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DeFi carnage, Chef Nomi’s admission and $625K prize to crack Monero

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Coming every Sunday, Hodler’s Digest tracks every important crypto news story from the previous week. Essential reading for all Hodlers!

 

Top Stories This Week

 

DeFi goes boom as top tokens crash by 50%But enjoy a sudden rebound

It was an industry that looked like it was overheating for some time, and finally, at least for a short while, it appeared that the DeFi bubble had well and truly burst.

Half a dozen major DeFi tokens shed half their fiat value, and the sell-offs erased the gains enjoyed by most DeFi markets during August’s volatility.

Some members of Crypto Twitter were unsentimental, to say the least. One of them, Stack Those Sats, wrote: “DeFi is going straight into the ground. Just another series of scams.”

But wait! It wasn’t over yet. The decentralized finance sector dusted itself off on Thursday, rebounding by 19% in just 24 hours. Some tokens, such as Yearn.finance, gained 37.6% over this period alone.

All of this suggests that rumors of DeFi’s demise have been greatly exaggerated. New money continues to flow into existing protocols, and more are being built.

 

Chef Nomi has returned all funds to the SushiSwap community

So, what led to DeFi’s dark week? Well, it may be down to how the anonymous founder of SushiSwap — “Chef Nomi” — withdrew $14 million from the company’s coffers shortly after insisting the money was meant for development and wouldn’t be taken from the company.

It was a recipe for disaster. The SUSHI token sold off almost immediately, with people losing confidence in the project’s viability. It was so swift that it torpedoed the entire crypto industry, taking the rest of DeFi and even Ether and Bitcoin down with it.

Chef Nomi later insisted to Cointelegraph that they did not pull an exit scam, and in a surprising turn of events, they later apologized and returned the cash to the project’s development fund. On Twitter, they wrote: “To everyone. I f—– up. And I am sorry.”

They has now said he will let the community decide how much they deserves as the original creator of SushiSwap, adding that they would like to continue helping develop the project’s tech from behind the scenes. Whether the community will accept this offer remains to be seen.

 

Bitcoin can hit $16,000 but only if this resistance level finally breaks

Bitcoin entered the weekend on a strong footing after a relatively uneventful Friday saw its price continue to fluctuate between $10,200 and $10,400. With BTC consolidating into a tighter range, it looked like traders were readying themselves to test the $15,000 resistance.

According to Cointelegraph analyst Michaël van de Poppe, breaking through $11,800 would mean a potential target of $16,000 would be on the table.

He wrote that the market movements we are seeing now are very similar to what was seen the year before Bitcoin headed to all-time highs of $20,000. But he cautioned: “The current market structure is resembling only the start and build-up of a potential bull run similar to the sentiment and momentum of late 2016.”

Overall, van de Poppe said that the total market capitalization of cryptocurrencies “is showing a healthy correction in an upward trending market.”

And he predicted: “If the total market capitalization holds the $270 billion to $275 billion areas for support, further continuation upward is likely. If a new impulse move occurs, the next resistance and target zone can be seen at $550 billion.”

IRS offers a $625,000 bounty to anyone who can break Monero and Lightning

The U.S. Internal Revenue Service is offering a bounty of up to $625,000 to anyone who can break “untraceable” privacy coins such as Monero — as well as trace transactions on Bitcoin’s Lightning Network. 

America’s taxman is accepting submissions in the form of working prototypes until next Wednesday. Successful applicants will be given an initial payment of $500,000.

They will then be able to use this grant to develop their prototype into a working concept over eight months. Once the pilot test is completed and approved by the government, a further $125,000 grant will be awarded.

It doesn’t take a rocket scientist to figure out why the IRS is so keen to crack Monero. Criminal organizations much prefer XMR to more traceable crypto assets such as Bitcoin, and it’s increasingly being used by ransomware groups.

Blockchain analytics firm CipherTrace claims to have a new tool that can trace Monero transactions, although its capabilities are yet to be confirmed.

Schiff buys more Bitcoin — But there’s a twist

Crypto skeptic Peter Schiff is probably wishing he hadn’t put a poll on Twitter right now.

On Monday, he explained that his 18-year-old son Spencer had just bought more Bitcoin.

He asked his followers: “Whose advice do you want to follow? A 57-year-old experienced investor/business owner who’s been an investment professional for over 30 years or an 18-year-old college freshman who’s never even had a job.”

Just 18.7% of the 82,906 respondents supported the “experienced professional,” while 81.7% backed “the kid.”

Many people were approving of Spencer’s decision, with Quantum Labs CEO Usman Majeed writing: “Your son will be a multimillionaire at least by the time he’s 57 if he keeps buying Bitcoin.”

Morgan Creek Digital co-founder Anthony Pompliano also thought the father and son double act was a work of genius. He wrote: “Using your son to hedge your gold bet is a great idea. Gold goes up, you benefit. Bitcoin goes up, your son benefits. Clever way to be long [on] both assets without publicly capitulating on gold.”

Winners and Losers

 

 

At the end of the week, Bitcoin is at $10,316.65, Ether at $367.77 and XRP at $0.24. The total market cap is at $339,174,021.634.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are IOST, Yearn.finance and Flexacoin. The top three altcoin losers of the week are SushiSwap, Celo and Arweave.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

 

Most Memorable Quotations

 

“Just convinced @jimcramer to buy Bitcoin. Reply to this tweet with your best meme or GIF to welcome the world’s newest Bitcoiner.”

Anthony Pompliano, Bitcoin bull

 

“The crypto people, just about the most enjoyable group of people I’ve ever met. They are f—— crazy. They are crazy on social media, they are crazy on Twitter, they have the same f—— personality I do, they are gamblers at heart, they slant, they laugh at themselves, they just want to make money. I will be in crypto. My heart is crypto. But I just gotta figure it out.”

Dave Portnoy, Barstool Sports founder

 

“History indicates that we may have ample room for higher volatility and gains in the months ahead.”

Kraken report

 

“We have journalists all over the world who care deeply about this industry and the technology and philosophy of blockchain.”

Jon Rice, Cointelegraph’s new editor-in-chief

 

“Against my advice my son @SchiffSpencer just bought even more #Bitcoin. Whose advice do you want to follow? A 57-year-old experienced investor/business owner who’s been an investment professional for over 30 years or an 18-year-old college freshman who’s never even had a job.”

Peter Schiff, crypto skeptic

 

Prediction of the Week

 

Remember, remember Bitcoin tanks in September: Kraken report

The U.S.-based cryptocurrency exchange Kraken has predicted that September will bring excessively negative returns for Bitcoin.

According to its new report, September is historically Bitcoin’s worst-performing month, with an average return of -7%. And given how BTC has underperformed in its average returns for most months of 2020 so far, this month could be even worse than usual.

Moving away from the short term though, it isn’t all doom and gloom. Kraken said a record share of BTC’s supply has not moved in more than 12 months, and “historically, this dynamic has foreshadowed a new bull market.”

However, Kraken’s crystal ball isn’t necessarily what it’s cracked up to be. The exchange recently predicted that a BTC rally of between 50% and 200% was imminent on Aug. 10 when Bitcoin was trading for between $11,500 and $12,000. (Spoiler alert: nothing happened.)

FUD of the Week

 

Bank of France: Stablecoins could impact EU financial sovereignty “for decades”

The governor of the Bank of France has warned that Europe cannot afford to lose momentum in tackling the challenges posed by private sector global digital assets. 

François Villeroy de Galhau’s warning came as five EU governments — Germany, France, Italy, Spain and the Netherlands — called for tough action from the European Commission as it drafts regulations for stablecoins.

All of this could be rather bad news for Facebook’s Libra, which has had little luck in persuading politicians, bankers and regulators in the U.S. and Europe that it’s got what it takes to launch a private currency in a way that wouldn’t destabilize the global economy.

Villeroy de Galhau also stressed that the European Central Bank can’t afford to “lag behind on a CBDC.” This could serve as a hint that we may see some more movement from the eurozone fairly soon.

Chinese authorities charge six people over $5.8 billion PlusToken Ponzi scheme

Six of the 109 people recently arrested by Chinese police in connection with the $5.8-billion PlusToken Ponzi scheme have been charged.

According to officials, they are “suspected of organizing and leading criminal pyramid schemes.”

Of the 109 arrested in July, 27 were believed to serve as executives for the scam, while the remaining 82 were described as “key” promoters. 

PlusToken published its white paper in February 2018, claiming to be a South Korean crypto exchange offering interest-bearing accounts generating returns of between 10% and 30% per month in the form of its native token PLUS.

The scam took in more than 200,000 BTC, 789,000 ETH and 26 million EOS from approximately 3 million unsuspecting investors.

 

Banks failing to identify up to 90% of suspicious crypto transactions

Financial institutions around the world have reported 134,500 suspicious transactions related to virtual currencies over the past two years. But according to CipherTrace, this may just be the tip of the iceberg.

The blockchain forensics firm says many financial institutions have developed inadequate “home-grown” systems for identifying cryptocurrency-related accounts and transactions.

Current strategies result in “many false positives and misses significant, large amounts of funds flows,” its report warns.

Many banks use lists of the names of crypto exchanges to flag transfers associated with cryptocurrency, but CipherTrace estimates that 70% of trading platforms may not be on these lists, meaning up to 90% of actual transaction volume isn’t accounted for.

The problems don’t end here. Many crypto exchanges operate under a business name that differs from their branding, and few financial institutions screen for exchanges outside of the top 100.

 

Best Cointelegraph Features

 

DeFi: A shrinking window of opportunity

With regulators unlikely to change old-fashioned rules in favor of the emerging market, DeFi might be burdened under fraud and new portions of restrictions, writes Oleksii Konashevych.

 

Ethereum 2.0 is coming, unlikely to speed up enterprise DeFi adoption

Ethereum 2.0 is coming this year, and while enterprises won’t use it immediately, Rachel Wolfson says the rise of DeFi will play a significant role for organizations.

 

Bitcoin price balances at $10,000: Discussing BTC’s next big move

As BTC shows stability above $10,000, what’s next for the world’s biggest cryptocurrency? Joseph Young takes a look at what traders are thinking.





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Beeple Presents NFT Platform WENEW to Sell Moments in Time

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Beeple asserted that the NFTs constituted a new prototype that feeds off the remarkable achievements in human history, which can be commemorated and honored through the platform.

Mike Winkelmann aka Beeple, one of the most famous digital artists around the world,  presented WENEW,  the premier curator and provisioner of iconic moments as Non-Fungible Tokens (NFTs). The platform helps people collect stellar instances in sports, arts, and culture on the blockchain.

The platform which aims to ‘immortalize moments on the Blockchain’ has roped in industry giants like TIME, Endeavor, IMG, Universal Music Group, Warner Music Group, The Champions Wimbledon, and Open Earth Foundation. TIME has been delegated as the curation partner, and the work will include assisting WENEW to recognize the awe-inspiring moments in history.

The first auction to take place will commemorate tennis ace Andy Murray’s triumphant feat at Wimbledon in 2013. The home page of WENEW’s website displays an impressive gallery of photos from Andy’s long-awaited victory against Serbian player Novak Djokovic. The bid that commences on July the 2nd will not only sell an NFT but the entire experience, making the auction more riveting. The highest bidder in the deal will be provided VIP benefits like sporting a match with Murray at Wimbledon, along with a couple of tickets to the men’s finals in 2022. The bidder will also enjoy a private behind-the-scenes tour for a wholesome experience.

The Ethereum-run platform will, in addition to blockchain ownership, furnish the collectors with a Physical Artifact of their WENEW moment. With the help of Arweave technology, an IT company specializing in data storage and blockchains, the WENEW moments will be combined with profound editorial works that exhibit an essential history. Some of the ‘premium moments’ will also provide exclusive access to once-in-a-lifetime collectible memorabilia. 

Since Ethereum has been functioning on inflated gas prices (which is the unit that estimates the amount of computational effort required to execute distinct operations), it is not regarded as an eco-friendly blockchain. To uphold the platform’s and Beeple’s claims of supporting sustainable NFTs, WENEW has partnered with Open Earth Foundation which will manifest activities curated to diminish energy-intensive exchanges. The platform also professes to fund enterprises towards a wide-ranging variety of climate programs.

Beeple, the highest-paid NFT artist in the world, asserted that the NFTs constituted a new prototype that feeds off the remarkable achievements in human history, which can be commemorated and honored through the platform. He explained how meaningful memories can shape and inspire people in a way that matters. 

“WENEW exists to facilitate and make concrete these once-abstract connections,” concluded Beeple.

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Chinese Ride-Hailing Firm Didi Targets $60+ Billion Valuation in IPO

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Going by Didi’s updates prospectus, Morgan Stanley Investment Management Inc has shown interest in acquiring a share of up to $750 million in the IPO.

China’s ride-hailing giant Didi Global Inc is expecting that an IPO could value it at over 60 billion. An SEC filing made Thursday shows that the company is going to list its shares on the New York Stock Exchange (NYSE) under the ticker symbol ‘DIDI’.

Didi will offer 288 million American Depository Shares (ADS) or 72 million Class A common stock, valued at $13-$14 each. At the upper end, the company could raise $4.03 billion, making it the biggest US IPO of 2021. It would also be the biggest U.S. share sale done by a Chinese company since 2014.

Moreover, in case of an over-allotment, the company could sell 43.2 million extra shares thereby raising an extra $605M.

Initially, Didi (Xiaoju Kuaizhi Inc.) wanted to list on the Hong Kong Exchanges (HKEX) but turned instead to NYSE. The business sought to mitigate risks for increased regulatory scrutiny in its practices, including using part-time drivers and unlicensed cars.

Already, the State Administration for Market Regulation (SAMR), China’s market regulator, has launched an antitrust probe on Didi. Investigations will determine if Didi has used unfair competitive practices, in addition to transparency in the ride-hailing pricing mechanisms. The probe is the latest, with Alibaba Group (HKG: 9988) and Tencent Holdings Ltd (HKG: 0700) having preceded.

Concerns over more Chinese regulatory crackdown have now cut the company’s IPO valuation by 33%. The drop was also attributed to uncertainty in the company’s growth prospects.

Didi Market Perspective and NYSE IPO

Going by Didi’s updates prospectus, Morgan Stanley Investment Management Inc has shown interest in acquiring a stock of up to $750 million in the IPO. Singapore’s Temasek Holdings Ltd. (SGX: TEKB) would also like to subscribe to $500 million worth of stock. Other giant tech firms in Asia counted as investors are SoftBank Group Corp (TYO: 9984), Alibaba, and Tencent.

Goldman Sachs Group Inc (NYSE: GS), JPMorgan Chase and Co (NYSE: JPM), and Morgan Stanley (NYSE: MS) are the IPO’s lead underwriters. On Thursday, Didi added to this cluster to include Barclays, Citigroup, and BofA Securities, among others.

Founded in 2021, the ride-hailing firm operates in 15 countries internationally, making it one of the top-five private start-ups worldwide. The firm also has over 490 million annual active users globally and it intends to reach 800 million by 2022.

As the company recovered from pandemic-inflicted sales, its Q1 revenue more than doubled year-on-year to reach $6.4 billion. The company also posted a profit for the same period.  Net income was $837 million before shareholder payouts, with a comprehensive net income of $95 million.

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A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies.
Mythology is my mystery!
“You cannot enslave a mind that knows itself. That values itself. That understands itself.”



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Robinhood Delaying Its IPO Plans amid Expansion of Its Crypto Business

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The initial plan of Robinhood was for the IPO to be done in June but the plans stretched to July.

A reliable source has it that In the past, the SEC has been concerned about Robinhood‘s growing business related to cryptocurrencies. While the company may be listed by summer, those plans may as well be achieved later, probably in fall. Robinhood plans to put its house in order and publicize its past financial performances to make way for the public listing. A company’s spokesperson disclosed that a successful Initial Public Offer (IPO) filing was done earlier in the year, March. According to Bloomberg, the initial plan of Robinhood was for the IPO to be done in June but the plans stretched to July.

Robinhood Activities amid Its IPO Plans

Robinhood began trading cryptos two years ago, 2018. Today the company’s portfolio includes Bitcoin, Litecoin, and even meme-based Dogecoin which started as a joke. Besides the mentioned digital coins, clients can get many products on this platform. Robinhood is particularly popular with first time (novice) crypto investors. Robinhood became both popular and controversial during the pandemic and has elected new members to its board. The company is also popular for meme stocks.

The crypto market has been very volatile this year. Bitcoin achieved a high of $64,000 after being backed and endorsed by high-profile investors, notably Elon Musk. However, the rally was short-lived and the prices dipped to as below $30 K in June. Other crypto have been following the same trend increasing uncertainty in the general market.

Sometimes in the near future, Gary Gensler, the current SEC chair, is expected to make momentous rulings on digital assets. Robinhood made the application in a “bad year”. The SEC has been busy, thanks to the many IPOs, particularly for Special Acquisition Companies (SPACs) in their in-tray. These delays have however caused an equity backlog in capital markets. As per Bloomberg’s report, SEC staff has however warned lawyers that this time around, it may take well over a month to review SPAC paperwork. Additionally, they can expect another two to three weeks to get feedback on changes and amendments.

What Ails the Cryptocurrency Market

In the recent past, China has intensified its crackdown on crypto, particularly Bitcoin. Following the Chinese government’s decision to launch a Central Bank Digital Currency (CBDC), the digital Yuan, Bitcoin was no more welcome. In fact, all Bitcoin-focused activities were banned.

Last month, the Chinese government denied rumors suggesting that they wanted to ban Bitcoin mining. However, the same authorities reviewed the same matter, but this time said that they wanted Bitcoin miners out ASAP.

The decision was informed by the thinking that Bitcoin and the digital Yuan would not thrive in a common environment. Government authorities believed that when put in the same ecosystem, Bitcoin would outshine the digital Yuan and possibly hinder its growth.

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Patrick is an accounting & economics graduate, a Cryptocurrency enthusiast, and a Blockchain technology fanatic. When not crafting informative pieces on any of the above subjects, he will be researching on how the Blockchain technology can transform the world, particularly the financial space.



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