Crypto News Headlines (04-Jul-2022)

Singapore-based crypto lender Vauld has suspended all withdrawals, trading and deposits on its platform as it looks at restructuring options.

Vauld has seen withdrawals of around $198 million since June 12, the day when the downturn in crypto markets began to come to a head with crypto lender Celsius pausing withdrawals on its platform the following day.

The firm is exploring potential restructuring options as a means of navigating the challenges it faces, it said in a blog post on Monday.

Last month, Vauld announced it would be laying off 30% of its staff, with most of the team being located in India.

Vauld has enlisted Kroll for financial advisory services. It also hired Cyril Amarchand Mangaldas and Rajah & Tann Singapore LLP as legal advisors in India and Singapore respectively.

The lender raised $25 million in Series A funding last year to expand its retail crypto banking platform and drive international expansion. Peter Thiel-founded Valar Ventures, Pantera Capital and Coinbase Ventures are among its investors.

The monetary authority in Moscow is now ready to back the legalization of crypto mining under the condition that Russian miners are obliged to sell the coins they obtain in the process outside the country. That’s according to a recent statement by Kirill Pronin, head of Bank of Russia’s Financial Technologies Department.

The central bank has been the hardline voice in the ongoing discussions on the future of cryptocurrencies in Russia, proposing a blanket ban on most related activities earlier this year, including mining. However, facing opposition from other government institutions and having to deal with financial restrictions imposed over the war in Ukraine, its position has started to change.

Governor Elvira Nabiullina indicated last month that crypto payments can be permitted if they don’t “penetrate” the Russian financial system. At the same time, she insisted that digital currencies like bitcoin should not be traded on Russian platforms because these assets are too volatile and risky for potential investors.

Bitcoin has been struggling for three weeks to stay above $20,000, and this week was no exception—the world’s favorite cryptocurrency, as of this writing, was hovering just above $19,000. Many Bitcoin maximalists didn’t appear too concerned. And others have been buying the dip.

Microstrategy CEO and whale-sized Bitcoin HODLer Michael Saylor announced another large BTC purchase, although that didn’t seem to impress pro-gold economist Peter Schiff.

El Salvador’s authoritarian president, Nayib Bukele, also bought more BTC, which should be no surprise to regular column readers.

But Saylor and Bukele, in a bit of a twist, weren’t the center of attention during the week. Venture capitalist Nic Carter, himself a Bitcoin fan, stoked the wrath of the laser-eyed masses with one simple tweet on Tuesday, announcing his decision to invest in an Ethereum- and Solana-friendly wallet-based authentication tool called Dynamic.

Venture capital firms are still pouring funding into crypto and Web3 projects, and the rate at which they are doing so has increased from the same time last year, despite the market.

According to the Wu Blockchain monthly VC funding report, the total amount venture firms invested in Web3 startups in June was $3.67 billion.

The figure has fallen by 18% from the $4.45 billion invested in May, but surprisingly it is up 60% from June 2021’s $2.3 billion.

The research, citing Dove Metrics, reported that there were 191 open investment projects for crypto venture firms last month. This has fallen 15% from the 225 open rounds in May, but is up 42% from June 2021’s figure of 134 investment rounds.

Prominent economist Peter Schiff, who is well-known in the community for his anti-crypto sentiments, had his bank shut down by Puerto Rico regulators. The revelation, however, led to Crypto Twitter pointing out the “irony” as Schiff’s prediction for Bitcoin (BTC) came true for his own traditional bank.

Puerto Rico regulators closed down Schiff’s bank for not maintaining the net minimum capital requirements, which further impacted the customers as they lost access to their accounts following a subsequent freeze.

While acknowledging that “customers may lose money,” Schiff stated that he was unaware of the regulatory minimums and was not presented with any form of legal notice prior to the abrupt closure. He added:

“It costs a fortune to run a small bank. That’s why I never really made any money. The compliance costs are outrageous.”

Hong Kong-listed software firm Meitu (1357) likely lost RMB 274.9 million to RMB 349.9 million ($41.1 million to $52.3 million) in the first half of 2022, mostly due to a fall in the value of its crypto holdings.

The firm’s losses almost doubled, a 99.6% to 154.1% increase, compared to the same period last year, it said in a filing with the Hong Kong Stock Exchange on July 1.

The Cayman-islands incorporated firm Meitu is known in China for its synonymous AI-powered face beautification app.

The price of major cryptocurrencies has fallen dramatically in the past month, bitcoin (BTC) lost almost 38% in June, its second-biggest monthly loss since its launch in 2009.

Meitu bought 940.89 BTC and 31,000 ether (ETH) in the spring of 2021, but has not made any moves to sell or buy crypto since then, according to the filing.

Over the weekend, the Chief Executive Officer of KuCoin Exchange Johnny Lyu allayed all Fears, Uncertainties, and Doubts (FUD) related to rumours spreading on Twitter as the trading platform may halt withdrawals due to the distress by the ongoing market meltdown in market.

Talking to Twitter, Lyu said there is absolutely no plan to halt withdrawals and that, unlike the claims that the firm is having liquidity issues, it has no exposure to crypto projects and companies that are struggling at the moment including LUNA, and Three Arrows Capital (3AC) amongst others.

“Be aware of FUDs! Not sure who’s spreading these sheer rumours, and what their intentions are, but #KuCoin does not have any exposure to LUNA, 3AC, Babel, etc. No “immense suffer” from any “coin collapse”, no plan to halt withdrawal, everything on KuCoin is operating well,” Lyu said in his short Twitter thread.

The Reserve Bank of India (RBI) released the 25th issue of its Financial Stability Report (FSR) Thursday. RBI Governor Shaktikanta Das wrote:

Cryptocurrencies are a clear danger. Anything that derives value based on make believe, without any underlying, is just speculation under a sophisticated name.

The RBI chief further opined: “While technology has supported the reach of the financial sector and its benefits must be fully harnessed, its potential to disrupt financial stability has to be guarded against.”

The Indian central bank’s report explores financial stability risks posed by crypto assets, citing various studies, including the work by the Financial Stability Board (FSB). The report states:

The risks from cryptoassets to financial stability appear to be currently limited as the overall size is small (0.4 per cent of global financial assets).

Coinbase wants to expand in Europe, with CEO Brian Armstrong meeting policymakers in London and Dublin this week despite a market downturn and recent layoffs.

The biggest U.S. cryptocurrency exchange, according to a company blog post, seeks to be “driving a concerted effort to strengthen our presence in Europe.”

Just last month, Coinbase announced it would cut its workforce by 18%—1,100 employees—in preparation an “extended” crypto winter.

The company also was criticized after it rescinded numerous job offers it promised would not be rescinded. (Coinbase later set up a database to help those would-be employees find other employment.)

“During market downturns, the temptation can be to shy away from international expansion,” said the Friday blog post. “We first entered the UK and EU during the bear market in 2015, a move that paid off significantly during the bull run a few years from then. We’ll keep building around the world, and doing everything we can to grow the cryptoeconomy.”

The British Army’s official Twitter, Facebook and YouTube accounts were breached on Sunday for almost four hours, with scammers promoting rip-off nonfungible token (NFT) collections and cryptocurrency scams.

Just after 2:00 pm EST on Sunday, the United Kingdom Ministry of Defence (MOD) Press Office tweeted it was aware the Army’s social media accounts were compromised and had begun an investigation.

Nearly four hours later, close to 5:45 pm EST, the Office provided an update that the account breaches were resolved. The British Army’s official Twitter account also apologized for the posts, saying it would conduct an investigation and “learn from this incident.”

Screenshots of the British Army’s official Twitter account posted by users show the hackers promoting at least two fraudulent derivatives of The Possessed and BAPESCLAN NFT collections.