Crypto News Headlines (16-Jun-2022)

Bitcoin’s (BTC) price fluctuated after the Federal Reserve announced further monetary tightening on Wednesday, falling to as low as $20,270 in the minutes after the Fed’s statement. But roughly an hour after the announcement, the cryptocurrency was changing hands at $21,444.

In a widely anticipated move, the central bank announced that it will raise the fed-funds rate, the interest rate at which depository institutions trade balances held at the central bank, by three-quarters of a percentage point, or 75 basis points.

Fed Chairman Jerome Powell said that members of the Federal Open Markets Committee said the inflation surprise on the upside warranted “strong action at this meeting” rather than waiting another six weeks for the FOMC’s next gathering.

“We decided we needed to go ahead, and so we did,” Powell said. “We came to the view that we’d like to do a little more front-end loading on that.”

The rate hike is the Fed’s highest since 1994 and underscores the inflationary pressure on the U.S. economy.

The Russian Export Center (REC), which is a state-run institute tasked to support Russia’s exports, is now considering the employment of digital currencies as an alternative approach to international settlements under sanctions.

The organization believes that setting up a “cross-border digital sandbox” is a promising initiative. The project will aim to create opportunities for fintech companies to process payments using digital financial instruments on behalf of Russian exporters and importers.

Settlements in cryptocurrencies represent an alternative payment system, which will develop incredibly quickly now, according to Veronika Nikishina who heads the REC. Speaking at the St. Petersburg International Economic Forum, she elaborated:

As a development institution that captures all current trends, we are now closely studying the possibility of becoming a digital sandbox to pilot the use of cryptocurrencies in cross-border payments.

OpenSea has moved to the “Seaport Protocol,” a new smart contract that the NFT marketplace says will allow its 1.8 million users to save money on Ethereum gas fees.

With the Seaport contract, users will be able to save roughly 35% on gas, the company said. And new accounts will no longer require that one-time “setup fee” OpenSea previously charged.

NFTs are blockchain-based tokens that show ownership over digital or physical assets. Gas fees are essentially transaction fees, and they can rise quickly during periods of high demand.

Prior to OpenSea’s migration to Seaport, it used the less-efficient Wyvern protocol, which was also leveraged by attackers back in February in an off-platform phishing scam to siphon $1.7 million from traders.

“We estimate the new contract will save [over] $460 million in total fees each year,” OpenSea wrote in a Twitter thread detailing the Seaport announcement.

A severe drop in crypto prices this year has also impacted several crypto exchanges, with Coinbase recently announcing an 18% job cut.

But some exchanges have managed to buck the trend, and are expanding operations even as markets tumble.

Kraken follows Binance in announcing openings

Kraken, the fourth-largest exchange by daily volumes, announced that it will be hiring over 500 employees despite the plunge in the market. The exchange said it is determined to meet its hiring commitments irrespective of the decline in crypto prices.

Recently, Binance, the largest crypto exchange, also said it has more than 2,000 roles open for hire. The exchange is also pursuing expansions into Europe and Southeast Asia- the latter of which has a large number of crypto users.

TRON also declared that it will be increasing its workforce by nearly 50%, CEO Justin Sun said. Sun’s invitation comes despite pressure on the firm to support its TRX and USDD tokens.

Chairman of the United States House of Representatives Ways and Means Committee Richard Neal sent a letter to the Government Accountability Office (GAO), a legislative branch watchdog, asking the agency to weigh in on the use of cryptocurrency in retirement plans. Defined contribution plans such as the 401(k) are increasingly allowing savers to incorporate cryptocurrency in their plans, the lawmaker said, and concerns have arisen over crypto’s volatility and limited oversight.

Neal asked the GAO to compile a list of firms offering crypto options in their 401(k) plans, with an indication of the extent of utilization of those options. He also asked for a description of the administration of cryptocurrency in those plans and an assessment of the regulatory oversight and guidance they receive. The GAO publishes analyses and recommendations on a wide variety of issues of importance to the U.S. legislature. Its findings do not have the force of law.

Neal’s letter comes a day after Labor Secretary Marty Walsh told the House Education and Labor Committee that his department is considering a rulemaking on crypto in retirement plans. The Department of Labor (DOL) issued a compliance assistance release in March that promised the department would “conduct an investigative program aimed at plans that offer participant investments in cryptocurrencies and related products.”

Singapore-based crypto hedge fund Three Arrows Capital (3AC) is facing insolvency issues following the extreme market condition in the crypto industry.

Reports show that the hedge fund manager has liquidated at least $400 million worth of its crypto assets to other crypto lending firms in order to cover its debts. The firm is currently in the process of repaying lenders and other counterparties.

On-chain data suggests Three Arrows Capital is selling its existing crypto positions to lower collateral requirements for certain positions. Blockchain data indicates that one of 3AC’s wallets has a debt totalling $183 million.

Since its liquidation, 3AC is said to have maintained limited contact with counterparties. However, Su Zhu, a co-founder of the firm appeared to have tried to address the issue on Twitter last morning stating: “We are in the process of communicating with relevant parties and fully committed to working this out,” he said, without mentioning specific details.

Cryptocurrencies and other virtual assets are increasingly spreading in Kyrgyzstan, the nation’s central bank recently noted. The regulator reminded that using them to buy or sell goods and services is still against the law, with the Kyrgyzstani som remaining the only legal tender in the country.

Quoted by local media, the monetary authority also issued a warning regarding the risks linked to decentralized digital currencies. “No one, as a rule, is liable for cryptocurrency. It does not have financial support. It has no real value due to the fact that it is not tied to any currency or other asset,” it said.

This creates high risks of exchange rate volatility and loss of value, the National Bank of Kyrgyzstan (NBK) elaborated. It also pointed to the risks with settlements in cryptocurrency, stemming from its features and the absence of a “controlling central body.” The NBK further stated:

Therefore, we recommend citizens to be prudent and refrain from using cryptocurrency for payments and settlements. Users assume all possible risks and negative consequences when making settlements using cryptocurrency and virtual assets.

Cryptocurrencies have rallied following the announcement of a 75 basis point hike by the U.S. Federal Reserve. With inflation in the U.S. soaring past 8.6% in May 2022, the Fed made the the most aggressive rate hike in 28 years yesterday.

Bitcoin (BTC), the largest cryptocurrency by market cap, is up 5.7% over the past 24 hours and is currently hovering around $21,400, according to data from CoinMarketCap. Ethereum (ETH), the second-largest cryptocurrency, has gained 10.9% in the last 24 hours and is currently changing hands for around $1,140.

The global cryptocurrency market capitalization is up 6.76% to $921.5 billion over the past 24 hours, according to data from CoinMarketCap.

Apart from Bitcoin and Ethereum, Solana (18.12%) and Polkadot (11.50%) (20.61%) have also posted double-digit gains over the past 24 hours.

Korea’s leading exchanges have agreed to form a new emergency system that will spring into action within 24 hours should another Terra-style collapse threaten to come to pass.

Under the new system, exchanges will convene to respond to sudden adverse market effects such as what happened with Terra in May.

The agreement came after five of the country’s largest crypto exchanges, Upbit, Bithumb, Coinone, Korbit and Gopax attended a session at the National Assembly, South Korea’s legislature to address market fairness on Monday, according to a report from local news outlet Daily Sports.

Exchange leaders, members of National Assembly, and Financial Supervisory Services (FSS) chairman Lee Bok-hyeon discussed aspects of a new code of conduct exchanges will voluntarily adhere to in order to protect investors.

The cryptocurrency market needs a break.

After days of continuous tumble, the prices of digital currencies seem to want to take a break, even catch their breath.

The Federal Reserve gave investors some respite by raising its rates very sharply on June 15, the biggest increase in 28 years. The central bank raised its key rates by three-quarters of a percentage point, or 0.75 percentage point, the biggest increase since 1994, in an attempt to control higher-than-expected inflation.

With this third increase in a row, these rates are now in a range of between 1.5 and 1.75%. The Fed also announced that it expects inflation to be 5.2% this year, against 4.3% projected in March, and will therefore make further hikes at its next meetings in 2022.

At the same time, it anticipates weaker economic growth than expected this year in the United States, at 1.7%, against 2.8% previously. It also expects the unemployment rate to be higher than expected at 3.7%, against 3.5% previously.