Luna and TerraUSD Cryptocurrency Crash. This Week’s Top Bitcoin and Crypto News
Two linked cryptocurrencies collapsed and lots of republic lost money. Coinbase said investors who use its platform remarkable lose their crypto if the company ever went bankrupt. And the whole crypto complex had a week on the skids. Here’s what happened in crypto last week:
Luna cryptocurrency and terraUSD stablecoin collapse
A week ago, the luna cryptocurrency traded at $80 a coin. Now it’s well-behaved less than a penny. The terraUSD stablecoin, which is planned to be worth a dollar at all times, is now well-behaved about a quarter.
Luna and terraUSD are linked on the terra blockchain, and the idea was that the luna cryptocurrency would stabilize the terraUSD if the stablecoin’s value was ever in peril of wavering from the dollar mark.
The method didn’t work, and many republic who owned luna and terraUSD lost most of their investment. A subreddit for the community quickly filled with ominous comments.
The crashed of terraUSD came up when Treasury Secretary Janet Yellen appeared afore lawmakers on Thursday to speak on cryptocurrency risks. “They’re growing very rapidly,” Yellen said throughout stablecoins. “They present the same kind of risks that we have famed for centuries in connection with bank runs.”
The US hasn’t enacted federal stablecoin rule, but a number of federal agencies are looking into cryptocurrency laws, per an executive order issued by President Joe Biden in March.
Read CNET’s full story on the luna cryptocurrency shatter here
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New Coinbase disclosure says users’ cryptocurrency held by the exchange could be at risk if Coinbase ever goes bankrupt
Coinbase, the large US crypto exchange, disclosed in its earnings on Tuesday that any coins that users detain on its platform could be gone if the commerce goes bankrupt. Not reassuring for many folks.
The disclosure, made in the “Risk Factors” section of the quarterly picture, says that “because custodially held crypto assets may be studied to be the property of a bankruptcy estate, in the store of a bankruptcy, the crypto assets we hold in custody on aimed at of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors.”
That’s legalese for, Your coins could be used to pay off Coinbase’s latest debt obligations if the company went under.
The reaction prompted CEO Brian Armstrong to tweet that the disclosure was made easily to comply with an SEC requirement. Coinbase, he says, isn’t at risk of bankruptcy.
Read CNET’s full story on Coinbase’s new risk disclosure here
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The cryptocurrency market dropped more than $200B in 24 hours
In a 24-hour window spanning Wednesday to Thursday, the total cryptocurrency market cap dropped more than $200 billion, according to data from price-tracking site CoinMarketCap.
Bitcoin and ether, the two largest cryptocurrencies by market cap, are both commerce at least 15% lower than seven days ago. The one-day wipeout comes once weeks of sagging cryptocurrency prices. Bitcoin has lost more than half its value valid its high point in November.
Read CNET’s full story on crypto markets plunging more than $200 billion in a day here
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Thanks for reading. We’ll be back with plenty more next week. In the meantime, check out this story by Bree Fowler examining the danger of ransomware on the one-year anniversary of the Colonial Pipeline cyberattack.
