Coin360 Daily Dispatch | Crypto Market Updates & Highlights | August 1, 2023

Crypto Market Update

Written by Van

Table of Contents:

DeFi Exploits and Market Impact

• Curve Finance Exploit Triggers CRV Price Drop
• SushiSwap Integrates with Core Blockchain Protocol
• Potential Ties Between BALD Memecoin and Alameda Research
• Tether Blacklists Wallet After $20 Million Phishing Attack

Regulatory Updates and Tax Implications

• IRS Declares Crypto Staking Earnings as Taxable Income
• Judge's Rejection of TerraForm Labs' Defense Causes Crypto Uncertainty

Crypto Exchanges and Platforms

• Nomura Receives License for Crypto Services in Dubai
• FTX Creditors Criticize Draft Reorganization Plan
• Binance Reenters Japanese Market with 34 Coin Offerings

Market Trends and Price Movements

• Bitcoin Price Slumps, Leading to $100 Million in Liquidations
• ApeCoin Team Claims 4.6 Million Tokens from Treasury
• Litecoin Investors Accumulate Coins Ahead of Halving Event

Crypto Projects and Developments

• Shiba Inu Adds New Languages to Blog on Third Anniversary
• ConsenSys Releases "Diligence Fuzzing" Tool for Smart Contract Testing

Market Losses and Recovery Efforts

• Crypto Market Suffers $486 Million Losses in July 2023

NFT Market Developments

• Ethereum NFT Trading Volume Hits Two-Year Low
• Kraken Announces NFT Display on Williams Racing F1 Cars

Metaverse Expansion

• Yuga Labs Acquires Roar Studios for Metaverse Expansion

Curve Finance Exploit Triggers CRV Price Drop

Following the Curve Finance exploit, the CRV token's price dropped, endangering founder Michael Egorov's large loan. To mitigate liquidation risks, Egorov sold $40 million in CRV tokens to various parties, including Tron's Justin Sun. The exploit caused a $3.55 billion dip in Ethereum DeFi's total value locked (TVL), prompting DeFi protocols to bolster defenses and insurance-like services to prepare for new claims.

SushiSwap Integrates with Core Blockchain Protocol

SushiSwap is integrating with the Core blockchain protocol, enabling cross-chain functionality and providing access to liquidity pools and decentralized exchange (DEX) aggregator. This integration will benefit developers within the Core ecosystem and improve the functionality of other DeFi protocols. Core's unique consensus mechanism combines proof-of-work (PoW) and proof-of-stake (PoS) to offer privacy, scalability, and security. 

Potential Ties Between BALD Memecoin and Alameda Research

The developer of Bald memecoin, which experienced a significant price drop, has potential ties to Alameda Research, according to Wintermute's head of research Igor Igamberdiev. He found that the Bald deployer and an older wallet connected to Alameda shared the same FTX deposit address. While this does not prove that Alameda deployed the token, there is a strong connection between its developer and the research arm. Another wallet linked to the first one also exhibited behavior typical of FTX.

Tether Blacklists Wallet After $20 Million Phishing Attack

A scammer used a zero transfer phishing attack to steal $20 million in Tether (USDT), but the stablecoin's issuer quickly blacklisted the scammer. The attack involved redirecting the victim's transfer to a phishing address that resembled the intended one. The victim mistakenly sent the funds to the scammer's address. Tether froze the wallet and took immediate action.

IRS Declares Crypto Staking Earnings as Taxable Income

The US Internal Revenue Service (IRS) has issued tax guidance stating that earnings from crypto staking are taxable income. Crypto investors must report rewards earned from staking digital assets as gross income in the year it was received. However, the ruling did not clarify tax filings for those staking on multiple networks. The IRS has been increasing its scrutiny of the crypto asset class and recently targeted certain staking services provided by crypto exchanges.

Judge's Rejection of TerraForm Labs' Defense Causes Crypto Uncertainty

Federal Judge Jed Rakoff's rejection of TerraForm Labs' attempt to use a previous ruling in the Ripple case has caused uncertainty in the cryptocurrency community. Ripple's Chief Legal Officer clarifies that the ruling doesn't change XRP's non-security classification. TerraForm Labs can subpoena FTX entities in their defense against fraud allegations by the SEC. They claim their stablecoin and governance token failures were due to a coordinated short-selling attack. 

Nomura Receives License for Crypto Services in Dubai

Nomura has obtained a license from Dubai's Virtual Asset Regulatory Authority (VARA) to launch virtual asset and brokerage services in Dubai. The move comes amid rising interest in digital assets among institutional and retail investors globally. Nomura's crypto arm, Laser Digital, will now provide virtual asset broker-dealer services and investment services in the Middle East. The license will also allow users to access over-the-counter crypto trading and other investment products. Dubai is becoming an increasingly crypto-friendly country, and several other exchanges are in the process of obtaining licenses in the city.

FTX Creditors Criticize Draft Reorganization Plan

Creditors of FTX have criticized a draft reorganization plan released by the company's caretaker leadership, stating that there have been no formal discussions or engagement with them. The disagreement may prolong the bankruptcy process through litigation. The creditors have called for control of the post-reorganization company to be given to "qualified parties" selected by them. They also criticized the high professional fees already spent in the bankruptcy process and demanded more input on future plans or they may pursue legal action.

Binance Reenters Japanese Market with 34 Coin Offerings

Binance launches Binance Japan offering 34 coins, including BNB, making it the largest exchange in Japan by token offerings. It will initially offer spot trading services, yield generation through Binance Earn and access to the exchange’s non-fungible token marketplace. This marks Binance's reentry into Japan after two years.

Bitcoin Price Slumps, Leading to $100 Million in Liquidations

Bitcoin price slumps to a 6-week low, resulting in about $100 million in liquidations. Altcoins such as Solana, Optimism, and Stellar also decline. US stock futures retreat as companies report disappointing Q2 earnings. BTC's drop leads to $92 million in derivatives liquidations. The crypto market decreases by 1.4% to $1.17 trillion. 

K33 Research suggests that Bitcoin's volatility has decreased compared to traditional assets, indicating potential for increased volume in the future. However, catalysts such as SEC responses to ETF filings and events like Curve Finance's liquidation risk may lead to greater price swings. K33 remains bullish on crypto for 2024. 

ApeCoin Team Claims 4.6 Million Tokens from Treasury

The ApeCoin team recently claimed 4.6 million APE tokens from the treasury allocation, equivalent to $8.14 million. This will increase the circulating supply and potentially impact the market dynamics of APE. The token has experienced a significant decline since February 2022, with a current price of $1.79, down 71% from its yearly high. APE is a utility and governance token aimed at supporting Web3 developments and metaverse technologies. 

Litecoin Investors Accumulate Coins Ahead of Halving Event

Litecoin investors, including dolphin and shark wallets, have been accumulating over 200,000 coins in preparation for the upcoming halving event. This accumulation is driven by the expectation that the halving will be bullish for Litecoin's price. However, the days leading up to the event have not seen significant price increases, suggesting that the halving may already be priced in. At the time of writing, Litecoin is trading at $93.

Shiba Inu Adds New Languages to Blog on Third Anniversary

Shiba Inu celebrated its third anniversary by adding new languages to its official blog, fostering inclusivity among its global followers. In July, the SHIB community burned over 2 billion meme coins, with recent burns totaling 50 million SHIB. Whales also withdrew 3.3 trillion SHIB to cold wallets ahead of the upcoming launch of the Layer 2 platform Shibarium. The prices of SHIB and BONE are expected to surge once Shibarium is launched. The remaining BONE supply will be minted, and the contract will be shut down to prevent further minting. 

ConsenSys Releases "Diligence Fuzzing" Tool for Smart Contract Testing

ConsenSys has released its "Diligence Fuzzing" tool for smart contract testing, allowing developers to find vulnerabilities before contracts are launched. The tool, integrated with smart contract toolkit Foundry, produces random and invalid data points to test contract security. The release comes after over $2.8 billion was lost in decentralized finance hacks in 2022. Diligence Fuzzing is not a "silver bullet" but can help developers write more secure contracts. 

Crypto Market Suffers $486 Million Losses in July 2023

In July 2023, the cryptocurrency market suffered losses of $486 million, which is more than six times the losses from the previous year. The majority of the losses occurred on the Ethereum network, with $447 million lost across 36 cases, including the Multichain hack ($231 million) and the Alphapo exploit ($100 million). Access control issues accounted for the largest portion of the funds lost. Recovery efforts were deemed inadequate, with only $6.15 million recovered out of the total losses. However, there were no reports of exit scams during the month. 

Top Altcoin Gainers and Losers

Gainers:

Trust Wallet Token TWT (+5.49%)

Maker MKR (+4.53%)

Frax Share FXS (+4.46%)

Losers:

FLEX FLEX (-7.11%)

Aave AAVE (-6.71%)

GMX GMX (-5.70%)

NFT Market Map

Ethereum NFT Trading Volume Hits Two-Year Low

Over the weekend, NFT trading volume on the Ethereum blockchain hit a two-year low, with about 11,900 ETH (worth $22.1 million) traded. This marks the lowest volume since July 2021. Overall, NFT trading volume has been on a downtrend, dropping 35% quarter over quarter. NFT lending saw a significant increase, while OpenSea's volume share decreased. The market goes through bear and bull cycles, with preparations being made for the next wave of adoption.  

Kraken Announces NFT Display on Williams Racing F1 Cars

Crypto exchange Kraken has announced a promotional sweepstakes that will allow winners to choose an NFT (non-fungible token) to be displayed on Williams Racing Formula 1 racecars competing in the upcoming U.S. Grand Prix. The move is part of Kraken's strategy to boost customer engagement and expand its user base. Other crypto companies, such as FTX and Mysten Labs, have previously partnered with F1 teams. Kraken hopes that these promotional efforts will help attract new customers in the U.S. and capitalize on recent trading volume gains.

Yuga Labs Acquires Roar Studios for Metaverse Expansion

Web3 company Yuga Labs has acquired Roar Studios to expand its Otherside metaverse, with Roar's team contributing their expertise to help speed up development. Yuga Labs aims to create a digital space for its intellectual property to converge and has been teasing updates to Otherside through live demos.

This article has been refined and enhanced by ChatGPT.