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This Week in Coins: Market Freefall Slows, Universal Music Partners With LimeWire, G7 Seeks Regulation

While last week’s market crash resulted in severe liquidations, a two-month decline appears to be ending.

5 min read
Crypto. Image: Shutterstock
This week in coins. Illustration by Mitchell Preffer for Decrypt

While much of industry’s attention was spent autopsying and recovering from Terra’s historic collapse and the simultaneous market crash, zooming out and surveying the bigger picture shows a week arguably more hopeful than the previous week.

For a start, the market’s seven-week freefall has finally slowed.

Leading cryptocurrency Bitcoin was actually up 0.69% to $29,265, while Ethereum only dipped 0.88% over the seven days to $1,968, as of this writing.

There were no major losses among the top 40 cryptocurrencies by market capitalization. A few projects even thrived, with BNB blowing up 10% to $307, privacy coin Monero surging 24% to $175, and Cosmos adding 9% to $10.86.

And the view from the wreckage?

TerraUSD (UST), formerly a dollar-pegged stablecoin, is currently trading for a fraction over 6 cents. Meanwhile, LUNA, the coin that gave value to UST, is currently worth about $.0001.

Barely a fortnight ago, there were 342 million LUNAs in circulation. Today, there are a little over 6.5 trillion.

The week’s news

On Monday, the Australian Tax Office issued a statement outlining its four main priorities for “Tax Time 2022,” and among them was taxing capital gains from crypto. ATO Assistant Commissioner Tim Loh said: “Through our data collection processes, we know that many Aussies are buying, selling, or exchanging digital coins and assets, so it’s important people understand what this means for their tax obligations.”

Loh also had a stark warning for crypto investors who may be reporting losses: “Remember you can’t offset your crypto losses against your salary and wages.” According to the ATO’s guidelines, posting a net capital loss can entitle the taxpayer to a reduction on future capital gains, but not on any other income.

Australian authorities are keen to regulate crypto quickly and have promised to bring the sector “out of the shadows” with a “world-leading” regulatory framework. On Friday, the country’s largest bank, the Commonwealth Bank of Australia, halted its crypto trading pilot. Commonwealth Bank CEO Matt Comyn stressed the volatility of crypto assets and recommended more regulation in a tech briefing this week.

According to Monday’s edition of CoinShares’ “Digital Asset Fund Flows Weekly,” during last week’s market crash institutions poured nearly $300 million into exchange-traded Bitcoin funds. CoinShares’ head of research, James Butterfill, told Decrypt: “It’s the largest [investment in Bitcoin funds] since October 2021, and the 19th largest weekly since records began in 2015.”

Over on Twitter that day, Twitch co-founder Kevin Lin announced his Web3 gaming company Metatheory had raised $24 million in a funding round led by Andreessen Horowitz. 

Metatheory currently uses NFTs in its DustBreakers game, although under Lin more blockchain-based titles are expected. He said in a statement: “After stepping away from Twitch to explore what’s next in the industry, I truly believe blockchain will open the door to even more possibilities and have a major impact in the gaming, storytelling, and community building space.”

On Tuesday, South Korean press reported that the country’s Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) have launched "emergency" inspections into domestic crypto exchanges after Terra’s collapse. That same day, the press reported that conservative lawmaker Yun Chang-Hyun is calling for hearings into potentially unscrupulous profiteering by some of the country’s top crypto exchanges during the LUNA crisis.

Stock photo giant Getty Images announced on Tuesday that it's partnering with digital collectibles firm Candy Digital to turn some previously unseen images in its 500 million-strong library into NFTs, which will be sold on Candy’s marketplace. 

Former music-sharing service LimeWire—which announced its own Algorand-based marketplace in March—said on Tuesday that it's signed major label Universal Music Group to its platform. The deal will let artists on Universal or its many imprints—Interscope, Def Jam, Motown, Geffen, EMI, and Virgin among them—release tokenized collectibles via LimeWire’s upcoming marketplace.

Testifying before a congressional subcommittee on Wednesday, United States Securities and Exchange Commission (SEC) chair Gary Gensler told crypto exchanges to register with the SEC “or, frankly, we’re going to continue to bring, use what Congress has given us, in our enforcement and examination functions.”

While Gensler’s words couldn’t raise a goose pimple on the likes of Binance and Coinbase, they indicate Washington’s brightening spotlight on crypto. Speaking on a video screen at this year’s Chainalysis Links conference on Wednesday, the chairman of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, said the U.S. derivatives regulator will continue adding more resources to combat fraud and manipulation in crypto markets.

Elsewhere, the recent market crash was enough to frighten the world’s seven largest economies into multilateral action. On Thursday, Reuters reported that a draft letter by G7 countries' finance ministers and central bankers is asking the Switzerland-based Financial Stability Board (FSB) to advance "consistent and comprehensive regulation" before the next G7 gathering in Germany.

Panama President Laurentino Cortizo told a Bloomberg reporter on Thursday that he may veto a crypto bill approved by his country’s Legislature last month. Cortizo wants a guarantee that the bill will comply with global anti-money laundering standards before he approves it. Should it pass, Panamanians will be able to pay for things with crypto. The bill also mentions that Bitcoin, Ethereum, XRP, Litecoin, and Stellar all would be accepted.

On Friday, a group of Republicans in Congress introduced a bill to “protect” investors' ability to add Bitcoin to 401(k) retirement plans. If passed, the bill will prohibit the Labor Department from restricting the type of investments that 401(k) account holders can add to their retirement savings, like Bitcoin, which Fidelity Investments plans to make available later this year.

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