Crypto News Headlines (12-May-2022)

BVNK, a banking and payments platform targeting businesses seeking crypto integration, has raised $40 million in Series A funding.

The round was led by Tiger Global and also featured digital asset custodian Anchorage Digital, token sale platform Coinlist and open banking startup TrueLayer.

BVNK launched last October with the aim of appealing to businesses looking to offer crypto services not currently served well by existing payment and settlement providers.

The London-based firm will use the funds to accelerate its push for regulatory licenses and expand into new markets, such as the U.S.

BVNK currently process $2 billion in annualized payments which it aims to grow to serve cross-border businesses with fast payments and banking in crypto and fiat, hoping to address the fees and slow processing times of legacy infrastructure that could be a barrier to adoption by businesses.

Its API-based platform enables merchants and other businesses to integrate crypto payments into their operations. Enabling businesses to accept payments in cryptocurrency but receive settlements in fiat could prove a boon for institutional and corporate adoption of crypto, which may be currently impeded by the challenges of converting it into fiat, on-ramping customers or managing payouts.

Candidates for government offices in Russia are now expected to provide authorities with details about the crypto funds they have acquired in other jurisdictions. A decree recently signed by Vladimir Putin adds the requirement to an earlier presidential decree on the verification of filed statements on property and property-related liabilities of Russian officials abroad.

The amendments, which entered into force immediately after the signing of the new decree on May 9, concern not only those who run in elections on the federal and regional level but also their close relatives. From now on, their families will have to account for all of their crypto investments as well.

The new provisions refer to any spending for the purchase of digital financial assets, a term encompassing cryptocurrencies under current Russian law, and digital currency. The latter definition will be introduced with a new law drafted by the Ministry of Finance.

The respective Russian authorities will verify the submitted information. To do that, they will demand documents indicating the value of the purchased crypto assets. Affected Russian citizens and their relatives will have to also share the details of each transaction, including the date and other identifiers.

Charles Hoskinson wants you to “wake up.”

In a Twitter broadcast on Tuesday night, the Cardano founder and Ethereum co-founder warned of a “dystopian future” brought on by hyperinflation and governments just printing money.

“The world economy,” Hoskinson warned, “is not healthy.”

And the ongoing crypto crash—where total market cap has plummeted 10% in the past 24 hours, according to CoinMarketCap—has shined a light on the divide between institutional investors and retail investors, the latter of whom, in Hoskinson’s view, are using crypto to try to opt out “of a global system that’s unfair.”

“Institutions have been dumping their crypto … most are looking at it as a high-risk, high-return asset,” Hoskinson said. “This was always the danger of inviting the Wall Street types in.”

Following the Coinbase report where the company declared its losses, a disclosure that suggests that users are not protected in the case of bankruptcy has been gaining traction on social media. However, Coinbase CEO Brian Armstrong explained that funds are safe “as they’ve always been.”

In the company’s first-quarter report for 2022, Coinbase reported its first loss amounting to $430 million. Apart from this, the firm also reported the number of users transacting in the exchange has also dropped from 11.4 million to 9.2 million.

After the loss was posted, concerns over bankruptcy protection were brought up on Twitter, quoting lines from the disclosure that said, “In the event of a bankruptcy, the crypto assets we hold on behalf of our customers may be subject to bankruptcy proceedings.”

Additionally, the disclosure mentioned that the users will be treated as “unsecured creditors” when this happens. This led to speculation that if Coinbase went bankrupt, the coins that they hold will be company property.

The German Ministry of Finance has made certain amendments to its cryptocurrency policies. The authorities disclosed that the sale of acquired bitcoin and ether won’t be taxed if individuals hold the assets for more than one year.

Germany’s Ministry of Finance published a letter focused on the income tax treatment of digital assets, such as bitcoin (BTC) and ether (ETH).

After collaborating with the highest tax authorities of the federal states, the lawmakers decided to make the sale of BTC and ETH tax-free if those assets were held for over 12 months. The policy will apply even if the cryptocurrencies have been employed for staking/lending.

“For private individuals, the sale of purchased Bitcoin and Ether is tax-free after one year.”

Previously, digital assets used in such activities had to be held for ten years to be exempt from taxation.

The Ministry outlined that this is the first time when the subject has been addressed with a nationwide uniform administrative instruction.

The officials vowed to keep dealing with the digital asset taxation policy and eliminate any arising issues. To do so, they will work in close coordination with federal tax authorities and government institutions.

The broad plunge in the crypto complex, driven by the collapse of the TerraUSD stablecoin, hit major tokens hard. Bitcoin plunged by as much as 10% in the last day to its lowest level since Dec. 2020, while Ethereum dropped as much as 16%.

What Are Stablecoins? Why Did TerraUSD Go So Wobbly?: QuickTake

The carnage showed signs of spreading further Thursday as crypto-related stocks in Asia also cratered. Hong Kong-listed fintech firm BC Technology Group Ltd. closed down 6.7%. Japan’s Monex Group Inc. — which owns the TradeStation and Coincheck marketplaces — ended the day down 10%.

As central banks across the world move to aggressively tighten monetary policy to fight inflation, digital tokens have faced selling pressure amid a broader flight from risk assets. S&P 500 futures lost 0.8% Thursday, tracking losses in the benchmark MSCI Asia Pacific Index.

Investors in the crypto space are no stranger to wild swings in the market, however, and Bitcoin and Ethereum pared losses quickly to trade down 4.2% and 9%, respectively, as of 4:45 p.m. Hong Kong time.

Crypto hedge fund Arca is one of many likely suffering considerable fallout from the sudden and dramatic collapse of the Terra blockchain’s LUNA-powered stablecoin, UST.

The firm, which manages $500 million in assets, told its limited partners in a note sent out Tuesday it believed Terra’s teetering UST stablecoin would eventually regain its peg and concluded the situation created a buying opportunity.

Arca said in the note it held an ad hoc investment and risk committee meeting to discuss the situation. On Monday night, UST had fallen to a low of 63 cents and LUNA was trading at $24.60; as of press time on Wednesday, UST was still languishing well below $1 at 63 cents and LUNA had tanked below $1.15, according to CoinGecko.

“After this analysis, we felt, and continue to feel, that UST will ultimately maintain its peg and a number of attractive opportunities had become available,” Arca CEO Rayne Steinberg wrote to investors on Tuesday. “For example, we were able to purchase UST at a significant discount to par in the DYF (Digital Yield Fund) and then deposit with FTX who were paying 100% APY (annual percentage yield) given the buyer/seller imbalance during peak fear.”

Liquidators of the South African bitcoin Ponzi scheme, Mirror Trading International (MTI), have issued summonses against eighteen individuals believed to be the masterminds behind the now-defunct scheme. The liquidators want the named individuals to pay back more than $291 million (4,666,077,528 rand) to cover the scheme’s debts, a report has said.

The move to summon the alleged MTI masterminds comes just a few months after liquidators unsuccessfully tried to have the online bitcoin trading platform declared an unlawful business by a South African court. As per a report by News, the move was frustrated by a slew of late court filings by lawyers representing MTI investors.

Investors were reportedly worried that the liquidators’ motion would give the latter excessive powers which may jeopardize their chances of recovering their funds. Following this intervention by investors, a South African judge subsequently postponed the hearing to a later date.

The price of Ethereum dropped by nearly 10% in 24 hours to put it under the $2,100 mark for the first time since July 2021. Nearly simultaneously, Bitcoin extended its losses by 7% to hit $28,170—its lowest point since December 2020, when it was in the midst of a massive New Year’s rally.

In what’s shaping up to be one of the cryptocurrency market’s worst weeks in history, Bitcoin and Ethereum have lost 28% and 30% of their value, respectively, in the past seven days.

Those aren’t anywhere near the worst declines.

Terra’s LUNA has lost 99% of its value in the past week as Terra’s UST stablecoin lost its peg, taking a recently top-10 asset and putting it behind EOS for market capitalization. ApeCoin aped into the bear market and lost two-thirds of its value. And last week’s Fantom value was a mere apparition; it’s down 65%. The list goes on.

Amid the collapsing Terra network’s cryptocurrencies Luna (LUNA) and TerraUSD (UST), crypto exchange Binance  continues deactivating related trading services.

Binance’s derivatives arm Binance Futures has delisted coin-margined LUNA perpetual contracts, the firm officially announced on Thursday.

“Users are advised to close any open positions prior to the delisting time to avoid automatic settlement,” the statement by the platform reads.

Binance Futures has also started conducting automatic settlements on the contracts, reducing the leverage tiers and updating margin tiers for coin-margined LUNA perpetual contracts.

As such, the 8x leverage tier is now the max leverage tier available on Binance for LUNA perpetual contracts, replacing the earlier maximum available leverage of 21-25x. 11-20x leverage is reduced to 7x, while 6-10x leverage is replaced with a 6x leverage tier, according to the updated data.

According to the announcement, existing positions opened before the update will not be affected.

“Binance reserves the right to further change the max leverage and margin tiers for USDT-margined LUNA perpetual contracts without further notice,” the firm added.