Coin360 Daily Dispatch | Crypto Market Updates & Highlights | September 11, 2023

Crypto Market Update

Written by Van

Table of Contents

Market Dynamics

• FTX's Bankruptcy and Asset Liquidation Plan
• Vitalik Buterin's X Account Compromised
• Cardano's ADA Hits Yearly Low
• Ripple's Big XRP Transfers to Bitstamp

Security and Risks

• Bitcoin User's Exorbitant Transaction Fee
• Lido Finance Addresses Security Flaw
• LayerZero Sued by FTX Estate
• Thai Crypto Scam Crackdown

Legal and Regulatory Updates

• Grayscale Trust's Discount and Legal Win
• Binance's Legal Deadline with the SEC
• Celsius' New Leadership and Future
• France's Influencer Certification
• G20 Summit's Crypto Regulatory Agenda

Exchanges and Platforms

• Sushi Expands to Aptos Blockchain
• Coinbase Cloud Enables Low-ETH Staking
• Coinbase's Service Warning in India
• Seamless Protocol's On-Chain Borrowing
• BlackRock's Non-Acquisition of Voyager

Investment Trends

• Ethereum's Fee Drop and Inflation
• Ether Sees Investor Outflows
• Whale's Risky PERP Trade
• ApeCoin's All-Time Low

FTX's Bankruptcy and Asset Liquidation Plan

The bankrupt former crypto exchange FTX held $3.4 billion in digital assets as of August 31, including over $1.1 billion in Solana. The court will be asked for permission to sell these assets to protect from volatility risks. The proposed plan is to gradually sell the assets, clearing the entire $3.4 billion within seven months. 

Creditors will receive just under 50% in dollar amounts, and the process may put pressure on crypto prices. The bearish sentiment came from the fear and investors waiting for the US Fed's September decision and August's CPI data. The crypto price of BTC has plummeted to around $25,000, while the Ethereum market cap took a hit as ETH tanked below $1,600.

Vitalik Buterin's X Account Compromised

On September 9, Ethereum co-founder Vitalik Buterin's account on X (formerly Twitter) was hacked, leading to the theft of approximately $691,000 worth of crypto and NFTs. The hacker used a phishing post to lure victims into interacting with a fake NFT mint. A CryptoPunk NFT worth $250,000 was among the stolen assets. There is speculation that an insider or paid-off employee may have been involved in the hack.  

Cardano's ADA Hits Yearly Low

Crypto coin prices are feeling the heat, especially with Cardano's ADA nearing its lowest point in a year due to a decline in decentralized finance activity on the blockchain network. This coincides with a decrease in transaction volume, daily users, and the total value of assets locked on the network. ADA also faced challenges after being classified as a security by the SEC.  

Ripple's Big XRP Transfers to Bitstamp

Cryptocurrency charts are buzzing as Whale Alert reported significant XRP transfers, including a hefty one from Ripple Labs to Bitstamp. Ripple has recently sold around 120 million XRP to Bitstamp in several transactions. Another transfer of over 420 million XRP was made from Bitvavo to an anonymous wallet.

Bitcoin User's Exorbitant Transaction Fee

In a bizarre twist on crypto price dynamics, a Bitcoin user shelled out a staggering $500,000 in transaction fees for a mere $200 transfer. The transaction appears to have come from an exchange or payment processor with buggy software, and the entity that made the transaction still holds over $10 million in the wallet. The transaction activity suggests that it may be the result of automated software created by a new entity in the crypto space.

Lido Finance Addresses Security Flaw

Ethereum staking protocol Lido Finance reassures that Lido DAO (LDO) and staked-Ether (stETH) tokens are safe despite a known security flaw in LDO's token contract. The flaw allows for "fake deposit" attacks, but Lido argues it is present in all ERC-20 tokens. Lido plans to update the LDO token integration guides to address the issue.  

LayerZero Sued by FTX Estate

LayerZero Labs is being sued by the FTX estate in an attempt to recover $21M as it wants to reverse deals made between the two companies before FTX's collapse. LayerZero's CEO, Bryan Pellegrino, responded by stating that the lawsuit is filled with unsubstantiated claims and accused FTX of prolonging the process for more legal fees. 

The lawsuit focuses on a deal between Alameda Research and LayerZero, claiming that the deals constitute fraud and should be reversed. FTX has filed a series of lawsuits to recover cash spent under former CEO Sam Bankman-Fried.

Thai Crypto Scam Crackdown

Thai authorities have arrested five individuals involved in a cryptocurrency scam that defrauded over 3,200 local investors of more than $27 million. The suspects, four from China and one from Laos, were charged with transnational crime, fraud, and money laundering. Thailand's Securities and Exchange Commission has introduced measures to enhance investor protection in response to such scams.  

Grayscale Trust's Discount and Legal Win

Grayscale's Bitcoin investment vehicle, Grayscale Bitcoin Trust (GBTC), is now trading at a 17.17% discount to BTC/USD. The trust has been performing better since news broke that BlackRock plans to file an application for the US's first Bitcoin spot price-based ETF. 

Despite the SEC delaying a decision on spot ETF applications, Grayscale recently won a legal battle with the SEC and has seen improved price performance as a result. However, BTC price continues to decline, with September historically being a weak month.

Binance's Legal Deadline with the SEC

Binance has until today to respond to the SEC's motion to file sealed documents and the opposition to its protective order request. The outcome of the legal battle could have significant implications for the crypto community. If the protective order is denied and sealed documents are granted, a lot of information about the case could become public. The protective order was filed by Binance last month to halt the SEC's requests for information.

Celsius' New Leadership and Future

Former Algorand CEO Steve Kokinos has been appointed as the prospective CEO of the new company set to succeed crypto lender Celsius. The new board of directors also includes executives from WeWork, Credit Suisse, and UBS, with two members from Celsius' creditor committee. 

The consortium that acquired Celsius' assets in May plans to take over its institutional loan portfolio, staked crypto, and bitcoin mining unit. Celsius filed for bankruptcy protection last year and has faced scrutiny from regulators.

France's Influencer Certification

France has introduced a non-obligatory Responsible Influence Certificate for financial influencers, including those promoting crypto assets. This certificate, which requires a minimum 75% correct answers on a multiple-choice test, aims to regulate and train influencers in the financial sector. It does not hold legal status but can be withdrawn from non-complying influencers. 

The country has also amended laws to allow registered cryptocurrency companies to hire influencers for advertising. In contrast, the UK has warned influencers of potential jail time and fines for promoting crypto, while the European Consumer Organisation advocates a total ban on such advertising. 

G20 Summit's Crypto Regulatory Agenda

The G20 summit in India aims to develop a coordinated framework for global crypto regulation. As per Noelle Acheson, the former head of research at CoinDesk and Genesis Trading, while some see this as a significant step towards acknowledging the global nature and permanence of crypto assets, there are underlying fractures and shifting allegiances among member nations. 

The G20's pronouncements are not binding, and its membership list has not been updated since 2008, raising questions about its representativeness. Additionally, the upcoming change in G20 presidency to Brazil, a more supportive jurisdiction for crypto, may shift the focus and impact of the group's discussions.  

Sushi Expands to Aptos Blockchain

Decentralized exchange Sushi has expanded its services to blockchain Aptos, marking its first move to a blockchain not compatible with Ethereum. Sushi has $350 million locked on its platform, while Aptos has just $45 million. This move could help Sushi attract fresh capital and compete with other non-Ethereum chains. Aptos, built by former Meta employees, has its native APT token with a market cap of over $1 billion, but it has struggled to attract DeFi TVL.

Coinbase Cloud Enables Low-ETH Staking

Coinbase Cloud has integrated Kiln's on-chain staking protocol to allow native ETH staking below the 32 ETH limit. This integration will enable Coinbase Wallet users to stake smaller amounts of ETH directly from their wallets, making staking more accessible. 

Kiln offers a flexible approach to staking by allowing users to pool their stakes to reach the 32 ETH minimum. Coinbase Wallet will be the first to implement this staking solution, with plans to extend it to other wallets and services.

Coinbase's Service Warning in India

Coinbase has informed some Indian users that its services may be suspended, leading to concerns about a potential shutdown in India. However, the exchange clarified that the warning only applies to Indian users residing abroad who no longer meet its criteria. Coinbase's services are not currently offered in India. 

The company requires users to comply with know-your-customer (KYC) and anti-money laundering (AML) laws. Indian authorities have recently made AML measures applicable to cryptocurrency companies in the country.

Seamless Protocol's On-Chain Borrowing

The Seamless Protocol, developed by a collaboration of DeFi developers, allows for undercollateralized borrowing on-chain. The protocol, a fork of Aave v3 deployed on Base, enables smart contracts with predetermined borrowing strategies to connect liquidity pools and borrowing strategies automatically. This solution eliminates the need for off-chain negotiations and provides full transparency for liquidity suppliers.

BlackRock's Non-Acquisition of Voyager

BlackRock has not acquired Voyager Digital, a distressed crypto lender, despite erroneous media reports. The false news caused the value of VGX to temporarily inflate before sharply depreciating. The incident highlights the tactics used by manipulators in the crypto market. BlackRock has been expanding its presence in the crypto market and has recently applied for a spot Bitcoin ETF and suggested an optimal allocation in leading cryptocurrencies.

Ethereum's Fee Drop and Inflation

Ethereum transaction fees have dropped to lows not seen since November 2022 due to a decrease in on-chain activity from NFT sales, meme coin trading, and Telegram bots. The average fee for transfers on Ethereum is now $1.83, while the cost of token exchange via Uniswap is approximately $4.17. 

Ethereum has turned inflationary as demand for gas decreases. Ethereum's supply has remained flat since September as on-chain activity has cooled. NFT sales volume and the number of buyers and sellers have also dropped significantly.

Ether Sees Investor Outflows

Ether investment products saw outflows of $4.8 million last week, bringing year-to-date outflows to $108 million, making it the "least loved digital asset among ETP investors this year." Overall, digital asset investment products saw outflows of $59.3 million last week, with bitcoin investment products being hit the hardest. 

Short bitcoin funds, however, saw inflows of $15.2 million, the highest single week of inflows since March. The negative sentiment is believed to be driven by worries over regulation and the strength of the US dollar.

Whale's Risky PERP Trade

A whale withdrew 4700 ETH ($7.66M) from Bithumb, converted it to WETH, and purchased 6.8M PERP ($7.06M). Two days later, the PERP was sold at a 29% loss. PERP experienced significant volatility, surging 185% before losing 50% of its value in three days.  

Top Altcoin Gainers and Losers

Gainers:

Trust Wallet Token TWT (+0.96%)

Optimism OP (+0.77%)

PAX Gold PAXG (+0.51%)

Losers:

Rollbit Coin RLB (-16.94%)

eCash XEC (-9.01%)

Arbitrum ARB (-8.29%)

NFT Market Map

ApeCoin's All-Time Low

ApeCoin, the Ethereum-based token associated with the Bored Ape Yacht Club NFT collection, has fallen to a new all-time low. The token is currently trading at $1.16, down 7% in the past day and over 42% in the past month. ApeCoin's decline has been more significant than the drop in the floor price of Bored Ape NFTs. The token's initial rise was driven by enthusiasm for the Otherside metaverse game, which plans to use ApeCoin as its native currency.

This article has been refined and enhanced by ChatGPT.