Crypto News Headlines (15-Jul-2022)

Celsius Network, the liquidity-strapped crypto lender that suspended withdrawals has a $1.3 billion hole in its balance sheet, according to a new court filing from the company’s advisory partner, Kirkland & Ellis.

The document, which was filed to the U.S. Bankruptcy Court of the Southern District of New York, shows that Celsius holds $4.3 billion of assets and $5.5 billion of liabilities. In its list of assets, Celsius claimed it has about $600 million in its CEL token. However, the company noted in the filing the total market cap for CEL as of July 12 was roughly $170.3 million.

Celsius is one of several firms that have been hit hard by the ongoing liquidity crisis in the crypto sector. It halted deposit withdrawals on June 12, hired restructuring experts to advise on its financial situation and filed for bankruptcy protection on Wednesday.

As the firm was looking for solutions to its financial difficulties, crypto exchange FTX reportedly walked away from talks about a potential deal to acquire Celsius, pointing to a “$2 billion hole” on Celsius’s balance sheet.

However, Celsius started to make good on its debt to decentralized finance (DeFi) protocols Aave, Compound and Maker as part of a treasury-management maneuver to get a hold of its assets locked up as collateral of the loans.

The digital currency exchange Bitfinex has detailed that the company is donating 36 bitcoin (BTC) worth just over $734K using current BTC exchange rates and 600,000 tether (USDT) to small businesses and communities in the Central American country of El Salvador.

Bitfinex said in a blog post published on Thursday that the BTC donations will be sent to the “recipients’ bitcoin wallets, including the Chivo wallets.” The $1.33 million in crypto assets will first be directed at three communities to support “a variety of projects and initiatives,” Bitfinex disclosed.

The funds will first target small businesses in the communities of Ilopango, Soyapango, and Apopa. “Among the ventures supported by the donations are green business initiatives employing young men to reduce pollution in lake Ilopango and clean up litter in Apopa,” the blog post details.

Bitcoin became legal tender in El Salvador on September 7, 2021, and the country’s government immediately started purchasing BTC that day. On July 1, 2022, News reported that the country acquired 80 BTC when the leading crypto asset dropped below $19K per unit. The Salvadoran government purchased approximately 2,381 bitcoins since the legal tender law was codified last year.

Bitcoin and crypto mixers have seen an uptick in usage this year as cybercriminals and sanctioned entities seek avenues to hide their ill-gotten gains.

Cryptocurrency sent through mixing services has surged to its highest ever levels according to a July 14 report by blockchain analysis firm Chainalysis.

Mixers have got a bad reputation as they have become the method of choice for cybercriminals and rogue states to launder digital assets. Chainalysis reported that almost 10% of all funds sent from illicit crypto addresses are sent to mixers.

It added that the 30-day moving average of crypto sent to mixers reached an all-time high of $51.8 million in April. The amount sent to mixers in Q2, 2022 topped $600 million but the vast majority of it came from sanctioned entities and stolen funds.

It would be safe to deduce that the war in Ukraine and global sanctions imposed on Russia have had a large impact on mixer usage for the first half of this year.

“What stands out most is the huge volume of funds moving to mixers from addresses associated with sanctioned entities, especially in Q2 2022.”

Ethereum (ETH) gained 12.76% over the past 24 hours, soaring past $1,200. 

Ethereum’s bullish price movement can most likely be attributed to the successful testing of one of the last tests before the Merge by Ethereum core developers yesterday. The event itself is expected to happen in September.

The highly anticipated upgrade will transition Ethereum from a proof-of-work (PoW) blockchain network to a proof-of-stake (PoS) network. The upgrade is expected to improve the network’s scalability as well as reduce its carbon footprint. 

Alongside the successful trial of the latest test fork, activity across various Ethereum-based apps is also on the rise. 

The total value locked (TVL) across various DeFi apps has jumped 3.44%, hitting $76.74 billion, according to data from DeFi Llama. 

The leading apps include MakerDAO, Aave, Curve, and Ethereum staking platform Lido.

Germany and the United States shared the spoils in the latest quarterly global cryptocurrency rankings released by analytics firm Coincub.

The two countries now share the top rankings, with Germany making space for the rising U.S., having topped the first quarter rankings for 2022. Their dominance is due to progressive regulatory environments and major Bitcoin (BTC) investments by mainstream institutions.

Coincub’s rankings tally up points across nine overall categories, which focus on government, financial services, population, taxation, talent development and industry participants, trading, fraud and environmental potential. The current ranking system introduced new sub-categories like crypto education courses and initial coin offerings to create a more comprehensive gauge.

Germany’s move to allow its savings industry to utilize crypto investments and benefit from a zero-tax policy on capital gains of Bitcoin and Ether (ETH) held for more than a year was a key reason for its rise to the top of the rankings earlier this year.

Blockchain layer 1 network 5ire has raised $100 million in Series A funding from U.K.-based conglomerate Sram and Mram, it said Friday.

5ire, which is incorporated in Dubai, said in a press release it plans to use the funds to expand into Asia, North America and Europe while keeping India as the hub of operations and core area of focus.

The funding values 5ire at $1.5 billion, arguably making it both the world’s first blockchain unicorn with sustainability at its core and the fastest growing blockchain in India, it said. 5ire’s business model is to embed the for-benefit paradigm by highly incentivizing practices that align with the United Nations Sustainable Development Goals (SDG), CEO and co-founder Pratik Gauri said. The company calls the implementation Proof-of-Benefit.

Gauri added that 5ire will empower decentralized autonomous organizations (DAO) and working groups to help accelerate the implementation of the U.N.’s 17 SDG goals.

Sailesh Hiranandani, the founder and chairman of Sram & Mram, said 5ire’s blockchain is one that “governments and large corporations will use” in the near future, giving the example of Malaysia.

“The Far East is very proactive and keen on adopting blockchain, like Malaysian Immigration and The Health Card app,” Hiranandani said in an email. “We feel entry into the market with a layer 1 partner which is sustainable is ideal and 5ire being a sustainable blockchain is perfect for us. This will benefit our group to communicate on blocks as we deal with various countries and have offices in over 8 countries,” said Hiranandani.

The Ministry of Internal Affairs of the Russian Federation (MVD) and other security agencies are hoping to introduce criminal liability for citizens providing assistance to scammers that exploit the popularity of cryptocurrency investments.

Law enforcement officials say they have been registering a growing demand for the services of so-called “droppers” — people who are willing to help crypto fraudsters with laundering illegally obtained funds, Russian crypto news outlet reported.

A dropper is usually someone who was offered to accept illicit funds to their bank account or crypto wallet. The person can then buy cryptocurrency, split the amount between several wallets, or withdraw the money.

These individuals play a role in fraudulent schemes that allows organizers to cash out the stolen funds. Some droppers may not even realize they are involved in an illegal activity, but that doesn’t mean they won’t be held accountable in Russia.

Investment company NYDIG signed a multi-year partnership with MLB outfit New York Yankees to allow the team’s players to convert part of their salary into Bitcoin.

“We’re proud to partner with our hometown team and an iconic sports franchise, the Yankees, to further our mission of bringing bitcoin to all,” Kelly Brewster, chief marketing officer at NYDIG, said in a statement.

NYDIG is a Bitcoin-centric subsidiary of asset manager Stone Ridge Holdings Group that offers infrastructure solutions for companies and financial institutions looking to operate within the Bitcoin ecosystem

The firm’s products include a Bitcoin Savings Plan (BSP) that allows employees of organizations to convert a certain amount of their post-tax salary into the leading cryptocurrency. The best part, according to NYDIG, is that customers pay no transaction fees.

Nearly all industrial-level Bitcoin miners in Texas have fulfilled their promise to suspend operations while the state waits out a heat wave that’s expected to push its electricity grid to its limits.

The bear market continues to hit the bitcoin mining industry hard, with the prices of the latest generation of mining rigs tumbling to their 2020 lows.

Bitmain’s Antminer S19 and S19 Pro are catching bids around $20-23 per terahash (TH), according to one application-specific integrated circuit (ASIC) trading desk. For comparison, these models were priced around $40/TH in recent months, and as high as $119/TH last year, according to Luxor Mining’s Hashrate Index data.

The $20-23/TH range is something the industry hasn’t seen since around the time of the 2020 bitcoin bottom. In addition to Bitmain’s S19, S19j and S19 Pro units, MicroBTC’s Whatsminer M30s, M30s+ and M30s++ models, among others, are feeling the slump as well.

The bear market pricing is being compounded by the recent bankruptcy filing of the Celsius Mining alongside parent company Celsius Network. A source tells CoinDesk that Celsius Mining auctioned off thousands of its newly purchased mining rigs in June, with the first batch of 6,000 selling for $28/TH and a second group of 5,000 changing hands at $22/TH. According to Hashrate Index data, mining rigs that month were trading from $50-$60/TH.

As on-chain activities slow down during the crypto winter, usage of cryptocurrency mixers has doubled in 2022, with addresses classified as “illicit” being the top contributor. 

Cryptocurrency mixers, also called “tumblers,” provide anonymity to transactions, making the sender or receiver of the transaction completely unidentified. While this has a valid use case for everyday users, hackers have used it to hide from authorities.

In a report by analytics firm Chainalysis, data shows that the 30-day moving average of the total daily value received by crypto mixers reached a new all-time high of $51.8 million in April 2022. The amount is double the incoming volume received at the same time in 2021.

According to the firm, almost 10% of all funds coming from illicit addresses are sent exclusively to crypto mixers. Additionally, data from the second quarter of 2022 shows that funds sent to mixers by illicit addresses come from stolen funds and fraud shops.