The Crypto Currier - 21st June 2022

This week in the Crypto Currier:

The lawsuits are starting. Class action suits are forming against Terraform Labs for failed stablecoin TerraUSD and against the exchanges that listed it. A Dogecoin investor has filed one against Elon Musk for manipulating the token's price. Crypto lending platform Celsius has reportedly hired restructuring lawyers and Three Arrows Capital crypto fund is facing insolvency rumours and its founders have allegedly 'ghosted'.

Blockchain startup to tokenise US Air Force supply chain budget using blockchain

Blockchain startup SIMBA Chain is working on a project to tokenise the supply chain budget in the United States Air Force. The project will track the movement of funds between departments and suppliers and keep tabs on key potential supply risks.?“DOD’s budgeting process can create mismatched incentives for military departments and their field commands, leading to less efficient execution of strategic goals,” said Jeff Curtis, SIMBA Chain's Director of Defense and Supply Chain. This “will bring greater transparency to actual expenditure of resources, identifying execution vs intent mismatches.”?(Ledger Insights)?Read More

Dogecoin investor sues Elon Musk, Tesla, SpaceX for $258 billion

An American Dogecoin investor has filed a class action lawsuit accusing Elon Musk and his companies Tesla and SpaceX of operating 'an illegal racketeering enterprise to inflate the price of the cryptocurrency'. The lawsuit mentions Musk's frequent references of Dogecoin on his Twitter account and his references to himself as the “Dogefather” as what is claimed is proof that Musk has been controlling the cryptocurrency and is liable for damages for causing the token price to spike. The complaint calls for triple the damages of $86 billion, the amount the plaintiff alleges has been lost by investors since Musk first started tweeting about Dogecoin, which has fallen from its high of nearly $0.74 to just over $0.05. The complaint says “Since Defendant Musk and his corporations SpaceX and Tesla, Inc began purchasing, developing, promoting, supporting and operating Dogecoin in 2019, Plaintiff and the class have lost approximately $86 billion in this Crypto Pyramid Scheme.”?Dogecoin promptly rose by 8.5% in around 24 hours on Sunday after he tweeted he would keep buying it....?(TechCrunch)?and?Business Insider

Coinbase is facing class action suits over unstable stablecoins GYEN, TerraUSD

A class-action suit has been filed against Coinbase accusing the crypto exchange of failing to do due diligence of Terraform Labs before it listed the now failed TerraUSD, and of misrepresenting its risk as an algorithmic stablecoin. The suit alleges Coinbase failed to disclose its financial relationship with Terraform Labs, that its investment arm, Coinbase Ventures, was one of the largest backers of Terraform Labs, and that was additional motivation for the company not to disclose TerraUSD’s volatility. This is the second class-action suit outstanding against the exchange, following one filed last month in connection with the de-pegging of GYEN in November.?(Cointelegraph)?Read More

Class action suits forming for investors affected by Terra fallout?

In addition to US investors filing a class action suit against Coinbase for their role in promoting Terra, another class action suit has been filed against Terraform Labs and its founder Do Kwon for selling unregistered securities, making false statements about the stability of TerraUSD stablecoin and its Luna token to induce investors to purchase them.?(Business Wire)?Lawyers at UK law firm CMS is looking at what can be help affected UK investors. They invite affected investors to email?[email protected]?

$10 Billion Crypto Hedge Fund Three Arrows Capital ‘Ghosted’, Insolvency Rumours

$10 billion dollar crypto hedge fund Three Arrows Capital has been the focus of rumours that it is unable to meet lender margin calls and is facing insolvency. Customers are reportedly unable to withdraw their funds and 3AC founders have reportedly stopped responding to requests for withdrawal. Firms are trying to distance themselves from the fund to assure their own customers. 3AC had become a prominent investor in the crypto space.?(Vice)?The fund has allegedly confirmed rumours of insolvency, according to a The Wall Street Journal report. It has hired a team of legal and financial advisors to “work out a solution for its investors and lenders” as stated by 3AC co-founder Kyle Davies. It reportedly suffered “heavy losses from a broad market selloff” having been exposed to LUNA and stablecoin UST which lost almost 99% of their values.?(Bitcoinist)

Crypto Lending Platform Celsius Is Reportedly Running Out of Options to Stay Solvent

According to a report by crypto research firm Kaiko, crypto lending platform?Celsius may have limited options left to stay solvent, after its decision to freeze withdrawals contributed to the current crypto crash. The report says Celsius now finds itself in a “Lehman-esque” position after a combination of poor risk management, bearish market conditions, and overexposure to staked Ether or stETH, a derivative of Ethereum. Kaiko thinks the firm may not regain trust of crypto buyers even if it survives. (Bloomberg)?Read More

Celsius Reportedly Hires Restructuring Lawyers and Citigroup For Options

Celsius has reportedly assigned Citigroup to advise on its next steps, including offers and Nexo’s bid to buy some of its assets. The crypto lending platform has also reportedly hired restructuring lawyers from Washington, DC-based law firm Akin Gump Strauss Hauer & Feld “to advise on possible solutions” for its “mounting financial problems”?and explore potential financing options from investors. according to a report by Wall Street Journal.?(Blockworks)and?(Crypto News)

Celsius exodus: $320M in crypto sent to FTX, user withdrawals paused?

In addition to pausing its customers' withdrawals, Celsius has reportedly moved $320 million worth of funds from Aave into FTX exchange for reasons not specified. This has left the crypto community speculating, leaving some to question how the platform is managing user funds. (Cointelegraph)?Read More

Crypto Lending Platform Babel Halts Withdrawals Citing ‘Liquidity Pressures’

Crypto lending platform Babel has halted withdrawals citing liquidity pressures days after Celsius?paused withdrawals over what it called "extreme market conditions." A Babel notice said “During this period, redemptions and withdrawals from Babel Finance products will be temporarily suspended, and resumption of normal service be notified separately”. Babel, which terms itself “the world’s leading wholesale crypto financial services provider,” had received a valuation of $2 billion after it completed an $80 million Series B financing round last month. At the end of 2021 Babel had an outstanding loan balance of more than $3 billion. It said it was in close communication with all related parties on the actions it was taking in order to best protect its customers. (Bankless Times)?Read More

49.94% of Total Bitcoin Supply In Loss As BTC Drops Below $20k

Bitcoin dropping below $20k has put almost 50% of total bitcoin purchases at a price less than their purchase price. The metric checks the transfer history of each coin on the chain. If the previous selling price of a coin was more than the current BTC price, then that particular coin is being held at some loss right now. During the last two bottoms of the bitcoin price, between 55-60% of the total supply was in loss. (NewsBTC)?Read More

Bitcoin Long-Term Holders Now Own Nearly 80% Of Realised Cap

Long term holders- those that have been holding their coins without selling or moving for at least 155 days now hold nearly 80% of Bitcoin. Historically, Bitcoin has tended to form bottoms around when the long-term holder share of realised cap has exceeded 80%. (NewsBTC)?Read More

The Bank for International Settlements (BIS) to launch market intelligence platform

The Bank for International Settlements (BIS) Innovation Hub will launch a new set of projects targeting traditional and crypto payments including a cryptocurrency market intelligence platform and security for retail?central bank digital currency. The project is largely driven by the recent?collapse of several stablecoin projects?and DeFi lending platforms. Its official announcement says “The project's goal is to create an open-source market intelligence platform to shed light on market capitalisations, economic activity, and risks to financial stability.” (Cointelegraph)?Read More

Magic Internet Money token latest stablecoin to lose its dollar peg?

Magic Internet Money (MIM) of the Abracadabra ecosystem is the latest US dollar pegged stablecoin to lose its peg. The sudden de-pegging saw the token’s price drop to $0.926 in three hours on June 17th. Autism Capital has claimed, citing insider knowledge, that Abracadabra accrued $12 million in bad debt as a direct result of Terra’s sudden downfall, which has been refuted by founder Daniele Sestagalli. (Cointelegraph)?Read More?There have also been allegations that the convicted fraudster co-founder of the scam exchange Quadriga, Michael Patryn, is associated with the project?(Vice).

NFT Real Estate Sale Goes Awry after $12M Price Drop due to Ethereum price crash?

On May 30, a landlord listed an office building in New York City’s Flatiron District for sale as an NFT on the main NFT marketplace, OpenSea, for 15,000 ether, worth $29 million at the time. However, in the two weeks since he listed the NFT for sale, the value of 15,000 ether dropped to about $15 million. Luckily for the landlord, no one bought the property. Still, this shows a risk of listing real world assets in crypto. One reason Chris Okada, the landlord, wasn't worried about the price drops was that the legality of a title deed — or any other right of ownership — transferred via cryptocurrency is legally uncertain at best. The legalities involved in real estate sales mean the NFT cannot “warrant the completion of the real estate transaction, or reflect the transfer of the deed or title. The traditional real estate process must still be complete.” And so the sale of the NFT was not for the title to the property. But rather “exclusive rights to acquire the building all its uses rights & related deed covenants.” Basically, an option. (Pymnts)?Read More

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