Binance

Small players lose faith in crypto after sell-off

>>> Don’t Miss Today’s BEST Amazon Deals!<<<<

WASHINGTON/MUMBAI, May 17 (Reuters) – Nofe Isah, a 25-year old based in Nigeria, has been investing in crypto since January. Last week, she lost all of her $5,000 in savings as cryptocurrency luna went into free fall.

Isah, a recently unemployed administrative officer, vowed she would never invest in crypto again.

“I can’t believe I fell for crypto,” she told Reuters by phone. “I’m just trying not to get myself depressed. Crypto has taken my money, fine. It shouldn’t take my head.”

Register now for FREE unlimited access to Reuters.com

The crypto market, known for its wild price swings, slumped last week as investors yanked money from riskier assets amid worries over soaring inflation and rising interest rates.

Bitcoin, the world’s largest cryptocurrency, fell as low as $25,401 on Thursday, its lowest since Dec. 2020. It hit a record high of $69,000 in November.

Small tokens were hit too, with ether, the second-largest token, dropping more than 15% to its lowest since June. Luna – a digital coin widely hyped on social media and backed by institutional crypto investors – shed nearly all of its value.

Small traders such as Isah have flocked to cryptocurrencies in the hope of quick returns, despite warnings from regulators that the emerging assets can be high risk.

Platforms such as Robinhood, which has 23 million customers across a variety of assets, have helped spur retail investing, including in crypto. Around a quarter of Robinhood’s transaction-based revenues came from cryptocurrencies in the first quarter of this year, Robinhood said in its latest earnings statement.

Overall user numbers at crypto platforms have ballooned. Binance, the world’s biggest crypto exchange, had some 118 million clients last month, up from 43.4 million in the first quarter of last year.

But after last week’s turmoil, online forums were awash with tales of woe, as retail investors expressed anguish about their losses.

“I’m 49, big mortgage, 3 kids etc. My retirement party is on ice for the foreseeable future!”, a user with the handle Boring-Fun-3646 said on Reddit.

Another user with the handle AdventurousAdagio830 posted on Reddit: “It doesn’t seem real that I lost $180,000.”

‘DEATH SPIRAL’

Emblematic of crypto risks was the collapse last week of terraUSD, a stablecoin designed to keep a constant value via a complex algorithm that involved luna.

When the coins came under heavy selling pressure, the system broke down. TerraUSD – designed to keep a value of $1 – traded around 9 cents on Tuesday while luna plunged to near-zero, based on CoinGecko data. read more

Tejan Shrivastava, a 31-year old graphic designer from Mumbai, who has been investing in cryptocurrencies for the last year, had his $250 investment wiped out by luna’s collapse.

“It was stuck in a death spiral. All the money was gone in 15 minutes,” he told Reuters.

“I don’t even know if I’ll invest in crypto in the future. I have a crypto portfolio, but I am planning to liquidate it once it reaches break even.”

Luna’s fall wiped out most of its market value which had been above $40 billion as recently as early April, CoinGecko data shows.

Retail investors’ online frustration even spilled over into the real world.

Seoul police last week said they were seeking a suspect after an unidentified individual rang the doorbell of the apartment of Do Kwon, the founder of terraUSD, and ran away.

Police would investigate whether the suspect had invested in cryptocurrencies, a Seoul police officer told Reuters.

PATCHY REGULATION

Through its 13-year life, the crypto sector has been peppered by vertiginous climbs and sudden free falls. In November, for instance, bitcoin slumped by a fifth in just under two weeks after touching a record $69,000. Six months earlier, it had tumbled by almost 40% in just nine days.

Yet crypto’s latest crash – which pushed the sector’s combined value to $1.2 trillion, less than half of where it was last November – led to the crushing of luna, which on May 1 was the eighth-largest cryptocurrency by market capitalisation.

Cryptocurrencies are subject to patchy regulation across the world, with traders of bitcoin and the panapoly of smaller tokens typically unprotected against price slumps.

But it is difficult to gauge the scale of retail investors’ pain from the crypto plunge and the repercussions on future appetite given the opaque nature of the market.

In Britain more than 4% of adults – some 2.3 million people – own cryptocurrencies, data published last year by the UK financial watchdog showed.

Britain’s watchdog said understanding of crypto was falling compared with a year earlier, “suggesting that some crypto users may not fully understand what they are buying”.

Still, some small investors are keeping the faith.

Eloisa Marchesoni, based near Tulum in Mexico and investing with a crypto syndicate, said she would not give up.

“I am looking to buy the dip – we are all waiting for bitcoin to go down to $22,000, which is not something too probable but not something that’s ‘not probable at all’.”

Marchesoni is also hedging her crypto bets with physical assets — “cars because you can lease them, watches, real estate”.

Bitcoin was hovering around $30,000 on Tuesday, having lost more than 20% so far this month.

Regulators remain on alert. The British government said last month it will regulate stablecoins. read more

The U.S. Securities and Exchange Commission is toughening its stance. Gary Gensler, SEC chair, said this week investors in cryptocurrencies needed more protections. read more

Register now for FREE unlimited access to Reuters.com

Additional reporting by Alun John in Hong Kong and Soo-hyang Choi in Seoul; Writing by Carolyn Cohn, Elizabeth Howcroft and Tom Wilson in London. Editing by Jane Merriman

Our Standards: The Thomson Reuters Trust Principles.

View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<

Crypto Industry Helps Write, and Pass, Its Own Agenda in State Capitols

In July, the state ordered a dozen A.T.M. providers that sell crypto in exchange for cash — including Cash Cloud, Coin Now and DigiCash — to register as money transmitters, despite appeals from the companies, documents obtained by The Times show.

Last year, Mr. Aloupis introduced the bill to exempt two-party crypto transactions, after lobbying appeals by Mr. Armes and a trade group he leads, the Florida Blockchain Business Association. (Its members include Binance, the large crypto exchange.) The bill failed to win Senate approval, and it was reintroduced for this year’s session.

Russell Weigel, the Florida commissioner of the Office of Financial Regulation, said he endorsed the legislation that Mr. Armes had championed.

“If I go and buy groceries at your food store, that’s a two-party transaction,” Mr. Weigel said. “Do I need a license for that? It seems absurd.”

Lobbyists for Blockchain.com, a cryptocurrency exchange that moved last year from New York to Miami, and Bit5ive, which manufactures crypto mining equipment in the Florida area, joined the effort, contacting dozens of state lawmakers.

“They are very pro crypto,” Robert Collazo, the Bit5ive chief executive, said of Florida lawmakers.

In the future, the company plans to raise money for crypto-friendly legislators in Florida, said Michael Kesti, Bit5ive’s lobbyist. The legislative affairs director of the Florida blockchain association, Jason Holloway, is already running for the State House, with donations — some in cryptocurrency — from Mr. Armes and others.

“I don’t want it to seem like we are paying for the influence,” Mr. Kesti said. “But we do want to support them.”

View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<

Josh Harris Steps Down From Apollo

Vegan milk is now a multibillion-dollar business on Wall Street. Oatly, the oat milk maker, priced its I.P.O. at $17 a share, the top end of its range, valuing it at about $10 billion. Part of the reason it appeared to avoid broader market declines is that it courted investors focused on so-called E.S.G. principles.

Whatever you think about crypto, you’re right

Even by Bitcoin’s standards, it’s been a wild week. A particularly steep drop in the cryptocurrency yesterday seemed to drag the entire market down with it, and the frenzy led to outages at big exchanges like Binance and Coinbase. Then, it came roaring back in late trading (Elon Musk tweeted about it) and has held the gains so far today. Still, Bitcoin is down by about a third from the all-time high it set just over a week ago.

The episode proves the point of skeptics that digital assets are too volatile to be taken seriously, and of die-hard supporters who say that the ups and downs come with the territory. DealBook spoke with Changpeng “C.Z.” Zhao, the C.E.O. of Binance, the world’s largest crypto exchange, about what it all means.

“It was a busy day but it happens,” C.Z. said. “I think it’s pretty typical.” It’s a commonly held belief among the crypto crowd that big corrections are part of the journey to new heights. “If you look at 2017, where there was a bull market, there were at least two instances of 40 percent drawdowns,” he said. New investors rushing in “may or may not be fully committed” but he believes it’s good for the markets to “shake out” the jittery types.

Lawmakers aren’t so sure. Yesterday, the Senate Banking Committee chair, Sherrod Brown — a crypto skeptic — wrote to the acting Comptroller of the Currency, Michael Hsu, with concerns about crypto companies getting approved for national trust charters. In particular, Brown mentioned that the approvals came under the former acting comptroller, Brian Brooks, who once worked for Coinbase and recently became the C.E.O. of Binance’s U.S. division.

“Given the many uncertainties present in the digital asset landscape as identified by other regulators, the volatility of digital asset valuations, and the disproportionate influence individuals can have on entire cryptocurrency markets, the O.C.C. is not in a position to regulate these entities comparably to traditional banks,” Brown wrote.

All eyes are on the regulators. One factor in yesterday’s crash appeared to be a warning from China’s central bank that reiterated the ban on financial institutions in the country dealing in cryptocurrencies. Many of the crypto market’s ups and downs come amid questions about regulation driving mainstream acceptance (or not), as when the launch of a Bitcoin futures exchange in 2017 accompanied the last big run-up in crypto prices.

The next milestone, perhaps, is whether the S.E.C. will approve proposals for a Bitcoin E.T.F., which it will likely decide by the end of the year. Crypto’s champion at the S.E.C., commissioner Hester Peirce, last week responded to her colleagues’ qualms about Bitcoin by saying she hopes American investors will “finally” have access to crypto-based securities, so it’s clear where she stands.

“It was the right thing to do for the country.”

— Joseph Blount, the C.E.O. of Colonial Pipeline, in his first public interview about paying a ransom to hackers after a cyberattack crippled its systems. Colonial paid in Bitcoin worth $4.4 million, but the decryption tool it received in return didn’t immediately work, and the pipeline was shut for six days.

View Source

As Scrutiny of Cryptocurrency Grows, the Industry Turns to K Street

The board of advisers at the digital chamber is stuffed with former federal regulators, including a former member of Congress and a recent chairman of the Commodity Futures Trading Commission, J. Christopher Giancarlo, who was named to the board of BlockFi, a financial services company that tries to link cryptocurrencies with traditional wealth managers.

Max Baucus, the Democratic former chairman of the Senate Finance Committee, and Jim Messina, a former top Obama adviser, also have recently been named to senior industry posts.

Lobbying disclosure records show that at least 65 contracts as of early 2021 addressed industry matters such as digital currency, cryptocurrency or blockchain, up from about 20 in 2019. Some of the biggest spenders on lobbying include Ripple, Coinbase — the largest cryptocurrency exchange in the United States — and trade groups like the Blockchain Association.

The lobbying burst is one of several recent signs nationwide that the industry is becoming a bigger presence in the economy. FTX, the cryptocurrency trading firm, is spending $135 million to secure the naming rights to the home arena of the Miami Heat.

The billionaire Elon Musk, who hosted “Saturday Night Live” this weekend, was asked about Dogecoin, a cryptocurrency featuring the face of a Shiba Inu dog that was created as a joke but has recently surged in value. “It’s the future of currency. It’s an unstoppable financial vehicle that’s going to take over the world,” Mr. Musk said, before adding, “Yeah, it’s a hustle.” The price of Dogecoin plunged nearly 35 percent in the hours after the show aired.

With the industry’s hires of recent government officials, claims of conflicts of interest are already starting to emerge.

Jay Clayton, who was the S.E.C. chairman until December, is now a paid adviser to the hedge fund One River Digital Asset Management, which invests hundreds of millions in Bitcoin and Ether, two cryptocurrencies, for its clients. Mr. Clayton declined to comment.

View Source