — although it has no plans to sell, he said. 

He said bitcoin would have to fall 95% before the company would consider doing anything, even then, he has said in the past, the company could post alternative collateral. 

In order to fund its bitcoin bet, MicroStrategy took out three loans between December 2020 and June 2021 by issuing convertible senior notes and senior secured notes. 

Convertible senior notes are debt securities that contain options to be converted into a certain amount of the issuer’s equity once they hit maturity. When they mature they must either be converted into equity, repaid in cash or a combination of both. Senior secured notes are loans that use the issuer’s assets as a form of collateral.

MicroStrategy issued senior secured notes in June 2021, secured by assets that included any bitcoin bought on or after the closing of the offering. Still, it did not include any of MicroStrategy’s existing bitcoin, or any that might be purchased with the proceeds from existing bitcoin or other holdings. 

MicroStrategy and Bitcoin, a rough ride in May

In May, MicroStrategy’s share price hit a 20-month low of $159.67 before recovering to close the month at $246.65, still down from an open of $355.68. During the month, the company’s bitcoin position fell into the red, where it remains. 

Bitcoin prices plunged in May, as the cryptocurrency market, as well as broader financial markets, were in tumult. After an initial crash in crypto prices early in the month, and as the wider macroeconomic environment worsened, prices plunged further amid the Terra blockchain collapse, following the failure of its stablecoin, TerraUSD (UST). 

This contagion dragged bitcoin below $30,000 as it fell to its lowest levels in 18 months, since trading at about $27,000 on December 21, 2020. While many observers declared this to be clear evidence of a crypto bear market, Saylor said he is not convinced. 

“I don’t know if it’s a bear market or not, but if it is a bear market, then we had three of them in the last 24 months,” he told The Block. Saylor was alluding to April 2021, when the price rose to $60,000 before falling back to about $31,000 by July 2021, then hitting all-time highs of $69,000 in November 2021. 

Saylor said he prefers not to get caught up in near-term prices, adding that people focusing too much on charts are “playing with tea leaves.”

His take: “If you’re not planning to hold it for four years, you’re not really an investor at all, you’re a trader, and my advice for traders is don’t trade it, invest in it.”

TerraUSD and bitcoin as a reserve asset 

One of the primary reasons bitcoin and crypto prices fell in May was the capitulation of TerraUSD and luna (LUNA), the Terra blockchain’s two main offerings. 

Terra’s ecosystem came under pressure after its stablecoin, TerraUSD, lost its peg against the dollar on May 7. A shared relationship between TerraUSD and luna then dragged both down, even though TerraUSD had a “forex reserve” of more than $3 billion in bitcoin that it offloaded in a futile attempt to defend its peg.

TerraUSD had a burn mechanism involving luna so that anyone holding TerraUSD could trade one token for $1 worth of luna tokens in the event of a de-peg — if TerraUSD were trading at $0.95 for example. 

This would make TerraUSD more scarce and was supposed to pull the price back toward $1, also allowing holders to take advantage of the price difference and potentially make an arbitrage profit, incentivizing them to maintain the peg.

Still, after TerraUSD lost its dollar peg on May 7, the Luna Foundation Guard (LFG) — a non-profit managing Terra’s forex reserve —  used up most of its reserves to buy UST in an unsuccessful attempt to defend the peg.

Despite the collapse of TerraUSD and the depletion of its bitcoin reserves, Saylor maintained that bitcoin is a worthwhile reserve asset. 

“I think it all comes down to the amount of leverage. I think it makes a lot of sense to use bitcoin as a reserve asset,” he said, noting that with reasonable leverage, such as owning $1 billion worth of bitcoin and issuing $50 million worth of a stablecoin, there would be significantly less risk involved with using bitcoin as a reserve asset. 

The issue with Terra wasn’t so much the idea of owning bitcoin, he said, but that they had too much TerraUSD outstanding. 

© 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 combination of “systemic” central bank digital currencies and stablecoins could significantly alter central banks’ delivery and control of monetary policy and the size and composition of their assets and liabilities. 

That’s according to Andrew Hauser, executive director for markets at the Bank of England. Hauser made the argument as part of a speech he delivered at the Federal Reserve Bank of New York on Wednesday.

The size of the effects will “depend heavily on the eventual design of any systemic digital currencies,” Hauser said. He also specified that digital currencies don’t present any “redline” risks for central bank balance sheets. Nonetheless, he argued that central bankers should start preparing for the “important implications” that central bank digital currencies (CBDCs) and stablecoins will have for their balance sheets by building responses to them into their operational toolkits.

Central banks — as the sole issuer of fiat currency — typically control the money supply of a national economy using three main devices: modifying interest rates, regulating commercial banks (by setting capital and reserve requirements), and acting as a lender of last resort. Money issued is considered a balance sheet liability, which can be bought back or sold to commercial banks as needed. 

Hauser outlined how CBDCs and other digital currencies could upset this system by modifying the privileged relationship between central and commercial banks. Under certain conditions, digital currencies could increase competition for credit, reduce the sum of deposits sitting in commercial banks (and thus reserve rates), and challenge the central banks’ ability to serve as the lender of last resort.  

Set in the shadow of the TerraUSD stablecoin collapse, Hauser’s speech pointed to the way such systems might be regulated. He specified that in the UK the Bank of England is recommending that any stablecoin reaching systemic size — defined as one with the potential to scale rapidly and become widely used for payments — would need to meet the standards expected from a commercial bank, including rigorous central bank supervision, robust legal claims and transparency about the assets being used to back its currency.

This implies that stablecoins, even if they were operated by private companies, would be forced to fit within the monetary system governed by central banks, thus operating as a de facto form of state-backed liability.

If adopted, CBDCs would be the first new liability used by central banks for centuries. “The dog may be old,” Hauser said, “but it can still perform new tricks!”

© 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.

Blue-chip non-fungible token (NFT) project Bored Ape Yacht Club (BAYC) said on Saturday afternoon that its Discord servers were subject to a “brief” exploit, as 200 ETH ($357,000) worth of NFTs were ultimately stolen from users.

Screenshots posted by a Twitter user with the screen name OKHotshot show that a project community manager’s Discord account appears to have been hacked, meaning scammers could carry out a phishing attack.

“We are still investigating, but if you were impacted, email us at discord@yugalabs.io,” the BAYC team wrote on Twitter more than 11 hours following the incident, adding a reminder that the project does not offer surprise mints or giveaways. 

Yuga Labs’ co-founder Gordon Goner tweeted shortly after: “Discord isn’t working for web3 communities. We need a better platform that puts security first.”

As one of the most valuable NFT collections on the market, BAYC has become a sweet spot for hackers and snipers over the last year.

In April, the project’s Instagram account was hacked to much worse effect, with 91 NFTs worth at least $2.8 million taken from users. When the Instagram account was accessed, it was used to post a fake update claiming there was a LAND airdrop and users had to connect their wallets to claim the airdrop.

Alongside this, many Bored Ape holders along with owners of other popular collections saw their holdings sniped at prices much lower than their market value due to an OpenSea UX bug earlier in the year.

Bored Ape floor prices have been in steady decline since the project’s 153 ETH peak of late April. The changing market dynamics have affected not just the floor price but also the volume of sales.

© 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.

India’s crypto exchange CoinSwitch Kuber earlier this week introduced its Crypto Rupee Index (CRE8), the first benchmark index to measure the performance of the Indian rupee-based crypto market, according to the Economic Times.

“Owned and administered by CoinSwitch, CRE8 tracks the performance of eight crypto assets that represent over 85 per cent of the total market capitalization of cryptos traded in Indian rupee. The index is based on real trades on the CoinSwitch app, trusted by 18 million registered users,” the company told ET.

The index provides a real-time look into the Indian crypto market based on CoinSwitch transactions, the ET reported. It is refreshed more than 1,400 times a day.

“CRE8 is a demonstration of our commitment to bring more transparency to the crypto market and equip users with a simple, easy-to-understand measure of the Indian market,” CoinSwitch Kuber CEO Ashish Singhal said.

Founded in 2017, CoinSwitch Kuber is backed by investors including Andreessen Horowitz (a16z), Coinbase Ventures, Tiger Global, Sequoia Capital, Ribbit Capital and Paradigm. The company is valued at $1.9 billion.

© 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.

South Korean police said earlier this week that they had arrested a man in his 30s on fraud charges involving the theft of about $658,000 in cryptocurrencies through personal data leaked on a social media platform called Naver Band, Forkast reported.

The victims’ personal data, including crypto exchange account information, was said to be mistakenly exposed by an administrator on the social media platform.

About 90 people had crypto taken between January and May, the report said, with one victim claiming to have lost more than $400,000.

Criminal cases involving cryptocurrencies in South Korea have been increasing, according to police, with victims numbering 8,891 in 2021, up from 388 in 2018, the report 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.

Abu Dhabi and the Abu Dhabi Investment Office (ADIO) are partnering with web3 identity platform and NFT domain name provider Unstoppable Domains to give free crypto domains to all women who live in the UAE capital, according to a news release.

The move aims to increase opportunities for women to learn about and ultimately participate in web3 in Abu Dhabi, where 50% of the small to medium-sized enterprises are already women-owned.

The initiative, which was also tweeted by ADIO, provides women of Abu Dhabi a decentralized web address and digital identity that gives them complete control of their data and content within a web3 space that they fully own.

Abu Dhabi is looking to encourage participation in the web3 space by women across all communities as the emirate ramps up its efforts to become a Middle East crypto hub.

Binance received in-principle approval in April to operate in Abu Dhabi as a broker-dealer in digital assets, and later that month Kraken was granted a license to operate a regulated digital assets 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.

Bermuda is betting that its transparent digital-asset regulations will attract more cryptocurrency business amid recent market turmoil, the Wall Street Journal reported on Friday.

Bermuda, which has a comprehensive framework regulating cryptocurrency, is doubling down on its understanding of international business and a trained workforce to continue developing its digital-assets industry, the WSJ said. Bermuda’s approach comes as some crypto companies say regulatory uncertainty creates a barrier in many places.

“We are aware of the recent devaluation in the price of cryptocurrencies and remain confident that it does not threaten the island’s ability to become a crypto hub,” Jason Hayward, Bermuda’s minister of economy and labor, told the WSJ. “This industry downturn is likely to advance our goal and positively impact our long-term growth and role in this sector.”

A retreat from risky investments amid rising interest rates and high inflation has seen more than $1 trillion in digital money disappear since November, the WSJ noted.

© 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.