Crypto Biz: Crypto was in full swing at Collision Conference, June 17-23

Despite the bear market in Bitcoin and altcoins, the industry's builders continue to build for a brighter future.

For all the gloom and doom in the cryptocurrency market these days, our industry continues to make inroads into mainstream tech. This week, I had the pleasure of attending the sold-out Collision Conference in Toronto, and crypto was featured prominently. During the event, I got to moderate three panels, including two that were crypto-focused. The fact that the biggest tech conference in North America is letting me talk cryptocurrency after a six-month bloodbath proves there’s more to the industry than just price. And, I’m not saying the price isn’t important — but context is everything.

My Collision panel on decentralized social media included Stani Kulechov, founder and CEO of Aave and Lens Protocol. 

This week’s Crypto Biz gives you a taste of Collision Conference 2022 and also draws your attention to the latest funding and business news from the world of blockchain.

Institutions are exploring the space — KPMG Canada crypto team

During Collision, I sat down with KPMG Canada’s crypto team to talk about the firm’s recent foray into digital assets. If you recall, I got really excited in February when the KPMG Canada announced it had added Bitcoin (BTC) and Ether (ETH) to its corporate treasury. The firm’s decision to adopt digital assets didn’t come on a whim — it was directed by an internal governance council that did its due diligence before recommending crypto treasuries. The Canadian arm of the Big Four accounting firm remains bullish despite recent market turmoil.

Voyager enters into $500M loan agreement with Alameda amid 3AC exposure

I reported last week that crypto-focused hedge fund Three Arrows Capital (3AC) was inching closer to insolvency after a series of leveraged bets turned sour. We knew there would be contagion risk — we just didn’t know how much. Well, this week, trading platform Voyager Digital took out a loan from Alamada Research to cover losses tied to its exposure to 3AC. Specifically, Voyager borrowed 15,000 BTC from Alameda, which is roughly equivalent to the 15,250 BTC owed to it by 3AC. Voyager has requested that 3AC repay its outstanding debts by Monday, or else it’ll pursue legal action.

Crypto brokerage FalconX raises $150M at $8B valuation

Crypto has gifted us with a lot of nasty headlines over the past six months. But, during that time, billions of dollars in venture capital were pouring into the industry. This week, crypto brokerage FalconX announced it had raised $150 million at a valuation of $8 billion in a Series D round that was led by Singapore sovereign wealth fund GIC. The company’s valuation has basically doubled from August when it concluded its Series C funding round. As is always the case, when everyone seems to be panicking, smart money investors are busy accumulating.

Meta set to begin testing NFTs on Instagram Stories with Spark AR

Zuckerberg’s Meta, which is the parent company of Facebook and Instagram, announced that it’ll begin testing nonfungible tokens (NFTs) on Instagram Stories using Spark AR Studio. “We’re expanding our test so more creators around the world can display their NFTs on Instagram,” the CEO said. “Creators and collectors will be able to share their digital collectibles across Facebook and Instagram after we begin rolling out the feature on Facebook with select US creators at a later date.” Social media is about to undergo a major transformation. We’ll see whether Zuckerberg’s company will maintain its dominance during the transition to Web3 and the Metaverse.

Before you go! Is Bitcoin ready for a recession?

I wasn’t able to attend this week’s Market Report, but my colleagues Benton Yuan, Marcel Pechman and Yashu Gola were able to carry on without me. In addition to giving you the latest trading insights, they discussed Bitcoin’s prospects in the event of a global recession. You can watch the full replay below.

Crypto Biz is your weekly pulse of the business behind blockchain and crypto delivered directly to your inbox every Thursday.

Gensler appeals for ‘one rule book’ in negotiations with CFTC over crypto regulation

Gensler appeals for ‘one rule book’ in negotiations with CFTC over crypto regulation

In an interview with The Financial Times, SEC chair Gary Gensler said he is working on a memorandum of understanding with the agency’s digital asset market co-regulator.

United States Securities and Exchange Commission (SEC) chair Gary Gensler is in talks with Commodity Futures Trading Commission (CFTC) officials on a “memorandum of understanding” on the regulation of digital assets. Together, the agencies can assure market integrity, Gensler told The Financial Times in an interview published Thursday. “I’m talking about one rule book on the exchange that protects all trading regardless of the pair — [be it] a security token versus security token, security token versus commodity token, commodity token versus commodity token,” Gensler told the newspaper. 

Gensler’s desire to be collaborative comes as a variety of legislative initiatives have been introduced to create a more comprehensive regulatory framework for digital assets. The Digital Commodity Exchange Act, introduced in its latest form in April, and the Responsible Financial Innovation Act, introduced in June, both gave the CFTC greater authority over the market.

Debbie Stabenow, chairman of the Senate Agriculture Committee, which has oversight of the CFTC, and the committee’s ranking member John Boozman are reportedly also drafting a crypto regulation bill, which is expected to expand CFTC powers. Gensler, who headed the CFTC from 2009 to 2013, has expressed skepticism about changes in the status quo.

The SEC has taken the lead in crypto regulation so far, but frequently to the dissatisfaction of the industry and lawmakers who are critical of its methods of allegedly regulating through enforcement. Crypto industry leaders have explicitly asked for clearer regulation, and SEC commissioner Hester Peirce has pressed for policy changes from within the commission.

Related: Bringing crypto market 'into the light' doesn’t address enforcement: CFTC chair

Regulation is not a question of authority alone. The Financial Times cites blockchain analytics company Elliptic as saying U.S. regulators have collected $3.35 billion through enforcement actions in the crypto industry over the years, with over 70% of that sum going to the SEC.

Finance Redefined: Uniswap goes against the bearish trends, overtakes Ethereum

Finance Redefined: Uniswap goes against the bearish trends, overtakes Ethereum

The top 100 DeFi tokens showed signs of recovery after last week’s mayhem, and many of the these tokens registered double-digit gains.

This past week, the decentralized finance (DeFi) ecosystem tried gaining some momentum amid the bear market crash. Uniswap saw a trend reversal and overtook Ethereum regarding network fees paid. However, not all DeFi protocols were as lucky, as Bancor had to pause its “impermanent loss protection” in the wake of a hostile market.

DappRadar’s report shows that the GameFi ecosystem continues to thrive despite the current downturn in the market. Solend invalidates Solana whale wallet takeover plan with second governance vote.

The top 100 DeFi tokens showed signs of recovery after last week’s mayhem, and several of the tokens registered double-digit gains.

DeFi Summer 3.0? Uniswap overtakes Ethereum on fees, DeFi outperforms

Decentralized exchange (DEX) Uniswap has overtaken its host blockchain Ethereum in terms of fees paid over a seven-day rolling average.

The surge appears part of a recent spate of high demand for DeFi amid the current bear market. Decentralized finance (DeFi) platforms such as Aave and Synthetix have seen surges in fees paid over the past seven days, while their native tokens and others such as Compound (COMP) have also boomed in price.

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GameFi continues to grow despite crypto winter: DappRadar report

Blockchain games were the subject of the latest DappRadar x BGA Games Report #5, published Tuesday. The report looked at healthy ecosystems and investments in GameFi and metaverse markets.

The report covered several projects in detail, outlining their continued success and growth. Splinterlands, Illuvium, Galaverse and STEPN have continued bringing new players to their platforms, gaining financial interest and expanding their businesses.

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Bancor pauses impermanent loss protection citing ‘hostile’ market conditions

Bancor, a DeFi protocol often credited as the pioneer of the DeFi space, paused its impermanent loss protection (ILP) function on Sunday, citing “hostile” market conditions.

In a blog post on Monday, the DeFi protocol noted that the ILP pause is a temporary measure to protect the protocol and the users. When a user gives liquidity to a liquidity pool, the ratio of their deposited assets changes at a later moment, potentially leaving investors with more of the lower value token, this is known as impermanent loss.

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Solend invalidates Solana whale wallet takeover plan with second governance vote

Solana-based DeFi lending protocol Solend has created another governance vote to invalidate the recently-approved proposal that gave Solend Labs “emergency powers” to access a whale’s wallet to avoid liquidation.

On Sunday, the crypto lending platform launched a governance vote titled “SLND1: Mitigate Risk From Whale.” It allowed Solend to reduce the risk the whale’s liquidation poses to the market by letting the lending platform access the whale’s wallet and letting the liquidations happen over the counter.

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DeFi market overview

Analytical data reveals that DeFi’s total value locked registered a minor recovery rising above $56 billion. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top-100 tokens by market capitalization were on the move, and many of the tokens registered double-digit gains over the past week.

The majority of the DeFi tokens in the top 100 ranking by market cap were trading in green. Synthetix (SYX) registered the biggest gain with a 90% surge over the past week, followed by Uniswap (UNI), which saw a 37% appreciation in price in the past seven days. COMP gained 31%, while Thorchain (THOR) saw a 22% rise.

Before you go!

Celsius network, the lending platform that has been in trouble over liquidations and lack of Capital, saw a community-led short squeeze of its native token, CEL. It registered a 300% jump over the past week amid market uncertainty over its future.

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space.