Did Do Kwon play dirty?

Good morning! Welcome to The Daily Moon. Heard of scream therapy? It’s now a thing, thanks to the Bitcoin crash. In a Telegram group called ‘Bear Market Screaming Therapy’, crypto investors post voice notes of themselves screaming. Just that. Posting anything else causes an instant ban.  

Did Terra Crash Luna?

Did Terra founder Do Kwon play dirty? An Uppsala Security and CoinDesk Korea investigation claims that the wallet behind TerraUSD losing its dollar was allegedly managed by Terraform Labs itself. The Terra-LUNA crash wiped off over $60 million of investor wealth. 

Faking a crash?The analysis claimed that one particular wallet, Wallet A, was responsible for the TerraUSD de-peg. Here’s what happened:

1. The wallet was created on May 7, the day of the TerraUSD de-peg.

2. Terraform Labs withdrew 150 million TerraUSD from the blockchain. 

3. Wallet A sold 85 million TerraUSD to buy Circle’s USDC.

4. A sudden dump happened and TerraUSD lost its 1:1 US dollar peg.

A forensic analysis reported that Wallet A was the alleged attacker's wallet. That’s because Wallet A transacted with LUNC DAO’s wallet. LUNC DAO is a validator of Terra 2.0 that was created after the collapse of Terra.  

Not convincedOthers don’t buy the claims. Terra whistleblower Fatman has called it nonsense. He said that the wallet doesn’t belong to LUNC DAO, but is KuCoin’s hot wallet. These are crypto wallets that are connected to the internet 24/7, 365 days. 

And here comes the SECKwon has new controversies to handle. The SEC has launched an inquiry into insider trading at crypto exchanges. This decision resulted from the Terra-Luna crash. The SEC wants to know how crypto exchanges protect their customers against malpractices by insiders. 

Staked ETH Disaster

The crypto selloff has a new victim. Staked Ethereum (stETH), a derivative of Ethereum, is seeing a price decline following a new wave of redemptions. Crypto investors are now selling Lido Finance’s derivative.

FYIStaking means locking-in crypto assets for some time to earn gains. Through stETH, users can maintain liquidity and continue to trade. 

Liquidity crunch  DeFi platform Lido Finance provides its users capital ‌for staked assets. Lido leads with one-third of Ether deposits staked. So far, staked Ethereum has mirrored Ethereum in a 1:1 price ratio. But the Celsius withdrawal freeze led to stETH redemptions. So much so that the derivative crypto’s price is ~6% lower than Ethereum. 

Now what?Celsius holds 409,260 Staked Ethereum worth $470 million. It will be forced to dump the token if the bear market continues. 

There are other crypto firms in sell mode. Crypto fund Three Arrows which is facing bankruptcy threats has dumped $33 million worth of Staked Ethereum. FTX’s Sam Bankman-Fried has also sold tokens worth $88 million. Staked Ethereum’s market cap has dropped ~10% to $3.4 billion in the past 24 hours. 

Binance Has Jobs

Changpeng Zhao isn’t too worried about the crypto winter. When Coinbase, Crypto.com, Gemini, and BlockFi are laying off people, Binance is hiring. There are 2,000 open positions, said Binance CEO Zhao. 

But, how?Zhao seemed to indicate that Binance had been conservative about its spending when others splurged. 

Earlier, the Binance CEO had spoken about making ‘full use’ of the crypto winter. That included adding more jobs. He seems to be keeping his promise. 

Downslide for the restIn November 2021, Crypto.com spent $700 million for naming rights for the basketball team Los Angeles Lakers’ home arena. Now, it is cutting 260 jobs.

Similarly, Coinbase inked a deal with the NBA for an undisclosed amount in October 2021. Now, it will sack 1,100 people. Gemini has asked 10% of its employees to leave. BlockFi is removing 20% of its staff. Latin American exchanges Mercado Bitcoin, Buenbit, and Bitso are shrinking their workforce too. 

Nasdaq Factors Hikes?

Amidst fears of a steep rate hike by the US Fed, technology-heavy Nasdaq saw marginal gains. Nasdaq Composite Index rose 0.18% ahead of the Fed meeting. 

The big hikeThe central bank is expected to hike interest rates by almost 0.75%. March inflation jumped to 8.5% in the US. The Fed has indicated that it’ll do what it takes to bring prices down. Wall Street is factoring in a 0.75% hike. That's probably why stocks aren’t seeing sudden movements. 

Tech factors Google-parent Alphabet shrugged off its losing streak on Tuesday. Its stock is heading towards a 20-1 split. Meanwhile, Oracle rose 10.4% after posting a 36% rise in revenue. 

Nasdaq 100 Futures also rose ~1%. There seems to be a small silver lining on the horizon. 

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Who are we? There is a lot happening in our world. Everything has layers, and each layer has to be carefully peeled so you, the reader, know how the world of money is changing every day. That’s our promise. Help you unpeel the onions, which are the public markets in the US, India, and crypto, so that you know just a little more.