Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
Terraform Labs CEO Do Kwon has admitted a BTC crash would be “negative” for the stability of Terraform Labs’ stablecoin UST, but added that he expected BTC to go up. He said he was “sort of betting that the long-term scenario of BTC going up and the reserves being strong enough to withstand UST demand drops is the more likely scenario”. Kwon further said Terra was a Layer 2 solution for the Bitcoin network, claiming that Terra provided a bridge that allowed BTC to be used “across a multitude of applications, from DAOs to NFTs to DeFi”.
A federal judge has dismissed a class action complaint filed in Apr 2020 by investors claiming Binance had “wrongfully engaged in millions of transactions…without registering the tokens as securities and without Binance registering as an exchange or broker-dealer” with the US SEC. The investors claimed the tokens they’d bought in 2017 and 2018 had plunged in value, and wanted compensation for their expenditure on the tokens, as well as related fees paid to Binance. However, judge Andrew L Carter said that as the investors had filed the complaint over a year after buying the tokens, they’d sued too late. He added that since Binance was not a domestic US exchange, domestic securities laws did not apply to the exchange.
Amid the ongoing Russia-Ukraine conflict, the Bank of Japan’s (BOJ) head of payment systems, Kazushige Kamiyama, has urged G7 nations to establish a common regulatory framework for digital currencies as soon as possible. Kamiyama said stablecoins made it easy to “create an individual global settlement system”, which would in turn make it easier for nations to evade more traditional and regulated payment systems that use the USD, EUR or JPY for settlement. He added that such a regulatory framework would influence the design process of Japan’s central bank digital currency (CBDC), though BOJ governor Haruhiko Kuroda had said on Tuesday that the bank had no plans to introduce a digital yen anytime soon.
Boston-based Circle Internet Financial has selected investment bank BNY Mellon as the primary custodian for the firm’s USDC reserves. The partnership will entail the bridging of traditional and digital capital markets, investment management, digital asset custody, cash management for fiat and non-fiat payments, and the exploration of digital cash for settlement. Circle also expects the partnership to “facilitate an exchange of expertise on a range of topics across digital and traditional markets”.
The US SEC has listed crypto assets as an examination priority for market participants this year. The SEC said its Division of Examinations would “conduct examinations of broker-dealers and RIAs (registered investment advisors)” using “emerging financial technologies to review whether the unique risks these activities present were considered by the firms when designing their regulatory compliance programs”. The Division will also “conduct examinations of mutual funds and ETFs offering exposure to crypto assets to assess, among other things, compliance, liquidity, and operational controls around portfolio management and market risk”.
Decentralized insurance platform NodeDAO has announced a strategic investment from investment fund Lingda Capital Trust. Following this investment, both parties plan to jointly expand their activities in the ecological development of blockchain finance. NodeDAO, which is owned by holders of its native token NEI and whose project revenues are derived mainly from revenue shares of partner projects, also plans to launch more discounted purchases of tokens if its community is agreeable. For instance, users can purchase discounted NEI via mainstream and stablecoin assets.
Show me the money
BTC and other major cryptocurrencies plummeted yesterday amid worsening inflation numbers. In the last 24 hours, BTC fell by over 2% to below $46,00, while ETH fell to around $3,300. Several prominent altcoins fared even worse, with DOGE and SHIB seeing a respective dip of 3% and 4.5%, implying shrinking risk appetite amongst investors. These decreases coincided with those of equity markets — S&P 500, Nasdaq and Dow Jones Industrial Average were all down by 1.5% — while gold and the USD rose.