South Korean Court Issues Warrant for Do Kwon’s Arrest, Investment Industry Giants Launch Crypto Exchange-Top 5 Crypto Stories September 14

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Here is a quick breakdown of the biggest news and developments in the cryptocurrency industry for September 14, 2022.

1. South Korean Court Issues Arrest Warrant for Terraform Labs Founder Do Kwon

A South Korean court has issued an arrest warrant for Terraform Labs founder Do Kwon. Terraform Labs led the development of Terra, a blockchain designed to support an ecosystem of algorithmic stablecoins.

Terra’s business model of maintaining the price of stablecoins only through an arbitrage mechanism with LUNA tokens on the other side has proven unsustainable. In May this year, the platform’s largest stablecoin UST lost its peg to the US dollar, triggering hyperinflation in LUNA’s supply. In total, about $60 billion was wiped out as UST and LUNA prices approached zero.

After the Terra ecosystem collapsed, Terraform Labs employees were banned from leaving South Korea. In an interview in August, Kwon claimed that South Korean prosecutors were not in contact with him.

Even though the cryptocurrency market is currently in a sell-off, the news likely contributed to the particularly poor performance of LUNA and LUNC. LUNA fell 36.3% in the past 24 hours, while LUNC fell 21.2%.

2. Investment Industry Giants Launch EDX Cryptocurrency Exchange

In another sign that institutional investors are still interested in cryptocurrency, a group of leading investment firms have announced cryptocurrency exchange EDX Markets. The project is the result of a collaboration between Charles Schwab, Citadel Securities, Fidelity Digital Assets, Paradigm and others.

According to a Press release, the platform will implement “traditional financial market best practices” to provide cryptocurrency trading services to retail and institutional investors. EDX Markets will also pool liquidity from multiple market makers to provide tight spreads and high liquidity. Trades on the EDX Markets exchange will be settled on a blockchain.

3. Maker lifts stETH debt cap to reduce reliance on centralized stablecoin USDC

Maker, the decentralized finance protocol that issues and manages the Dai stablecoin, has adopted a new proposal this will make Dai less dependent on the centralized USDC stablecoin. The protocol doubled the debt cap on its stETH vault, which is now set at 200 million DAI. This basically means that up to 200 million DAI tokens can be minted using stETH as collateral.

The vault where Wrapped stETH can be used as collateral to mint DAI has a 0% stability fee, giving DAI more incentive to be minted against stETH.

USD Coin is a centralized stablecoin issued by the CENTER consortium. Regardless, this is currently the biggest source of support for Dai, a stablecoin meant to be as decentralized as possible. Concerns about the implications of this began to resonate louder when CENTER blacklisted 38 Ethereum addresses after US OFAC sanctioned the Tornado Cash privacy protocol.

4. Doodles raises $54 million

Doodles, the company behind the NFT collection of the same name, has raised $54 million at a valuation of $704 million. The investment was led by Seven Seven Six, and also saw participation from 10T Holdings, Acrew Capital and FTX Ventures.

According to the company, they plan to use the investment to monetize Doodles’ intellectual property in the music, culture and entertainment industry. Doodles also plans to spend the funds on acquisitions and development of proprietary technologies and experiences for collectors of their NFTs.

The investment appears to have sparked market interest in NFT Doodles. The collection tops today’s OpenSea trading volume charts, with traders trading 883 ETH ($1.43 million) from Doodles NFT today.

5. FTX CEO apologizes for yesterday’s website outages

Sam Bankman-Fried, the CEO of cryptocurrency exchange FTX, said apologized for an issue that prevented some traders from using the exchange’s trading interface yesterday.

Cryptocurrency trading volumes jumped sharply after the release of US CPI figures yesterday. The increased load on the FTX website caused the page to auto-refresh unexpectedly, causing problems for users of the exchange’s web interface.

Cryptocurrency exchanges often struggle to keep up with demand during sudden spikes in trading activity, which can lead to losses for traders. For example, a user may not be able to sell their cryptocurrency during a price drop or close a leveraged trade, resulting in liquidation.

Bankman-Fried said yesterday that a fix for the auto-refresh issue is in the works and will be available soon.

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