Coin360 Daily Dispatch | Crypto Market Updates & Highlights | October 12, 2023

Crypto Market Update

Table of Contents

Legal and Regulatory Updates

• SBF's Legal Troubles and Crypto Regulation
• Genesis Halts Withdrawals Amid Bankruptcy
• BarnBridge DAO Prepares for SEC Scrutiny
• Chinese Court Rejects Crypto Lending Case
• Circle Intervenes in SEC vs. Binance Lawsuit

Market Trends and Economic Indicators

• Global Markets React to U.S. CPI Data
• Ethereum Whales Unload Billions
• Dogecoin Transactions Hit Three-Month Low
• DeFi TVL Drops but Liquid Staking Grows

Stablecoins and Asset-Backed Tokens

• USDR Stablecoin Loses Its Peg
• BlackRock Fights Domain Squatters

Security and Exploits

• Stars Arena Recovers Stolen Funds
• Platypus Finance Suffers Second Hack
• Flash Loan Exploit on BNB Chain
• Lido Finance Faces Validator Penalties

Crypto Exchanges and Platforms

• WOO Network Cuts Ties with Three Arrows Capital
• Fortnite Subreddit Token Skyrockets
• CoinList Launches Staking Fund for U.S. Investors

Country-Specific Developments

• SSV Network Founder Drafted into Israeli Army
• Japanese Firms Plan Digital Currency Launch

New Products and Innovations

• Trezor Unveils New Crypto Wallets

NFTs and Gaming

• StrayShot Game Inks Deal with NBA's Ball Brothers

SBF's Legal Troubles and Crypto Regulation

Caroline Ellison's testimony alleges Sam Bankman-Fried (SBF) manipulated Bitcoin prices and misused FTX client funds, totaling $10 billion. She also claimed SBF aimed to crush rival Binance through regulatory action. Aditya Baradwaj disclosed a $190M loss at Alameda Research due to scams. 

Amidst SBF's trial, $120M in stolen FTX assets were converted to Bitcoin, with links to Russian criminal networks. These revelations highlight the need for stricter regulatory oversight in the crypto sector.

Genesis Halts Withdrawals Amid Bankruptcy

Cryptocurrency company Genesis has halted customer withdrawals in its lending unit after filing for bankruptcy following Gemini exchange's refusal to facilitate withdrawals. A $175m settlement between Genesis and FTX has been approved by a bankruptcy judge, addressing multiple claims made by FTX against Genesis. The ongoing trial of FTX founder Sam Bankman Fried adds further complexity to the situation, which will shape the future trajectory of the industry.

BarnBridge DAO Prepares for SEC Scrutiny

The decentralized protocol BarnBridge DAO has unanimously voted to comply with potential demands from the SEC, including the possibility of paying fines. Special delegates have been nominated to handle interactions with the regulator. 

The DAO's treasury is also authorized to sell tokens if needed. The SEC's investigation into BarnBridge has been ongoing since June 2023. The price of the BOND token has experienced a decline since its peak in July 2023.  

Chinese Court Rejects Crypto Lending Case

In a second landmark ruling, a Chinese court has invalidated a crypto lending agreement, stating that crypto lending falls outside the protection of the country's legal system. 

The court ruled that the plaintiff could not prove that Tether is a legally issued fiat currency, and therefore, the lawsuit was dismissed. This ruling follows a previous case where a $10 million Bitcoin lending agreement was invalidated for the same reason.  

Circle Intervenes in SEC vs. Binance Lawsuit

US District Judge Amy Berman Jackson cleared an amicus brief by Circle, the issuer of USD Coin, in the ongoing SEC vs. Binance lawsuit. The brief argues that stablecoins like USDC are not securities. 

The SEC filed a lawsuit against Binance in June, accusing the exchange of unregistered securities sales and operating illegally in the US. Binance and its CEO Zhao petitioned for dismissal, claiming that the SEC had overstepped its powers.  

Global Markets React to U.S. CPI Data

U.S. CPI for September outpaced forecasts, rising 0.4% and affecting Bitcoin, which dipped 1.2% to $26,770. Meanwhile, Asian and European stock markets surged due to economic growth indicators. Bitcoin's crypto price hovered around $26,600, with minimal chances of a Fed rate hike. The crypto market remains cautious, while traditional markets show bullish signs.

Ethereum Whales Unload Billions

The Ethereum market cap has been influenced as Ethereum whales sold over 5 million ETH worth $8.5 billion since February, impacting its price. Ethereum Foundation sold 1,700 ETH for $2.73 million. Ethereum's price has only risen 22% in the last 12 months, compared to Bitcoin's 42%. ETH futures ETFs had lower trading volume than BTC's.  

Dogecoin Transactions Hit Three-Month Low

Cryptocurrency charts reveal a slump in Dogecoin's daily transactions, hitting a 3-month low and affecting market sentiment, with a drop of 98.22% from June and 93.95% from July. The price of Dogecoin has also dropped, standing at $0.058 at press time. However, analysts speculate that there may be a significant increase in transfer activity soon.

DeFi TVL Drops but Liquid Staking Grows

Total value locked (TVL) in DeFi projects has dropped 30% YoY to $36.95 billion. However, liquid staking projects have seen strong growth, reaching $17.67 billion in TVL. Tron-based projects have also experienced a rise in TVL, with stUSDT contributing to the increase. DeFi projects have lost 2.5 million monthly users since May.   

USDR Stablecoin Loses Its Peg

Crypto coin prices took a hit when the USDR stablecoin, backed by real estate and issued by Tangible, lost its peg to the U.S. dollar, plummeting by nearly 50%. The depegging was triggered by a rush of redemptions that drained its liquid DAI reserves. 

Tangible plans to liquidate real-world assets and use insurance funds to improve liquidity. Critics argue the collapse may be a pre-planned "rugpull," while Tangible attributes it to redemptions and panic selling. The event has raised questions about the viability of stablecoins backed by real-world assets.

BlackRock Fights Domain Squatters

BlackRock has filed a legal complaint against owners of 44 domains allegedly imitating its name. The asset manager claims the domains were registered in bad faith to profit from consumer confusion and potentially engage in malicious activities. BlackRock seeks transfer of the domains, damages, and injunctions against further infringement.  

Stars Arena Recovers Stolen Funds

Web3 social media platform Stars Arena has recovered 90% of stolen funds, worth around $2.7 million, from an exploit. They agreed to keep a 10% bounty, valued at $257,000, in exchange for the return of the remaining funds. Stars Arena is finalizing an audit of their new smart contract before launching.  

Platypus Finance Suffers Second Hack

DeFi protocol Platypus Finance on Avalanche suffered a security hack resulting in an estimated loss of over $2 million. Liquidity pools have been temporarily halted in response to the incident, which appears to be a flash loan attack on the AVAX-sAVAX liquidity pool. This is the second hack for Platypus, following a similar attack in February 2023.

Flash Loan Exploit on BNB Chain

An attacker exploited a flash loan on the BH token on BNB Chain, turning $4.16 into $1.27 million through a Pancakeswap arbitrage trade. The attacker used the Tornado Cash Ethereum mixer to hide their funds. 

The vulnerability source is uncertain, but potential weaknesses include smart contract bugs, oracle manipulation, and liquidity pool distortions. Flash loan attacks involve borrowing assets without collateral and manipulating prices for profitable arbitrage trades.  

Lido Finance Faces Validator Penalties

Lido Finance, a liquid staking protocol, faces a penalty of at least 20 Ethereum (ETH) after 20 validators associated with one of its node operators were slashed from the Ethereum network. The initial loss to the protocol is around 20 ETH, with additional penalties for inactivity before exiting the network. 

Slashing is when validators are removed from a proof-of-stake network for failing to fulfill their responsibilities, with penalties deducted and burnt immediately. Lido Finance has built a reserve cover fund of approximately 6,200 ETH to help mitigate slashing impact.

WOO Network Cuts Ties with Three Arrows Capital

Crypto trading platform WOO Network will sever ties with bankrupt hedge fund Three Arrows Capital (3AC) by repurchasing all tokens and shares previously held by 3AC. The agreement includes the cancellation of 3AC's shares and an increase in ownership for other shareholders. WOO will send the repurchased tokens to a burn address.  

Fortnite Subreddit Token Skyrockets

The native token of the Fortnite subreddit, called Bricks (BRICK), surged over 80% in 24 hours, but has now corrected to trade 60% higher than before. Its trading volume on Kraken increased by 78% to nearly $650,000. Bricks is an Ethereum-based ERC-20 token used mainly within the subreddit community. The reason for the surge is unknown. 

CoinList Launches Staking Fund for U.S. Investors

CoinList is launching a fund for U.S. accredited investors to earn returns from staking various digital assets, including Ethereum and Near. The fund will also support other chains in the future, such as Flow, Sui, and Mina. This offers investors an opportunity to earn passive income from staking without owning the assets themselves.

SSV Network Founder Drafted into Israeli Army

Alon Muroch, the founder of SSV Network, has been drafted into the Israeli Army. Following this news, the native token of the SSV Network, SSV, fell 5% before recovering. The SSV Network aims to make staking more decentralized and accessible while enhancing security and reliability.

Japanese Firms Plan Digital Currency Launch

Several Japanese companies, including Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Financial Group, plan to launch a digital currency by July 2024 for clean energy certificate exchange. 

GMO Aozora Net Bank will introduce a digital currency called "DCJPY" for use by Internet Initiative Japan. The digital currency will be supported by blockchain technology and bank deposits. The Bank of Japan is also exploring the creation of a digital yen.  

Trezor Unveils New Crypto Wallets

Trezor, a crypto hardware wallet manufacturer, has released three new products aimed at encouraging self-custody of digital assets: the Trezor Safe 3 hardware wallet, a limited edition bitcoin-only version, and the Trezor Keep Metal for recovery seed backup. 

The wallets are priced at $79 and are designed to be user-friendly for newcomers to the crypto space. Trezor emphasizes the importance of self-custody and security in light of recent events in the industry. The new products are available for pre-order and shipping will begin in mid-November.

Top Altcoin Gainers and Losers

Gainers:

Frax Share FXS (+4.86%)

Gala GALA (+3.79%)

Cronos CRO (+3.60%)

Losers:

THORChain RUNE (-8.69%)

Optimism OP (-4.85%)

Radix XRD (-4.36%)

NFT Market Map

StrayShot Game Inks Deal with NBA's Ball Brothers

StrayShot, a battle royale shooter game developed by iBloxx Studios, has signed a deal with NBA players LaMelo and Lonzo Ball and the Big Baller Brand (BBB). The agreement will see the Ball brothers and their family represented as playable NFT characters in the game. 

StrayShot, currently in public beta, is expected to be fully released by December 2022 or February 2023. In addition to in-game characters, iBloxx plans to release licensed Ball NFTs outside of the game. The game will utilize the Ethereum scaling network SKALE for blockchain transactions and record game aspects on-chain.

This article has been refined and enhanced by ChatGPT.