Blockchain This Week – 3AC’s Bullwhip Effect, Meta Ditches Novi, Reddit’s NFT Marketplace, Polygon’s Web3 Phone Venture

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Voyager Files for Bankruptcy

Crypto broker Voyager Digital followed its borrower, crypto hedge fund, Three Arrows Capital (3AC), and filed for Chapter 11 bankruptcy in the US Bankruptcy Court of the Southern District of New York. As per the filing, Voyager has over 100,000 creditors and between $1 and $10 billion in assets and liabilities. Trading of Voyager Digital shares was halted following its bankruptcy, but not before its stock plummeted close to 30% compared to last week. Meanwhile, the Federal Deposit Insurance Corporation (FDIC) has launched a probe into Voyager Digital for allegedly duping users. FDIC is probing whether Voyager falsely claimed that it is FDIC insured, using its partnership with Metropolitan Commercial Bank.

Alameda – Lender or Borrower?

A few weeks back, Voyager signed a term sheet with Sam Bankman Fried (SBF) headed Alameda Ventures, with Alameda offering a $500 million revolving line of credit. But, in the bankruptcy filing of Voyager, it is revealed that Alameda also owed $377 million to Voyager, the second largest borrower after 3AC.

Genesis Liquidated 3AC in June

Genesis CEO Michael Moro has disclosed that the large counterparty who failed to meet the margin call, due to which Genesis suffered losses, was indeed Three Arrows Capital (3AC). According to Moro, since the 3AC’s bankruptcy proceedings are in progress, he can reveal the name.

An End to Libra’s Three Year Saga

Meta, a.k.a Facebook, is putting an end to what started as an ambitious Libra digital currency project by shutting down Novi, its digital wallet payments pilot launched in October last year. The tech giant is considering repurposing the digital wallet technology for future products, including its current focus, metaverse, though the details are sketchy at best.

Vauld Suspends Withdrawals

Yet another crypto lender, Singapore based Vault, has suspended withdrawals and trading, citing “financial challenges.” Vault, which lists Coinbase Ventures, Peter Thiel’s Valar Ventures, and Pantera Capital as its backers, is said to be exploring restructuring options and has engaged with firms for financial and legal advice.

Nexo Looking To Buy Vauld

Crypto lender Nexo is looking to buy 100% of struggling Vauld with the intent to deepen its presence in Asia. To this effect, it has signed an indicative term sheet that provides Nexo with a 60 day explorative period where it would analyze the feasibility of this intended acquisition.

WonderFi Buys Coinberry

Investor Kevin O’Leary backed crypto marketplace WonderFi has closed its $30 million acquisition of Canadian crypto platform Coinberry. It began trading on the Toronto Stock Exchange last week. The deal was approved by Competition Bureau Canada and other regulators.

Celsius Pays Back Some Debt…

Embattled crypto lender Celsius has reportedly started paying back the money it owed to its lenders, perhaps in an attempt to gain back its collateral. To begin with, it has closed $223 million of loans with Maker to free up $450 million in collateral. Meanwhile, it has also reduced its debt to Aave and Compound from $258 million to $235 million.

…But Crisis Continues

Yet, Celsius has laid off some 150 employees this week. Furthermore, Jason Store, a former investment manager at Celsius, whose firm KeyFi was acquired by Celsius, has sued the crypto lender for running a “Ponzi scheme.” Stone alleges Celsius inflated the price of its digital coin, did not hedge risks, and engaged in fraudulent activities through which Celsius CEO Alex Mashinsky was “able to enrich himself considerably.”

eToro Ends Plans To Go Public

Crypto trading platform eToro has terminated its plans to go public through a merger with Special Purpose Acquisition Company (SPAC) Fintech Acquisition Corp. V. The companies said that the closing conditions agreed upon when the merger was proposed back in March last year had not been met due to the current market downtrend, rendering the deal impractical.

Reddit Launches “Collectible Avatar”

Reddit has launched a “Collectible Avatar” marketplace that enables digital artists to sell their artwork as profile pictures and allows users to buy these NFTs for a fixed price using their credit and debit cards. The platform that runs on Polygon gives the buyers rights to use the art – on or off Reddit. Reddit users can store these avatars on Reddit’s Vault blockchain wallet.

Polygon Brings Web3 to Phones

Ethereum scaling platform Polygon has partnered with startup Nothing to bring web3 to smartphones. Nothing aims to offer Polygon NFTs on its upcoming Nothing Phone (1). This project, named “Nothing Community Dots,” also includes airdropping tokens, which will unlock various perks to the Nothing community.

Bitcoin Short ETF Grows 306% In a Week

ProShares Bitcoin Short ETF (BITI), a fund where investors make money when the price of bitcoin drops, grew by 306% last week. BITI now has an exposure equivalent to 3,811 bitcoin, up from 937 bitcoin on June 27.

Markets Turn Green

After a few bad weeks, this week is turning out to be a relief for the crypto investors. Bitcoin was up over 10% from last week and was worth $21,620.94 at the time of writing. Similarly, Ether was up over 19% from a week back and was cruising at $1,219.17 while this newsletter was being penned. Meanwhile, several altcoins, Solana, Polkadot, and Dogecoin, also saw significant gains this week. 

ENS Registrations Spike

The registrations for domains on Ethereum Name Service (ENS) saw a significant spike earlier this week. In the last week, over 108,000 ENS domains were registered with over 64,000 .eth names created on Sunday and Monday, all of which accounted for a 216% increase.

Ethereum One More Step Closer to the Merge

Another Ethereum test network, Sepolia, moved to proof of stake consensus this week. Ethereum testnet Sepolia today moved over to proof of stake. As of now, the merge has been tested on two public testnets, Ropsten and Sepolia. Once the test on the Goerli testnet is complete, it would be time for the Ethereum mainnet to switch, thereby completing the transition.

Bitstamp Cancels Inactivity Fees

Crypto exchange Bitstamp said it had made a “hard decision” to levy a monthly penalty on inactive users with small balances. But the backlash that followed has made Bitstamp retract its decision and scrap the idea.

Core Scientific Sold Bitcoins

Crypto miner and data center provider Core Scientific sold 7,202 self mined bitcoins worth close to $167 million last month. The company said the money would be used to cover operating expenses, fuel growth, reduce debt, and maintain liquidity.

Crema Hacked, Hacker Returns Loot

Over the weekend, Solana based liquidity platform Crema Finance suffered a flash loan attack with the hacker stealing over $9 million worth of crypto. But the attacker has returned over $8 million in Ether and Solana tokens while keeping close to $1.68 million as a “white hat” bounty.

Bitmark Raises Fund for Interoperable NFT Wallet

Web3 startup Bitmark has raised $5.6 million following its Autonomy NFT wallet launch. It plans to use the fund to scale its interoperable dedicated NFT wallet, which currently works with Ethereum and Tezos blockchains, to other platforms.

Boring Company To Accept Dogecoin

Elon Musk’s Boring Company had added dogecoin as an option for the customers to pay for rides on Loop, its Las Vegas transit system. This payment method surfaced as the Boring Company opened its first Loop station outside the Las Vegas Convention Center.

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