Terra tokens declared securities; BUSD market cap down 15%

On Feb 17, 2023

The biggest news in the cryptoverse for Feb. 17 saw Terra-related tokens lose part of their value as the U.S. SEC declared them to be securities. Meanwhile, Binance saw the market cap of its BUSD stablecoin decline and denied rumors that it would delist assets other assets, such as USDC.

CryptoSlate Top Stories

Terra-related tokens dump as SEC labels them securities

Terra-related tokens lost an average of 5% in the last 24 hours following the U.S. Securities and Exchange Commission’s (SEC) charges against Terraform Labs and Do Kwon, according to CryptoSlate’s data.

In the Feb. 16 complaint, the SEC alleged that Terra’s failed algorithmic stablecoin TerrraUSD (USTC), LUNC — formerly Terra Luna — and Wrapped LUNA Classic (WLUNC) were securities under U.S. securities laws.

The financial regulator further argued that Terraform Labs breached securities law with the Mirror Protocol (MIR) launch. MIR allowed users to create mAssets, constituting a security-based swap, according to the SEC.

The SEC added that the wrapped version of Luna was also security: “wLUNA is also a security because it is a receipt for a security.”

Do Kwon allegedly cashed out 100M worth of BTC via Swiss Bank

The U.S. Securities and Exchange Commission (SEC) alleged that Terraform Labs and its founder Do Kwon transferred over 10,000 BTC to a cold wallet and cashed out about $100 million via a Swiss Bank.

The regulator filed a complaint on Feb. 16 alleging that the accused offered unregistered securities and operated a fraudulent scheme.

Further analysis of the SEC filing revealed that Do Kwon and Terraform Labs transferred over 10,000 BTC into a cold wallet, and subsequently converted some of the assets to cash.

CZ: ‘Landscape is shifting,’ following 15% drop in BUSD market cap

Binance CEO Changpeng Zhao (CZ) said the “landscape is shifting,’ concerning stablecoin movements triggered by recent regulatory pressures.

The Binance CEO tweeted details of changes in the valuations of the top three stablecoins. He said BUSD’s market cap had fallen by almost $2.5 billion to $13.7 billion — a 15% decrease, sinking to a 14-month low.

USDC’s market cap also declined — albeit to a lesser extent — falling 1.7% to $41.5 billion.

Tether is the winner in all this, recording a 3.5% increase in market cap to $70.1 billion — posting a 15-month high in the process.

CZ denies claims that Binance will delist US-based projects

Binance CEO Changpeng “CZ” Zhao, on Feb. 17, described reports that his firm was considering delisting U.S-based crypto projects as “false.”

Bloomberg reported Feb. 17 that Binance was reconsidering its relationships with its US business partners, citing a person familiar with the matter, because of the current issues with its partners in the country.

The report added that the CZ-led exchange could delist Circle’s USD Coin (USDC) stablecoin, and the firm was reassessing its venture-capital investments in the US.

Meanwhile, CZ said:“We pulled back on some potential investments, or bids on bankrupt companies in the US for now. Seek permission first.”

Two traders made over $200k from Binance’s Gain Network listing

Blockchain investigator Lookonchain identified two crypto addresses that cumulatively made over $200,000 from Gains Network’s GNS token sales after it was listed on Binance.

Lookonchain said the first address bought 26,881 GNS tokens on 1Inch swap for $208,335 and sold it for a profit of $106,747 within a few hours after it was listed on Binance.

Another wallet accumulated $500,000 worth of GNS at an average price of $7.38. The wallet had started buying on Feb. 8 and had purchased more tokens 20 minutes before Binance’s announcement.

Gemini will be qualified custodian under proposed SEC rules

Crypto exchange Gemini would be considered a qualified custodian if the Securities and Exchange Commission’s (SEC) proposed expansion becomes official, according to Gemini co-founder Tyler Winklevoss.

Winklevoss published a thread on his Twitter account and said: “Gemini Trust Company, LLC, is a New York trust company and has been a fiduciary and qualified custodian under the New York Banking Law since 2015. This will continue to be the case under any new SEC rule that comes into effect.”

FTX warns against Justin Sun-backed FUD tokens

Bankrupt crypto exchange FTX has warned its creditors against patronizing unauthorized debt tokens, including the Justin Sun-backed FTX User Debt Token (FUD).

FUD is a debt token issued by Debt DAO with a claim of issuing FTX users’ debt as a bond token. At launch, about 20 million FUD was minted, with plans underway to mint additional tokens as soon as FTX confirmed the debt amount.

FTX tweeted on Feb. 17 to disassociate itself from the project and warned creditors against dealing with such unauthorized schemes.

BlockFi files to dismiss SBF’s Emergent company bankruptcy case

Bankrupt crypto lender BlockFi has asked the court to dismiss a bankruptcy case filed by Sam Bankman-Fried’s (SBF) Emergent Technology company over a tussle to control 55 million Robinhood shares.

Disgraced FTX founder SBF owned 90% of shares in Emergent Technology — a company he co-founded with Gary Wang solely to purchase Robinhood shares.

NBA hall of famer Paul Pierce to pay SEC $1.4M for undisclosed promotion of EMAX

Former NBA player Paul Pierce agreed to pay $1.409 million to the U.S. Securities and Exchange Commission (SEC) as penalties for his undisclosed promotion of the unregistered securities token EthereumMax (EMAX), according to a Feb. 17 statement.

The SEC said the NBA star received over $244,000 worth of EMAX tokens to promote the tokens on Twitter. The financial regulator added that the NBA star made false and misleading promotional statements about the crypto asset.

‘Communist Bitcoiners’ exposed by Ordinals as control freaks

Peter McCormack was frank in calling out the “Communist Bitcoiners” for their adverse reaction to Ordinals.

The What Bitcoin Did Podcast host said the best thing about Ordinals is how it “p*sses off” the Bitcoin zealots. He said the fallout uncovered those who seek absolute control and hate anyone making money.

Research Highlight

Research: Public Bitcoin Miners in better financial health despite 12.1% YoY drop in BTC holdings

Glassnode data analyzed by CryptoSlate shows that Bitcoin miners are beginning to enjoy some respite in the current year after struggling in 2022.

As of Jan. 2022, Bitcoin miners held 36,003 BTC, with mining firms like Core Scientific, Riot, Hut8, Marathon, and Bitfarms holding over 30,000 coins.

However, the landscape appears to have changed in the current year as Hut 8, Marathon, and Riot are now the dominant miners, holding 87% — 27,760 BTC — of the miners’ BTC holdings, according to CryptoSlate’s research.

Bitfarms and Core Scientific fell off as they struggled in 2022 — the latter filed for bankruptcy while the former dealt with debt obligations.