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Gigantic Rebirth, a pseudonymous crypto trader also known as GCR who made a $10 million wager over the future price of LUNA, has doubled down on his bearish bet by shorting the coin to the tune of another $10 million.

GCR challenged Do Kwon, the CEO of LUNA creator Terraform Labs, to a $10 million bet in March that LUNA would be trading below $88 in March 2023. Kwon accepted and transferred $10 million worth of stablecoins to be held in escrow pending the outcome of the wager.

GCR says he later sought to up the ante by proposing bets of $50 million and then $20 million — although Kwon didn’t respond to either offer. After being rebuffed, GCR says he’s turned to the financial markets to profit if LUNA declines.

“Update on ‘the bet’,” GCR tweeted to his 114,000 followers on May 7. “Since my 20 million wasn’t able to be matched on LUNA, I made the bet by myself with derivatives.” 

Speaking to The Block on Monday, GCR said he believes LUNA will decline under the pressure of other Layer 1 networks launching their own high-yield decentralized stablecoins. GCR likened the situation to how OlympusDAO forks contributed to taking market share from the original — as the success of one project tends to spawn imitators who will drain liquidity from the original.

GCR advertised the trade on his Twitter account, showing a $10.3 million short position on LUNA at an open price of about $90.

The trade is sitting on a 33% profit, based on the current price of LUNA, netting GCR about $3.5 million in unrealized gains. GCR says he is not worried that advertising his short position could spur efforts to liquidate him.

“I think for LUNA to liquidate me, the market cap would have to reach the level of Saudi Aramco or something; [I] have quite a good amount of margin,” GCR told The Block. Saudi Aramco, the world’s biggest oil producer, is worth more than $2 trillion.

LUNA enjoyed a significant price run-up following Kwon’s bet and reached an all-time high of $119 in early April.

Since then, the price of LUNA has fallen sharply, down almost 50% from its peak, a situation further exacerbated by UST, he most popular stablecoin on the Terra ecosystem, temporarily becoming de-pegged over the weekend. The token was trading for just over $60 at 10:15 a.m. ET on Monday, according to CoinGecko.

Terra has not responded to The Block’s request for comments about GCR’s short position as of the time of publishing.

© 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.

Compound Treasury, a crypto firm that allows institutions to tap into the interest rates available on the Compound protocol, nabbed a B- rating from S&P, making it one of the first offerings in decentralized finance to receive such a score from a major rating agency. 

Credit ratings provide investors with insights into the degree to which corporations or governments issuing debt will meet their obligations in a timely fashion. Those ratings range from D all the way up to triple-A. 

Compound Treasury said the rating could increase in the future as part of ongoing “discussions” with S&P. 

A B score, according to S&P Global’s website, indicates “more vulnerable to adverse business, financial and economic conditions, but has the capacity to meet financial commitments.” Countries with B- credit ratings include the likes of Angola, Belize, and El Salvador. 

Still, the rating provides a signal to users “an expectation of limited loan losses on the Compound Treasury platform.” 

Compound’s Robert Leshner told The Block that the rating represents “a watershed moment for our industry, and signals that DeFi is an equal peer to traditional financial markets, and ready for institutional capital.”

On the comparison to risky countries, Leshner said: “It’s not apples [to] apples because Compound Treasury is a daily liquidity product, whereas with unstable countries you’re taking extreme duration risk.”

Juicy yields have been one draw of institutional and retail investors alike to the crypto market. However, retail offerings such as Coinbase’s Lend product and BlockFi’s interest accounts have attracted the attention of financial regulators in the US. 

© 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.

Meta will start testing digital collectibles and NFTs on Instagram this week, according to chief executive Mark Zuckerberg.

Creators and collectors on Instagram will now be able to use NFTs as profile pictures, similar to a move other social media platforms like Twitter have done in recent months.

A similar feature will be coming to Facebook soon as well, Zuckerberg confirmed, though he didn’t give an exact date. Creators will also soon be allowed to use augmented reality NFTs on Instagram Stories through Spark AR, a free studio that lets businesses and private users create their own filters.

This move will let creators place digital art into physical rooms and spaces, per the Meta CEO.

The news comes after a weekend of speculation that Meta will support NFTs from Ethereum, Polygon, and Solana. CoinDesk first reported the news of the then-pending pilot.

This article will be updated with more information on the subject as it unfolds.

© 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 Goods and Services Tax (GST) Council is weighing a proposal to impose a 28% tax on all cryptocurrency transactions, according to a report by CNBC-TV18 on Monday.

“The proposal is to levy 28 percent GST on services and all activities related to cryptocurrencies soon,” a source familiar with the issue told CNBC-TV18. The matter remains under discussion by a “law committee” working for the council.

If passed, the new tax would increase the overall tax burden for the cryptocurrency sector in India. The proposal comes a month after India’s finance ministry began imposing a 30% tax on all personal income generated from cryptocurrency.

GST is an indirect tax paid on all goods and services in the country. It’s governed by the GST Council. Under the current GST system, there is an 18% tax rate levied on crypto transactions classified as financial services by crypto exchanges. 

According to the report, the objective of this proposal is to bring crypto-specific GST taxes into line with tax rates proposed for online gambling and betting services in India.

© 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 exchange Bitstamp announced on Monday that CEO Julian Sawyer has left the company, with Europe CEO JB Graftieaux promoted to replace him. 

Sawyer, who had been in the role for 18 months, has “decided to pursue other opportunities,” Bitstamp wrote in a statement on Monday, confirming reports from The Block on Saturday. 

Graftieaux served as Bitstamp’s chief compliance officer between November 2014 and February 2016 before he left for a five-year stint at eBay, according to his LinkedIn profile. He rejoined Bitstamp as Europe CEO a year ago. 

“JB was with Bitstamp in its early days, and has admirably led our European business over the past year. We’re pleased to welcome a CEO with such an impressive track record, and very much look forward to the contribution and perspective he will bring to the company in his new role,” Nicolas Huss, Bitstamp’s chairman, said in the statement. 

Just last month, Sawyer sat down with The Block for an interview at the Bitcoin 2022 conference in Miami, where he outlined his grand plans for growth. The company, he explained, was pinning its future on solid customer service and reliability as it targets “underserved” audiences including women and older investors. 

Bitstamp, which was acquired by private equity firm NXMH in 2018, controls only about 2% of the market for spot trading between crypto and fiat, compared with about 27% by market leader Coinbase.

© 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 startup co-founded by crypto influencer Irene Zhao is raising fresh financing in a private round led by Blockchain Capital.

The round values Zhao’s SO-COL — which aims to ‘supercharge’ influencers’ output with non-fungible tokens (NFTs) — at $100 million, according to people familiar with the matter. Zhao confirmed those details in an interview with The Block. The exact size of the round is yet to be determined, as discussions with investors are ongoing.

“We are helping all the creators and influencers who are completely web2 to get into web3 by giving them a very simple user interface,” she said. “They can actually use their Apple Wallet, any wallet they have, to buy anything on our platform.”

Zhao, an Instagram model and entrepreneur, demonstrated how NFTs might be used to monetise a social media following earlier this year, when she dropped a collection named IreneDAO. Some 2,600 ether (roughly $6.5 million) of the digital stickers — depicting Zhao in various poses accompanied by crypto catchphrases — have changed hands on OpenSea.

Zhao described the IreneDAO project as a proof of concept for the SO-COL platform.

Social collectibles

Founded by Zhao and co-founder Benjamin Tang, SO-COL closed its $1.75 million seed round as recently as February this year. Animoca Brands and DeFiance Capital co-led that raise, alongside Three Arrows Capital, Mechanism Capital, Global Founders Capital, Double Peak Group, Antifund, Genblock Capital, and Kronos Research.

Zhao describes SO-COL as a ‘web2.5’ play — bridging the gap between crypto natives and internet users who are as yet unfamiliar with tools like NFTs. The company is working with Stripe to offer traditional payment methods for fans, and with StarkEx, the Ethereum scaling platform, to try to trim creator fees, she added.

SO-COL is yet to officially launch, but Zhao sees that changing within the next month. Proceeds from the raise will be used for hiring developers, to continue building the app, and for marketing.

Zhao has already recruited celebrities to help with a promotional push but declined to name them. One partnership involves a Michelin star chef who will use SO-COL to roll out NFTs that grant holders exclusive memberships at their restaurants.

SO-COL will assist creators with a wide variety of NFT-based projects, providing both technology and consulting services.

Sterling Campbell of Blockchain Capital said in a statement that he sees web3 technologies like SO-COL allowing influencers “to token-gate deeper access, exclusive merch, masterclasses, and more.”

“The willingness to pay for deeper engagement is higher than the value that many web2 platforms provide, and web3 brings that engagement directly to the fan,” he continued.

© 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 Luna Foundation Guard (LFG) said Monday that it will lend out hundreds of millions of dollars worth of bitcoin and the stablecoin UST in order to defend the latter’s peg amid a period of market volatility.

As reported Sunday by The Block, UST — the algorithmic stablecoin tied to the Terra crypto ecosystem — slipped below its intended $1 parity, though it has since recovered ground since Saturday’s low. At press time, UST is trading at $0.9955 against USDT on Binance.

In a tweet thread, LFG said that it would “will proactively defend the stability of the $UST peg & broader Terra economy, especially under volatility and the uncertainty of macro conditions in legacy markets.”

The group went on to say:

4/ As a result, the LFG Council has voted to execute the following:

– Loan $750M worth of BTC to OTC trading firms to help protect the UST peg.

– Loan 750M UST to accumulate BTC as market conditions normalize.

— LFG | Luna Foundation Guard (@LFG_org) May 9, 2022

“The traders will trade the capital on both sides of the market to help accomplish both #1 and #2, eventually maintaining parity of the LFG Reserve pool (denominated in BTC) as market conditions progressively stabilize,” the thread went on to explain. 

LFG’s governing council includes Terraform Labs co-founder Do Kwon, Terraform Labs head of research Nicholas Platias and Jump Crypto president Kanav Kariya, among others. 

The Singapore-based non-profit group was formed in January to support the Terra ecosystem as well as “the sustainability and stability of Terra’s algorithmic stablecoins,” according to an announcement post at the time.

In February, The Block reported that LFG had raised $1 billion to build a bitcoin-based reserve intended to serve as a support mechanism for UST’s peg. As of earlier this week, LFG held more than $3 billion worth of bitcoin in its reserve.

© 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.

Thieves are targeting digital currency investors in a wave of “crypto muggings,” UK police said, with victims reporting big sums stolen after their mobile phones were seized, the Guardian reported today.

Criminals are combining muscle with knowhow to part people from their cryptocurrency, according to City of London police. Crypto transfers are irreversible, unlike bank transfers, making the crime attractive to thieves.

One victim was ordering an Uber when muggers forced him to hand over his phone. The gang returned the phone, and the victim later realized that £5,000 ($6,170) of ethereum was missing from his account with the crypto investing platform Coinbase.

In another case, a victim told police his phone was pickpocketed after an evening at a pub, with £10,000 later stolen from an account with investing platform Crypto.com. The victim was using his phone in the pub and figured that thieves saw him type in his account pin.

A third victim said he had been vomiting under a bridge when a mugger forced him to unlock his phone using a fingerprint, then changed his security settings and stole £28,700, including cryptocurrency.

Phil Ariss, who leads the cryptocurrency team for the National Police Chiefs’ Council cybercrime program, said more training was being given to police officers on a variety of crypto-related crimes, and that they were also looking at ways to inform the public about the need to be cautious when accessing a crypto account.

“You wouldn’t walk down the street holding £50 notes and counting them. That should apply to people with crypto assets,” 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.

Instagram, the social media platform owned by Meta, will support non-fungible tokens (NFTs) for crypto art from several major blockchain networks, with the announcement of a pilot coming as soon as Monday, CoinDesk reported today, without citing its source.

Ethereum, Polygon, Solana and Flow, which host most of the trading in digital collectables, are in line for Instagram NFT integrations, CoinDesk said. Still, it added, it was unclear whether NFTs from all four chains would be supported in the launch.

Instagram will not charge users for posting and sharing NFTs, as Twitter initially did for its hexagonal NFT profile pictures in January, CoinDesk said.

Meta CEO Mark Zuckerberg had said in March at SXSW that NFTs would be coming to Instagram, confirming an earlier report by the Financial Times.

© 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 algorithmic stablecoin UST, which is part of the Terra crypto ecosystem, is struggling to maintain parity with the dollar following a Saturday market event.

During the market event, the price of UST hit a low of $0.9857 on Binance against USDT. This trading pair is the most voluminous for UST, with $1.36 billion in volume reported in the past 24 hours.

As previously reported by The Block, UST is an algorithmic stablecoin, meaning that it relies on market incentives to maintain its peg. In addition to a burn mechanism involving the LUNA token, which is used as part of Terra’s governance process, UST is also backed by an ever-increasing reserve of digital assets like bitcoin that can be used to defend the stablecoin’s market parity with the dollar.

It’s unclear at this time precisely why the market event took place. Crypto researcher Mika Honkasalo noted a significant swap of UST for USDC, another stablecoin, on Curve. In fact, following the loss of parity, many UST holders have been swapping their UST for various stablecoins in Curve’s 53 meta pool – evidenced by the imbalance of the pool’s liquidity.

Later Saturday, Honkasalo noted that “keeping the UST peg is leading to hundreds of millions in on-chain ETH sales. Who knows how much crypto is being sold by these entities on CEXs to try & push UST back to $1.”

In the period after the loss of parity, Terraform Labs co-founder Do Kwon took to Twitter to post “I’m up – amusing morning.”

I’m up – amusing morning

Anon, you could listen to CT influensooors about UST depegging for the 69th time

Or you could remember they’re all now poor, and go for a run instead

Wyd

— Do Kwon 🌕 (@stablekwon) May 7, 2022

A market recovery began to take shape following Kwon’s tweet. Parity with the dollar appears to have remained elusive. At press time, UST is trading at $0.9939 on Binance.

 LUNA is currently trading at $61.10, according to CoinGecko data, down close to 16% in the past 24 hours. 

As might be expected, crypto social media was aflame with speculation and heated conversation, with some claiming that the event represented a coordinated effort against UST and Terra.

Saturday’s event wasn’t the first time UST has slipped below dollar parity. In May 2021, UST suffered what the Terra team called “extreme volatility” and temporarily fell as low as $0.96 before recovering.

The event came on the heels of a Thursday drop in the price of bitcoin. At press time, BTC is trading hands at around $34,600 per coin on Coinbase.

Looking beyond crypto, turbulence hit global markets this past week, corresponding with bitcoin’s fall on Thursday. Last week, the Federal Reserve raised interest rates by half a point.

© 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.