7/22/22 FAL Weekly Digest
The FAL Weekly Digest is a source for this week’s biggest cryptocurrency-related news and updates. This newsletter features excerpts and links to this past week’s biggest news articles written by members of FAL Consulting’s writing team or gathered from other listed sources.
Crypto Mining
Bitcoin Mining Difficulty Finally Drops From Forgoing Texas Miners
Texas saw triple-digit, record breaking, temperatures last weekend. The state’s grid operator, Electric Reliability Council of Texas (ERCOT), is providing financial incentives by paying companies to decrease operations in peak periods, so that more energy can be delivered to the system.
In February, energy issues arose as temperatures were getting very low. Miners voluntarily shut down or paused operations in Texas to allow residents to receive power for heat.
Bitcoin miners in Texas are required by law to turn off their mining machines when the state faces energy shortages. Core Scientific powered off all mining machines in Texas to provide support for the ERCOT grid. While Riot will also be participating, they have agreed to curtail energy consumption when called on.
Riot is operating North America’s largest Bitcoin mining facility in Whinestone, Texas capable of 750 megawatts and is also developing a gigawatt mining facility in Navarro County, Texas.
Lawsuits
Celsius Reveals Mining-Focused Reorganization Plan at Bankruptcy Hearing
Celsius Network is a crypto lender that allows users to buy, swap, earn, borrow, and send cryptocurrencies on their platform. Celsius also has a subsidiary, Celsius Mining, that mines cryptocurrencies. Both companies are deeply in debt and Celsius filed for Chapter 11 bankruptcy on July 13. Voyager Digital also filed for bankruptcy on July 6.
The bankruptcy hearing started Monday and documents show that Celsius owes just under $5 billion USD to its customers, while their digital asset holdings dropped to $1.7 billion. Celsius suspended withdrawals on their platform on June 12, after users withdrew nearly $2 billion from deposits after the Terra Luna crash.
As a potential solution, Celsius presented a reorganization plan that heavily focuses on crypto mining from its subsidiary, Celsius Mining.
First Ever Cryptocurrency Insider Trading Case
“Fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street. And the Southern District of New York will continue to be relentless in bringing fraudsters to justice, wherever we may find them.”
US Attorney Damian Williams
A former Coinbase product manager, Ishan Wahi is being charged on allegations of insider trading and wire fraud, along with two associates not linked to Coinbase (brother and friend of the accused). The Department of Justice (DOJ) released this statement regarding the three individuals charged.
Ishan Wahi worked at Coinbase as a product manager for asset listings. This position provided access to the list of crypto assets to be listed as well as the timing of the public announcements and other confidential information.
The DOJ alleges that Wahi tipped off his two associates (his brother and a friend) on future listings on at least 14 occasions, profiting approximately $1.5 million.
In attempts to conceal their trades, the accused used accounts at centralized exchanges held in other peoples names before transferring gains into anonymous Ethereum wallets.
South Korean Police Raids Several Crypto Exchanges With Possible Connections to Terra
In South Korea, authorities launched a full-blown investigation in May, looking into whether price manipulation and other ill-intention moves were behind the fall of UST.
South Korean exchange Upbit and other cryptocurrencies exchanges were raided by police on Wednesday, by a group of detectives looking into the fraud case connected to the fall of Terraform Labs' tokens TerraUSD (UST) and LUNA, according to a report by Yonhap News Agency.
The fall of Terra also saw many countries beginning to question whether the regulatory safeguards were in place for the people affected by the collapse, leading to much backlash on the industry.
NFTs
Minecraft Bans NFTs
Arguably the most popular game in the world, Minecraft has chosen to ban the use of NFTs on its platform. The move came after several projects were revealed to be working on creating the first metaverse within the already established game.
Mojang developers of Minecraft shared the news in a post detailing moves within the game usage guidelines, which are all aimed at NFTs.
Minecraft will be banning any blockchain technology being utilized on its servers and forbidding the use of the game's imagery within any and all NFT projects.
“To ensure that Minecraft players have a safe and inclusive experience, blockchain technologies are not permitted to be integrated inside our client and server applications, nor may Minecraft in-game content such as worlds, skins, persona items, or other mods, be utilized by blockchain technology to create a scarce digital asset,” the post reads.
Bored Ape Metaverse Releases First Public Playtest
The long-awaited gaming metaverse from the creators of the Bored Ape Yacht Club, Otherside has officially begun letting users get a sneak peek at what they can expect to experience when it is finally released.
This past Saturday, Yuga Labs invited 4,300 “Voyagers”, to participate in a tour/tech demo of the newly created ape-inhabited space. All Otherside players will have to embark on a similar journey prior to unlocking the whole metaverse, which is still under development
The allotted players who participated in the meta tour of the “Biogenic Swamp'”, which encapsulates the Otherside center, this past weekend were all holders of the recently controversial “Otherdeeds,” deeds to plats of digital land in the game.
Tesla Points to Covid As Reason For Selling 75% of BTC Holdings
In an earnings call that occurred 7/20, Tesla revealed that it had sold 75% of its Bitcoin holdings, worth around $936 million, as was reported by its Q2 earnings.
Tesla CEO Elon Musk explained the decision by saying "The reason we sold a bunch of our Bitcoin holdings was that we were uncertain when the COVID lockdowns in China would alleviate," Musk said on the call. "So it was important for us to maximize our cash position, given the uncertainty of COVID lockdowns in China."
During the earnings call, Tesla claimed to have exchanged its Bitcoin holdings for a $106 million profit. Although the company sold this time out, it claims that it does not rule out a future where they reinvest in the coin.
Market
Binance Savings Welcome Bonus Now Includes Dogecoin APY
Binance announced a new welcome bonus for new Binance Savings users. With the welcome bonus, new users can earn double the APY with BTC, ETH, or DOGE on their Flexible Savings. The promotional period run from 07/20 to 08/02 3:59 PM UTC.
BTC yields the highest returns with a maximum of 5% standard APY plus 10% promotional APY during the promo period.
Read more on Daily Reads
XRP Jumped to 6th Largest Crypto by Market Cap
XRP experienced a bullish rally earlier this week. The market cap shot up to $17.63 billion, climbing past Binance’s USD, Cardano, Solana, and Dogecoin. This performance was triggered by the recent positive impart of the SEC lawsuit as well as the final emptying of McCaleb’s wallet.
XRP is currently sitting at the 7th largest cryptocurrency with a market cap of $17.2 billion. Binance took back the 6th spot with a market cap of $17.56 billion.
Market Cap: $1.028 T; up from $939.962 B last week
24h Volume: $73.1 B; down from $74.93 B last week
BTC Dominance: 42.1%; down from 42.6% last week
ETH Dominance: 18.1%; up from 15.9% last week
None of our posts or newsletters are meant to be taken as financial advice.
