As several crypto firms reported declining revenue in the second quarter of 2022, a growing number of traders are facing the ripple effect of the collapse spreading from the crypto industry to mainstream businesses , prompting regulators around the world to take action.
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This week, US Senators Debbie Stabenow and John Boozman proposed the Stabenow-Boozman bill, which seeks to give the Commodities Futures Trading Commission (CFTC) primary responsibility for regulating Bitcoin and Ether. At present, the crypto industry is struggling to navigate the regulatory overlaps of the CFTC – which is seen as more tolerant of crypto innovation – and the Securities and Exchange Commission (SEC ), which is known to have intended legal action against a number of crypto companies.
The SEC has thousands of full-time employees and a budget of nearly $2 billion, while the CFTC has less than 1,000 full-time employees and its budget is well under $500 million.
The proposal comes as Bitcoin’s value has more than halved this year to prices below $19,000, and a number of crypto lending/trading platforms have fought to maintain operations – or simply have suspended user transfers and withdrawals.
On the other side of the Atlantic, the Indian government is keeping a close eye on the crypto industry.
In a written response to the Rajya Sabha on Tuesday, Minister of State for Finance Pankaj Chaudhary said the Law Enforcement Directorate was probing Indian crypto exchange WazirX. The platform reportedly laundered around Rs 2,790 crore.
“In one of the cases, the investigation conducted so far revealed that an Indian crypto exchange platform, Wazirx, used by Zanmai Labs Private Limited in India was using the walled infrastructure of the exchange. BINANCE based in the Cayman Islands. Furthermore, it was found that all crypto transactions between these two exchanges were not even recorded on the blockchains and were therefore shrouded in mystery,” he said, according to PTI.
The Enforcement Directorate also froze ₹64.67 crore in WazirX’s bank deposits. WazirX released a statement today indicating that what the regulator’s actions would be, its deposits and withdrawals were proceeding as usual. The exchange also offers its options.
Saylor is no longer CEO
American company MicroStrategy is known for its business intelligence services, but those in the crypto world would more likely call it a “whale,” referring to high profile cryptocurrency buyers whose movements can greatly influence the market. At last count, MicroStrategy had approximately 129,699 BTC.
This week, however, MicroStrategy co-founder and billionaire Michael Saylor announced he was stepping down from his role as CEO and taking on a role as executive chairman instead, so he could contain himself on acquiring more than cryptocurrency. Mr. Saylor has been the company’s CEO for more than 30 years.
MicroStrategy’s stock is up 14.56% in the past five days, its highest level since early May.
Still, that didn’t change the company’s second-quarter results, which showed Bitcoin’s losses also hit the balance sheet hard. Total revenue for the quarter fell to $122.1 million and net loss was over $1 billion.
“Net loss for the second quarter of 2022 was $1.062 billion, or $94.01 per share on a reduced basis, compared to $299.3 million, or $30.71 per share on a reduced basis , for the second quarter of 2021,” the company’s official statement reads. tuesday.
In other news, Jack Dorsey’s Block, which has been pushing for mass crypto adoption, is also taking steps to address the current state of the crypto economy. The company is slowing its hiring and also plans to cut its hiring target by $250 million.
Block shares are up 22.49% in the past five days.
Two strikes in one week
This week has been painful for many crypto traders investing in Solana, the ninth largest blockchain by market capitalization. On Tuesday and Wednesday, around 8,000 wallets were hacked and their crypto funds quickly depleted. A number of ecosystem members have sprung into action to investigate the cause of the hack, and evidence has shown that the proven vulnerability may be Solana’s Slope digital wallet.
“We feel the pain of the community and we were not immune. Many of the wallets of our own employees and founders have been depleted,” said the official Slope Wallet statement released on Thursday.
He added that the team was working with developers, security and protocol experts in the ecosystem to “identify and rectify”. The Slope Wallet team confirmed that while they have some guesses regarding the exploit, they don’t yet have “firm” answers.
This latest incident shows how merchants and new users often pay the highest price when it comes to decentralized blockchain projects, whose founders are not accountable to investors during such crises.
The Solana traders weren’t the only ones out of luck. The Nomad crypto bridge, which helps divert crypto assets between blockchains, was also used this week. The hackers took more than $190 million on Tuesday, but then returned around $9 million.
Crypto bridges are a common target for hackers, with the Ronin Bridge hack resulting in the theft of around $600 million earlier this year. It is one of the biggest crypto hacks ever recorded.
As “hackers” report security vulnerabilities or attempt to take funds in order to draw attention to project vulnerabilities, analytics platforms have also revealed that North Korean hackers resort to cryptographic exploits to evade sanctions.