Around the Blockchain with Huobi Learn (30 May 2022)

Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
A proposal to permit companies using crypto in cross-border settlements has been included in a draft law to regulate crypto in Russia. While the draft law bans crypto as a means of payment, it does suggest recognizing them as an investment tool, and the change was made in coordination with the ministries of finance, economy, digital development, internal affairs, the Federal Tax Service, and Russia’s financial watchdog, Rosfinmonitoring. The Central Bank of Russia, however, is missing from the list as it still objects to any form of crypto legalization.
Dmitry Gora, the head of Belarus’ Investigative Committee, recently revealed that the country has confiscated millions of dollars worth of crypto assets. Crypto activities were legalized in Belarus in 2018 but last year, president Alexander Lukashenko implied regulations might be tightened. According to Gora, law enforcement agencies had to find a way to confiscate digital assets used in the drug trade and economic crimes; seizing crypto funds were then permitted following a legal procedure by the Ministry of Justice last month.
Binance has received approval from Italy’s financial regulator, Organismo Agenti e Mediatori (OAM), to operate as a crypto service provider in the country. Binance CEO Changpeng Zhao said “clear and effective” regulation was “essential for mainstream adoption” of crypto, and an announcement from the exchange stated that it had recently established Binance Italy as its legal entity in the country. This comes after it recently received similar approvales and licenses in France, Bahrain and Dubai.
The Ethereum network’s average fee fell to $2.96 per transaction on Sunday afternoon (ET), its lowest in over 10 months. Its median fees were even lower at $1.56 per transfer (as of 29 May). Since Sunday, average fees have risen slightly to $3.56 per transfer but remain low after dropping since mid-Feb. Moving an ERC20 token like USDT or USDC costs around $4.37 per transfer, and L2 transfer fees to send ETH were also quite low on Sunday — Zksync’s and Loopring’s ETH transaction fees were around $0.04 per transfer, while Optimism’s were $0.12.
Crypto’s ups and downs are not restricted to financial markets. It may or may not be coincidence, but one of FPS game Apex Legends’ more difficult-to-use characters, named Crypto, is upsetting players of the game after undergoing a Season 12 rework. A 28 May post by user Kai-ni on the game’s subreddit bemoaned how Crypto’s “buff” felt “more like a nerf” and that all it did was “frustrate current Crypto mains”. We wonder what token Crypto owns.
Show me the money
Since Terra 2.0 launched on Saturday, LUNA’s price has plummeted by about 69% to $5.71 after opening at $18.87, indicating a lack of confidence in Do Kwon’s revamp. Under his ‘revival’ plan, new LUNA tokens, known as LUNA 2, are being airdropped to investors who previously held LUNC (Luna Classic), USTC (TerraUSD Classic) and aUST (Anchor Protocol UST). However, many investors on Twitter have suggested they would rather recover whatever lost capital they can and dissociate from the project for good.
At the same time, Binance will start a multi-year distribution of LUNA to eligible users tomorrow, and will list the token for trading through its Innovation Zone, a dedicated trading zone for volatile and high-risk assets. Some in the community who plan to buy LUNA eventually when things stabilize are expecting a further crash when the Binance drop goes live, implying that investors who mainly used the Anchor Protocol would want to cash out as they were wholly uninterested in the Terra ecosystem.
BTC has apparently reached a make-or-break point, with its future dependent on whether or not it can hold the $29,000 support level. It looks set to close a ninth consecutive red weekly candle and thereby make a new record after shedding over 22,800 points in market value over the past two months, from a high of $48,222 to a low of $25,365. Though $29,000 has held as support for nine weeks, BTC losing this crucial foothold would likely result in a 22% drop towards the 200-week moving average at about $22,300.
The sheer scale of BTC’s losses over the last nine weeks implies it may have reached oversold conditions, in which case, BTC would need to regain a $31,000 support level as soon as possible to draw investors back. If it manages to do so, there may be a spike in buying pressure that could raise prices towards $34,700.
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