Friday, July 30, 2021
DeFi Mark Cuban DeFi crash, China's bitcoin mining

Mark Cuban DeFi crash, China’s bitcoin mining

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Between China’s bitcoin mining crackdown, to billionaire investor Mark Cuban’s DeFi, or decentralized finance, investment crash, a lot happened in crypto over the past week.

With the top cryptocurrencies by market value remaining in the red this morning, here are seven things worth knowing.

1. Kim Kardashian West was paid to advertise a digital coin on Instagram

2. China’s bitcoin miners are migrating

In May, Beijing called for a severe crackdown on bitcoin mining. This caused what’s being called “the great mining migration” by those in the crypto world to places like Texas.

Texas appears to be an ideal destination for miners due to its deregulated power grid and pro-crypto political environment.

“You are going to see a dramatic shift over the next few months,” Brandon Arvanaghi, previously a security engineer at crypto exchange Gemini, told CNBC. “We have governors like Greg Abbott in Texas who are promoting mining. It is going to become a real industry in the United States, which is going to be incredible.”

On Sunday, China extended its crackdown to the southwestern province of Sichuan, where many mines were reportedly shuttered. Overall, China’s actions seem to have led to a significant decline in bitcoin’s hash rate, or processing power.

Bitcoin’s price fell as low as $31,760 on Monday morning, CNBC reported, dropping below $32,000 for the first time since June 8.

3. Maxine Waters forms ‘digital assets working group’

During a house financial services hearing on central bank digital currencies (CBDCs), committee chairwoman and congresswoman Maxine Waters, D-Calif., announced the creation of a “digital assets working group.”

“As cryptocurrencies, central bank digital currencies and other digital assets enter the mainstream, the Committee will look at how digital assets have begun to enter many aspects of our lives … and consider how to devise legislation to support responsible innovation that protects consumers and investors while promoting greater financial inclusion,” Waters said on Tuesday.

Members of the working group will also work on matters related to the possible creation of a CBDC in the U.S., she said.

4. The World Bank refuses to assist El Salvador’s implementation of bitcoin as legal tender

El Salvador passed a new law to adopt bitcoin as legal tender on June 9, becoming the first country to do so. But, the World Bank will not assist El Salvador in implementing it, Reuters reported on Wednesday.

“We are committed to helping El Salvador in numerous ways, including for currency transparency and regulatory processes,” a World Bank spokesperson told Reuters. “While the government did approach us for assistance on bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings.”

Earlier on Wednesday, the finance minister of El Salvador, Alejandro Zelaya, said the country did seek technical assistance from the World Bank.

5. Mark Cuban calls for regulation after his DeFi token investment crashed

Mark Cuban revealed on Wednesday evening that he was trading a DeFi, or decentralized finance, token from Iron Finance called titan that ended up crashing to zero in one day.

“I got hit like everyone else,” Cuban, owner of the Dallas Mavericks and an investor on ABC’s “Shark Tank,” tweeted on Wednesday.

At first, some in the crypto world speculated that this was the result of a rug pull, which is a type of scam where developers abandon a project and leave with investors’ funds. Iron Finance denied those claims, writing in a blog post that the crash was due to a “bank run,” or panic selling, and the token’s algorithmic code.

Nonetheless, after this experience, Cuban called for more regulation within the space.

“[I]f you are looking for a lesson learned, the real question is the regulatory one,” Cuban told Bloomberg on Thursday. “There should be regulation to define what a stable coin is and what collateralization is acceptable.” 

6. Goldman Sachs ramps up bitcoin trading

7. MicroStrategy now owns over 100,000 bitcoins worth around $3 billion

Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”

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