Crypto News Headlines (31-May-2022)

Crypto companies raised a record $30 billion of venture capital (VC) last year and the number of deals in the sector remains elevated despite the recent fall in cryptocurrency markets, Morgan Stanley (MS) said in a report Tuesday.

However, deal activity is likely to drop, mirroring trends in other VC categories, the report said.

The number of VC cryptocurrency investments peaked in December. If the crypto industry matches other sectors, the level could slide as much as 50% by the end of the year, the bank said.

A slowdown is expected as “activity across eight of the most important VC bellwether markets over the past 12 months has reset 50% from peak; worsening performance of some of the largest tech/crypto investors who are prioritizing existing holdings over deploying further dry powder, and the exit of ‘tourist capital’ as both token and equity investments become more challenging during a crypto bear market – a similar pattern seen during 2018/19,” it added.

Cardano (ADA), the Ethereum competitor is up 29% over the past 24 hours. ADA is currently trading at $0.67, according to data from CoinMarketCap.

ADA is the native token of Cardano, the proof-of-stake layer-1 blockchain that offers stiff competition to Ethereum.

The token is now the sixth-largest cryptocurrency with a market capitalization of $22.6 billion, overtaking Ripple’s XRP.

Despite today’s bullish action, ADA is still down 78% from its all-time high of $3.10 recorded in September 2021.

Cryptocurrency bulls were relieved Monday with a bounce in digital assets, especially as the sector failed to rally last week alongside publicly traded technology stocks.

Bitcoin (BTC) rose almost 7%, breaking the $31,000 mark driven by global investors as Asian and European equity markets climbed. American markets were closed for the Memorial Day holiday.

“Bitcoin broke above $30,000, but it needs to hold the $29,300 level on a retest to suggest continuation to the upside,” Marcus Sotiriou, analyst at digital asset broker GlobalBlock said in a note Monday. “Relief has been long overdue in the crypto market, as the U.S. stock market already rallied last week, after Jerome Powell’s speech that gave the market clarity on their plans to carry out a soft economic landing.”

Elsewhere in the latest crypto rally, ether (ETH) jumped just over 8% to about $1,940. Cardano (ADA) was a standout among Ethereum alternatives, surging about 14% to about $0.54.

Paraguay is viewed by many as a potential hot spot for cryptocurrency adoption due to low electricity costs and relatively soft taxation. The government has recognized this opportunity by pushing forward new legislation around digital assets.

On May 25, a bill that regulates cryptocurrency trading, mining and custody was approved by the Paraguayan Congress in a vote of 40 to 12. The bill must now be ratified by the Senate to finally reach President Mario Abdo Benítez.

If ratified, the bill would apply to any individual or organization in Paraguay involved in the mining, commercialization, trading, transfer, production, custody or administration of cryptocurrencies and related functions. The legislation proposes financial and legal guarantees to businesses and individuals, while also imposing restrictions on the matters of electricity spending and taxation.

The Mars4 game will be released in phases. The first stage is a 3D demo version of the game that may be played by any landowner. It’s the first step toward a multiplayer Mars metaverse in which people can interact with one another and form habitats. This demo will be used to gather input from players in order to develop the game in the future.

The Mars Control Center, which is expected to launch at the end of June this year, is another major release. Players can access their owned NFTs, trade and manage assets, check their revenue and leaderboards, and get earnings on MCC, which provides a variety of purposes linked to controlling the game and its assets. MCC allows you the opportunity to finally interact with your assets and benefit from them.

Seychelles-based cryptocurrency exchange KuCoin has announced a strategic partnership with the Pyth Network, according to the Financial Post, citing the statement from KuCoin.

In the latest partnership, KuCoin is committed to providing real-time prices of trading pairs listed on KuCoin to Pyth network, enabling all traded currencies on KuCoin to the Pyth network, completing the complete chain of crypto market prices.

The Pyth Network is a specialized oracle solution for processing latency-sensitive financial data that is typically kept behind a “walled garden” in a central authority.

The whole point of the Pyth network is to find a new cheap way to put this unique data on-chain and aggregate it securely.

Terra’s newly minted Luna token (LUNA) rallied by 39.41% on Tuesday after the token was listed on Binance.

At the time of writing, Luna 2 was trading at $8.18 with a self-reported circulating supply of 210 million, giving it a market capitalization of $1.8 billion, according to CoinMarketCap.

The token was launched on a new blockchain dubbed Terra 2 following the de-peg of algorithmic stablecoin TerraUSD (UST).

Investors that held UST or Luna before the depeg, as well as those who purchased either asset following the depeg, were airdropped the new token with varying levels of distribution.

The old Luna token, which is trading at $0.0002, has been re-branded Luna Classic (LUNC). The new token was part of a revival plan for Terra.

South Korean prosecutors are reportedly looking into the recent Terra crash to see if there were signs of intentional price manipulation and other issues, the local television network JTBC reported on Saturday.

Per the report, the Seoul Southern District Prosecutors’ Office’s joint financial and securities crime investigation team has also summoned former employees of Terraform Labs who were involved in the initial development of the Terra ecosystem in 2019.

One of those employees has reportedly revealed that the team had doubts about the TerraUSD (UST) stablecoin design from the very start.

The China state-owned media outlet, the Economic Daily, has signaled that the Chinese government may introduce even tighter regulations on cryptocurrencies and stablecoins due to the collapse of the Terra ecosystem.

In an article published May 31, the outlet detailed the collapse of TerraUSD (UST) and Luna (LUNA), explaining the workings of the algorithmic stablecoin. It used the so-called black swan event to praise the Chinese government’s decision to ban cryptocurrency.

“My country has been cracking down on virtual currency trading speculation and a large number of trading platforms,” reporter Li Hualin wrote before adding, “this has effectively blocked the transmission of this risk in China and avoided investment risks to the greatest extent possible.”

Hualin explained that “many other countries” are looking to regulate stablecoins following the Terra collapse and quoted Zhou Maohua, a researcher at the China Everbright Bank, to make a case for further restrictions within China:

“In the future, our country will also speed up the completion of regulatory shortcomings, and introduce targeted regulatory measures for the risk of stablecoins to further reduce the space for virtual currency speculation, illegal financial activities and related illegal and criminal activities, and better protect the safety of the people.”

Bank of America (BOA) CEO Brian Moynihan talked about cryptocurrency in an interview with Yahoo Finance Live at the recent World Economic Forum event in Davos, published Saturday.

He was asked about his bank’s plans for cryptocurrencies. “The reality is that we run a payments business across our platform. It’s trillions of dollars a day, and almost all of it is digital,” the executive replied, adding:

If you think about the blockchain, we have hundreds of patents on blockchain as a process and as a tool and as a technology.

However, with regard to cryptocurrency, he revealed: “We’re not engaging in accounts for people in cryptocurrency … we’re not allowed to, frankly.”

The Bank of America chief explained: “Because we’re regulated and they [regulators] have said you can’t. They’ve said, ‘you have to ask us before you do it and, by the way, don’t ask’ — was basically the tone.” He emphasized:

The reality is that we can’t do it by regulation. We’re not really allowed to engage.