Litecoin delisted

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LTC’s Privacy Woes

Rejections are back to the crypto world. South Korea’s Bithumb and Upbit are delisting Litecoin (LTC). A privacy update on the network has made South Korean crypto exchanges suspicious. This is in direct conflict with the country’s anti-money laundering policies. So, the crypto is getting booted out.

What just happened?Crypto focuses on privacy. Transactions are ‌anonymous. But law enforcement agencies don’t like anonymity because it’s tough to track offenders. With Litecoin, the delisting happened because:

• Its Mimblewimble Extension update provides transaction privacy. Here, users can transact while concealing all their details.

• LTC adding ‘anonymous transmission technology’ to its network concerns Upbit.

• Exchanges want a transparent digital asset market. Privacy-focussed crypto offerings want ‘true’ financial security.

Déjà vu This is not the first time that an exchange has barred a crypto asset. In 2021, Bittrex delisted Monero, Dash, and Zcash. Kraken barred trading in Monero too. All because these were crypto assets under the ‘privacy coin’ category.

A report pointed out that Monero enabled $2.35 billion worth of money laundering in Binance. This is because the wallet addresses of senders and receivers were fully concealed.

Now, what?For Litecoin users, there is some time to withdraw. Here:

• Bithumb is giving investors time till July 28 to withdraw their Litecoin from the exchange fully. Deposits stopped on June 8.

• Upbit will shut off Litecoin on June 20. Investors will have to withdraw their Litecoin by July 20.

Stable Needs Stability

The Terra-LUNA crash hasn’t been forgotten. Especially by the global regulators. New York’s Department of Financial Services wants to ensure that the last crisis was the last one.

Show me the reservesThe very nature of stablecoins is that actual reserves such as the US dollar back them. But the regulators want to be doubly sure.

• Stablecoins to be fully backed by something measurable. These can include government bonds or cash deposits.

• These crypto-assets need to be redeemable to investors within two days.

• If a 1:1 exchange against the US dollar is promised, it needs to be fulfilled.

• Merely claiming to have reserves isn’t enough. Stablecoin issuers will need to be audited once a month.

What’s the fear?More than $45 billion was wiped off the crypto market when the Terra network crashed. Luna’s market value plummeted. TerraUSD, which was always equal to $1, dropped well below the mark.

The situation alarmed financial watchdogs globally. South Korea is already investigating Terra.

Talking of reserves, Japan has also passed a stablecoin bill that requires stablecoins to be backed by the yen.

Optimism Is Gloomy

Optimism is hit, again. A governance-token launch by the Ethereum scaling solution morphed into a massive token heist. Thanks to a wrong address, the hacker stole 20 million OP tokens worth $15 million.

Lots of dramaAn incorrect address led to big chaos. Here’s what happened:

• DAOs, or blockchain-based collectives, use their native tokens for governance and decision making

• Crypto market maker Wintermute was hired for the airdrop. Presently, the tokens are worth $35 million.

• To test, Optimism transferred 20 million tokens to Wintermute’s layer-1 Ethereum address. But this L-1 address wasn’t synced with Optimism’s L-2 address. Hence, these tokens were left floating on the chain.

• Wintermute said that these funds could not be stolen.

• But 24 hours later, a hacker siphoned off all tokens. Selling 1 million of them, they disappeared with the remaining 19 million.

• Wintermute first offered the hacker employment in return for coming clean. Now, it has threatened to reveal the hacker’s identity.

• OP’s now down ~12%, trading well below $1.

Troubling timesOptimism is facing a lot of troubles already. Thanks to a botched airdrop, its OP crashed immediately on June 1. Recipients seemed to have sold off their tokens in a hurry. And now, this theft is adding to the woes.

It’s An Equity Party

Stocks have turned volatile. But MF investors don’t care. MF schemes that invest in stocks saw an increase in investments for May. Debt funds that invest in bond markets shrunk.

Stocks are inInvestors want to hold equities for the long term. That’s why:

• Equity MFs received net inflows of ~Rs 18,529 crore for May. Net inflows mean more people are investing, rather than redeeming.

• Flexicap funds got ~Rs 2,938 crore worth of investments. These MF funds invest in small and large companies listed on D-Street.

Bonds are outRBI had hiked repo rates to 4.40% in May. That meant prices of bonds or government-backed papers fell. That’s why:

• Debt schemes saw a net outflow of ~Rs 32,722 crore in May. Net outflows mean that more people are selling their MF.

• Bonds are not an attractive option with interest rates rising.

Despite market fluctuations, MF investors want to stick to stocks for now.

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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.