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The Bahamas has turned into an attractive destination for crypto companies looking to set up shop in a jurisdiction with a clear regulatory framework for digital assets — a movement spearheaded by crypto exchange FTX’s announcement to relocate its headquarters to the island nation late last year.

The Bahamas’ emerging crypto scene was on full display during the last week of April, which saw approximately 2,000 industry leaders, public figures and celebrities, such as Bill Clinton and Tom Brady, converge for ‘Crypto Bahamas’ — a four day conference hosted by FTX and finance conference company SALT. 

In this episode of The Scoop, Ryan Salame, Co-CEO of FTX Digital Markets (FTX’s Bahamian subsidiary), explains why he believes the conference was “an incredible success,” and why he thinks the Bahamas is positioned to become a global hub for the crypto industry.

The conference helped to highlight the crypto-friendly nature of the Bahamas, as Salame explains during the interview,

“Some of my objectives were to show off the Bahamas as a jurisdiction, to show why we were there, allow the opportunity for companies to send people to see that this is a great place to do business. So that objective was easily hit.”

Salame told The Block’s Frank Chaparro that over 20 companies are in conversation with FTX about moving their headquarters to the Bahamas.

While the US has yet to solidify its regulatory approach to digital assets, clear legislation in the Bahamas removes the structural uncertainty.

As Salame explains, “All of crypto sits under one regulatory body, versus in the US, you’re seeing the CFTC and FCC debate.”

Salame’s sentiment is shared by former CFTC chair Chris Giancarlo, who gave the regulatory structure for digital assets in the U.S. a “zero” on a scale of 1 to 10 during a panel at the conference.

During this episode, Chaparro and Salame also discuss:

• Improvements for next year’s conference
• FTX’s new campus in the Bahamas
• Carbon credits as digital assets

This episode is brought to you by our sponsors Fireblocks, Coinbase Prime & Cross River
Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, lending desks, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. Fireblocks serves over 725 financial institutions, has secured the transfer of over $1.5 trillion in digital assets, and has a unique insurance policy that covers assets in storage & transit. For more information, please visit www.fireblocks.com.

About Coinbase Prime
Coinbase Prime is an integrated solution that provides institutional investors with an advanced trading platform, secure custody, and prime services to manage all their crypto assets in one place. Coinbase Prime fully integrates crypto trading and custody on a single platform, and gives clients the best all-in pricing in their network using their proprietary Smart Order Router and algorithmic execution. For more information, visit www.coinbase.com/prime.

About Cross River
Cross River is powering today’s most innovative crypto companies, with banking and payments solutions you can rely on, including fiat on/off ramp solutions. Whether you are a crypto exchange, NFT marketplace, or wallet, Cross River’s API-based, all-in-one platform enables banking as a service, ACH & wire transfers, push-to-card disbursements, real-time payments, and virtual accounts and subledgers. Request your fiat on/off ramp solution now at crossriver.com/crypto.

© 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.

Elon Musk said his pending acquisition of Twitter is “on hold” until the social network can give more clarity over the number of fake accounts.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk tweeted from his verified account on Friday. 

He linked to a Reuters report that said Twitter estimated false or spam accounts represent fewer than 5% of its monetizable daily active users.

Musk, the billionaire CEO of Tesla, made a cash offer to buy Twitter for $54.20 per share last month, valuing the company at more than $40 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.

The circulating supply of Luna (LUNA) surged to more than 6.5 trillion by the time the Terra blockchain was halted for a second time in an attempt to salvage the collapsing ecosystem. 

For the last few weeks — up until just three days ago — the supply of Luna was only around 340,000, according to data from Terra Analytics. That was until TerraUSD (UST) lost its peg to the dollar on Monday, kickstarting a downward spiral for Luna, a related token that was supposed to prop up UST’s value.

Under the design of UST, sales of Luna were supposed to help the algorithmic stablecoin keep parity with the US dollar. But once UST lost its peg and investors tried cashing out en masse, the mechanism put a lot of downward pressure on Luna. Worse, the more Luna’s price went down, the greater the downward pressure. This created a vicious cycle that crushed Luna’s price and made its supply accelerate on an exponential scale.

On Tuesday, the network issued 40 million Luna tokens. On Wednesday, the circulating supply of Luna started ramping up and reached 1.5 billion tokens. On Thursday, this reached a new level as it shot up to 176 billion tokens, despite the chain being halted for a short time. It reached 6.5 trillion today and would still be growing had the chain not been halted for a second time.

The supply of Luna is now measured in the trillions. Image: The Block Research.

With the supply increasing by nearly 17,000 times in just three days, developers working on Terra finally called it a day and decided to halt the blockchain early Friday morning until they figure out a way to revive the project. 

“Terra Validators have halted the network to come up with a plan to reconstitute it,” said Terraform Labs on Twitter.

This supply shock has been pounced upon by Bitcoiners, who point to bitcoin’s supply with its fixed emission schedule that will taper out at around 21 million coins.

 “In case you’re wondering what the Weimar hyperinflation was like, Luna is a lot like that,” Nic Carter, a partner at Castle Island Ventures, said on Twitter, referring to the inflation witnessed in Germany’s Weimar Republic in the 1920s.

© 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 miner Core Scientific announced a net loss of $466.2 million in its first-quarter 2022 earnings report, compared with a net income of $6.8 million in the same quarter last year. Total revenue for the first quarter was $192.5 million, from $54.2 million last year.

The industry giant said the net loss occurred because of a $386 million fair value adjustment on convertible notes, $54 million impairment of digital assets, higher total operating expenses of $39.4 million and income tax of $42.4 million.

During the earnings call on Thursday, Core Scientific CEO Mike Levitt said that in spite of “current financial market conditions,” the company was still well positioned to meet its growth objectives.

“Strong operational and financial foundation gives us the confidence to continue to build our capacity at a time where smaller companies may find it increasingly difficult to do so,” Levitt said.

Having previously set a goal of reaching a hash rate of between 40 and 42 exahash per second (EH/s) in 2022, Core Scientific downsized that numbers to between 30 and 32 in its most recent report.

“We have worked to de-risk our 2022 growth to between 30 and 32 exahash, fully supported by our existing capital structure. We preserve the flexibility to expand beyond our plan should capital market conditions improve,” Levitt said.

He added that even in the current environment, Core Scientific benefits from having hosting revenue, owning its own infrastructure and “producing more digital assets than any other company in North America.” 

It currently owns more than 10,000 self-mined bitcoin, Levitt said.

Meanwhile, bitcoin has fallen below $30,000 this week, amid turmoil in the Terra ecosystem.

“I’m often asked whether or not we will sell our self-mined bitcoins,” Levitt said, adding: “We strongly believe in the future of bitcoin and its role in the global financial system. We will continue to do anything in our power to maintain a stable, strong financial position and continue to invest in our growth. That said, we’ve sold digital assets this year, and we expect that will continue to be the case.”

Per Levitt’s comments, the company has adopted a conservative approach. Any possible growth beyond the current outlook will depend on whether it has the right type of capital available, as well as on hardware prices.

© 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.

With its native token LUNA and stablecoin UST in freefall, Terra says it has halted its blockchain for the second time in 24 hours.

In a tweet posted at 10:13pm Eastern Time, Terra said its blockchain “has officially halted at block 7607789.”

“Terra Validators have halted the network to come up with a plan to reconstitute it. More updates to come,” it continued.

The Terra blockchain has officially halted at block 7607789.

Terra Validators have halted the network to come up with a plan to reconstitute it.

More updates to come.

— Terra (UST) 🌍 Powered by LUNA 🌕 (@terra_money) May 13, 2022

The blockchain was first paused on May 12 over fears that it had become vulnerable to attack. Developers at Terra then announced at 2:05pm ET that block production had resumed, albeit with staking disabled.  

The crisis at Terra was triggered when its algorithmic stablecoin UST de-pegged from the US dollar. It now sits at around $0.19, per Binance data, despite frantic efforts to restore the peg by issuing huge volumes of LUNA.

The circulating supply of Luna (LUNA) topped 25 billion on May 12, with minting reaching unprecedented levels as Terraform Labs CEO Do Kwon and others try to ease UST selling pressure.

© 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.

Arca—the digital asset hedge fund led by Wisdom Tree co-founder Ryan Steinberg—is not insolvent, despite rumors tied to its recent bets on Luna. 

The firm made headlines on Wednesday for a letter it sent out Tuesday to limited partners in its digital asset hedge fund that outlined how the firm “doubled down” on Luna-powered stablecoin UST.

The crypto, which depegged from $1 over the course of the last several days, sent Luna into a tailspin. The price of the crypto is down nearly 99% after a rally that sent the coin over $100 early in April. 

In a note to investors, Arca said that it believed that Luna would regain its peg after dropping to $0.63 Monday evening. UST is currently trading down more than 70% at $0.23 a coin. 

“After this analysis, we felt, and continue to feel, that UST will ultimately maintain its peg and a number of attractive opportunities had become available,”  Steinberg said in a letter Tuesday. “For example, we were able to purchase UST at a significant discount to par in the DYF (Digital Yield Fund) and then deposit with FTX who were paying 100% APY (annual percentage yield) given the buyer/seller imbalance during peak fear.”

Still, despite being caught flat footed the firm says it is not insolvent, according to a spokesperson. 

Rumors have swirled this week—based partially on the LP alert—that it might be shutting down. 

“Heard Arca is insolvent, but surprised they were only a $500m fund — are they they biggest fund blown up or are there bigger,” said Mike Demarais of Rainbow. 

“The company remains fully solvent and continues to operate. It’s very much business as usual,” a spokesman told The Block. 

Sources told The Block that Arca had exposure to Luna, but that it was not overly concentrated in the coin relative to other holdings across its funds. 

© 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.

Earlier Thursday, The Block reported that the circulating supply of Terra’s native asset, Luna, had ballooned amid an escalating behavioral cycle.

As of around 11:15 a.m ET, that figure stood at roughly 25 billion LUNA. Now, that figure is approximately 401.6 billion, according to data from Terrascope. That represents a change of more than 225 billion LUNA on  May 13 alone. 

The state of affairs has to do with the embattled algorithmic stablecoin TerraUSD (UST) and the redemption mechanism by which they can swap UST for LUNA. As The Block’s Tim Copeland explained in his earlier reporting: “As holders redeem UST for Luna, they increase the supply of Luna and likely sell these tokens on the market. This puts the price of Luna down even further, meaning the next person to redeem their UST creates even more Luna — putting an even greater downward force on the market.”

As such, the price of LUNA has fallen dramatically in the past hour, hitting a low of $0.00004 on Binance. The token is currently trading at $0.00005. Binance’s LUNA/USDT order book shows the lowest buy order as $0.00002.

Following the publication of this report, Binance announced that it was halting the trade of LUNA across most of its spot trading pairs, including LUNA/USDT and LUNA/BTC. Binance will continue to allow trading of LUNA against Binance USD and UST. 

Updated with Binance announcement.

© 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 miners fared better in the markets on Thursday, following another day of double-digit falls on Wednesday.

Notably, TeraWulf was up by 17.36% by the end of the trading session. Other companies saw relatively modest recoveries, among them Core Scientific (+7.24%), Riot Blockchain (+6.87%) and BIT Mining (10.83%).

Hut 8 announced its Q1 2022 results on Thursday morning, reporting C$53.3 million in revenue ($40.9 million) and net income of C$55,708. The company’s stock rose by around 12% in the morning, before dropping back down and closing the day at +0.32% on the Toronto Stock Exchange.

Here is a look at how other crypto mining companies did in the markets on Thursday, May 12:

© 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.

Shares in Robinhood Markets (HOOD) rose as much as 28% in after-hours trading as a 13D filing revealed that Sam Bankman-Fried (SBF) had taken a 7.6% stake.

Sam Bankman-Fried, founder and CEO of the cryptocurrency exchange FTX, purchased 56 million shares of HOOD. This gave him a 7.6% stake in the retail trading platform, according to the 13D filing. 

SBF purchased the shares through a company called Emergent Fidelity Technologies Ltd., which Bankman-Fried is the sole owner of. The stake is worth roughly $560 million. 

HOOD’s stock was up 28% in after-hours trading after closing at $8.56 earlier in the day, according to NASDAQ data via TradingView.

© 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

• In this weekly series, we dive into some of the most interesting data and developments across the Layer 1 blockchain landscape, from DeFi and bridges to network activity and funding
• The Terra protocol has undergone a collapse of epic proportions with the depegging of Terra USD (UST) from the U.S. dollar and a dramatic decline in the price of LUNA
• This week, we take a look at the fall of one of the most prominent L1 protocols in crypto and the impact to its ecosystem thus far 

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