Gary Gensler, the chair of SEC, writes in an op-ed: We can dispense with the idea that crypto lending isn't subject to regulation. On the contrary, the rules have been around for decades. The platforms aren't following them. Noncompliance isn't the inevitable result of the crypto business model or underlying crypto technology. Rather, it is as if these platforms are saying they have a choice -- or even worse, saying "Catch us if you can." As I said in a speech last year, "Make no mistake: If a lending platform is offering securities, it ... falls into SEC jurisdiction." On many occasions, the commission and state regulators have addressed how the relevant case law implicates crypto assets, including crypto lending.

There are costs of complying with securities laws, just as there are costs to car makers of adding seat belts. Platforms that offer crypto lending need to comply anyway, not merely because that's the law, but also because it helps protect investors and increase trust in our markets. Fortunately, there is a path forward. I encourage platforms offering crypto lending to come in and talk to SEC staff. Getting these platforms into compliance with the securities laws will benefit investors and the crypto market. In the meantime, the SEC will serve as the cop on the beat. As with seat belts in cars, we need to ensure that investor protections come standard in the crypto market.

Matt Damon's pitch to invest in crypto has disappeared from US television sets. Same goes for glitzy commercials starring LeBron James and Tom Brady. From a report: The drop in national TV marketing by the industry in the US has coincided with the selloff in Bitcoin and other crypto assets, according to the TV-ad measurement company ISpot.tv, which tracks the spots. Damon's commercial for Crypto.com, which ends with him uttering "fortune favors the brave," last aired in February during the Super Bowl. The four-month national campaign cost an estimated $65 million, according to ISpot, exceeding the outlays by others in investment services, including giants such as Fidelity and Vanguard, over the same stretch.

"Ad sellers shouldn't expect growth in this vertical the remainder of the year due to the crash in crypto valuations and emerging allegations of fraud among companies in the crypto market," said Eric Haggstrom, director of business intelligence at Advertiser Perceptions, an industry researcher. "Crypto has been a boom and bust industry since its inception, and advertising budgets will follow the same trajectory." Spending by major crypto firms, including the trading platforms Crypto.com, Coinbase and FTX, fell to $36,000 in July in the US, according to ISpot. That's the lowest monthly total since January 2021 and is down from a high of $84.5 million in February, when the industry flooded the airwaves around the Super Bowl.

An anonymous reader shares a report:Back in November 2021, cryptocurrencies, which saw a huge surge during most of the pandemic, suddenly began to nosedive. Joe Hovde, a New York-based data scientist, decided that this might be his moment to buy into crypto: He took a risk on the price plunge and bought some Ethereum, the next most popular crypto asset after Bitcoin, on Coinbase, a crypto exchange. A couple of months later, Hovde started getting emails from Coinbase notifying him of swings in the prices of Ethereum, Bitcoin, and other tokens. Though already a steady consumer of financial news and current events, Hovde used the notifications to passively keep tabs on his investment while juggling other things. So when crypto assets began to take another nosedive in April 2022, Hovde noticed that at some point, the emails seemed to have stopped coming.

Hovde, who has worked on projects culling trends and patterns from large data sets for both tech companies and media outlets, scraped his inbox and confirmed that he'd received no emailed price notifications from the end of February to when they started back up again at the beginning of June; during that time period, Bitcoin, Ethereum, and other currencies lost dozens of percent worth of value in the thousands and tens of thousands of dollars. Coinbase's decision to stop email notifications in the middle of a dramatic cryptocurrency crash has not been previously reported. But academics who spoke to Mother Jones note that Coinbase's decision likely contributed to losses for retail crypto investors who may otherwise have sold their holdings ahead of further devaluation. The change to price updates could run afoul of federal or state consumer protection laws, they said, particularly if it hurt the wallets of any of the relatively inexperienced traders who flocked to crypto in droves during the pandemic.

Union-organizing startup "Unit of Work" received a $1.4-million pre-seed investment led by the venture capital arm of billionaire Mike Bloomberg, reports the Los Angeles Times.

The startup's outside investors "have made fortunes backing technologies such as artificial intelligence, cryptocurrencies and video games. One is among California's foremost critics of public-sector labor unions." But the head of the startup's lead investment firm says that "whenever a community has a want that's going unfilled, there's an opportunity for companies." [T]hese people used to multibillion-dollar sales and IPOs see a big opportunity in the atomized, restive condition of America's workforce and the possibility of transforming it through a new era of unionization. "We only invest in areas where we think we can get a return," said Roy Bahat, head of Bloomberg Beta, the venture arm of billionaire Mike Bloomberg's media empire.

Unit's business model works like this: The startup's organizers provide free consulting to groups of workers organizing unions within their own workplaces — helping them build support to win elections, advising them on strategy in contract-bargaining sessions, guiding them through paperwork filings and around legal obstacles. Once a contract is in place, members of the new union can decide to pay Unit a monthly fee — similar to traditional union dues — to keep providing support.... Once the company starts earning income, it plans to buy out its investors and give their equity to the unions it helped organize, effectively transitioning corporate control to the customer base.

The approach has attracted some strange bedfellows. The second investment firm in the round, Draper Associates, is led by Tim Draper, a third-generation venture capitalist, bitcoin evangelist and outspoken critic of organized labor... [H]e launched a ballot initiative to ban public-sector unions in California.... "Unit of Work is making unions decentralized," Draper wrote in an email explaining his investment. "That will be awesome. Centralized unions tend to restrain trade, and government unions create bloated bureaucracy and poor government service on the whole.... "

Despite Draper's enthusiasm for independent unions, as opposed to nationally affiliated labor organizations, Unit's leaders and its website make clear that they support their clients if they decide to affiliate with a larger union.

In preliminary second-quarter financial results announced today, Nvidia's year-over-year growth is "down from a previously forecasted $8.1 billion, a miss of $1.4 billion," reports Ars Technica. "Nvidia blamed this shortfall on weaker-than-expected demand for its gaming products, including its GeForce graphics processors." The full results won't arrive until the end of the month. From the report: Nvidia pointed to "a reduction in channel partner sales," meaning that partners like Evga, MSI, Asus, Zotac, Gigabyte, and others were selling fewer new GPUs than anticipated. This drop can be attributed partly to a crash in the value of mining-based cryptocurrencies like Bitcoin and Ethereum -- fewer miners are buying these cards, and miners looking to unload their GPUs on the secondhand market are also giving gamers a cheaper source for graphics cards. "As we expect the macroeconomic conditions affecting sell-through to continue, we took actions with our Gaming partners to adjust channel prices and inventory," said Nvidia CEO Jensen Huang. That means we may see further price drops for existing GeForce GPUs, which have already been dropping in price throughout the year. Some cards still haven't reverted to their originally advertised prices, but they're getting closer all the time.

In better news for Nvidia, the small overall increase in revenue [$6.7 billion] is driven almost exclusively by the company's data center business, including GPU-accelerated AI and machine learning applications and GPU acceleration for cloud-hosted virtual machines. Nvidia's data center revenue is projected to be up 61 percent from last year, from $2.37 billion to $3.81 billion. Nvidia will supposedly launch its next-generation RTX 4000 series GPUs later this year. Based on the new Lovelace architecture, these GPUs may appeal to some gamers who originally sat out the RTX 3000 series due to shortages and inflated prices and are now avoiding the GPUs because they know a replacement is around the corner.

An anonymous reader quotes a report from Bloomberg: Riot Blockchain earned about $9.5 million in credits last month from shutting down its Bitcoin mining rigs at a Texas facility while the region weathered a historic heat wave. The amount will be credited against the company's power usage. The value of the credit is equal to around 439 Bitcoin. Riot also mined 318 coins during the month, according to the company's monthly production and operations update.

The publicly traded miner has a 750-megawatt facility and is building another one-gigawatt site in the Lone Star State. The sites are two of the largest mining farms in the world. Nearly all industrial scale miners shut down their rigs in Texas while the state experienced a severe power crunch during the record heat wave in early July. While the power crunch sent electricity prices soaring and made Bitcoin mining operations unprofitable, some large-scale miners such as Riot were able to sell electricity purchased earlier at a lower price back to the grid with a premium.

Riot is participating in the 4 Coincident Peak program from the state power operator known as the Electric Reliability Council of Texas. Riot's 750-megawatt Whinstone Facility in Rockdale, Texas, is encouraged, though not required, to curtail consumption when called during the four summer months of peak energy demand. The company sold 275 mined coins for about $5.6 million in July. The 318 Bitcoin mined represents a decrease of 28% in production compared to the prior month, according to the update.

MicroStrategy co-founder Michael Saylor gave up his chief executive officer title and said he'll focus more on Bitcoin after the enterprise-software maker reported a loss of more than $1 billion related to the second-quarter plunge in the price of the cryptocurrency. Bloomberg reports: Saylor, who founded the Tysons Corner, Virginia-based company in 1989, will continue to serve as executive chairman as retains its Bitcoin buying strategy. MicroStrategy President Phong Le will take on the chief executive role. The company also filed with the Securities and Exchange Commission to register 450,000 shares. MicroStrategy took a $917.8 million impairment charge related to the decline in the value of the Bitcoin it holds. Bitcoin tumbled 59% in the quarter, and traded about 45% lower than the price at the end of the year-earlier period.

Revenue dropped to $122.1 million. Analysts polled by Bloomberg expected revenue of $123.25 million in the second quarter. Net quarterly loss of $1.062 billion compared with a loss of $299.3 million in the same quarter of last year. The quarterly loss is almost exactly twice the company's revenue in the last 12 months. As of June 30, the carrying value of the company's 129,699 Bitcoins was $1.988 billion, the company said, reflecting the cumulative impairment loss of $1.989 billion. The cumulative amount is now more than Bitcoin on the company's balance sheet. "MicroStrategy's original strategy and consulting business needs full-time attention," said Henry Elder, head of decentralized finance at Wave Financial. "Now Michael can focus on what he does best, promoting Bitcoin. And the company can focus on making more money to buy more Bitcoin. They are basically doubling down."

An anonymous reader quotes a report from The Guardian: For years Craig Wright has claimed that he is the mythical figure who created bitcoin. But a legal bid by the Australian computer scientist to defend his assertion that he is Satoshi Nakamoto resulted in a pyrrhic victory and a tarnished reputation on Monday. A high court judge ruled (PDF) Wright had given "deliberately false evidence" in a libel case and awarded him one pound in damages after he sued a blogger for alleging that his claim to be the elusive Nakamoto was fraudulent. "Because he [Wright] advanced a deliberately false case and put forward deliberately false evidence until days before trial, he will recover only nominal damages," wrote Justice Chamberlain.

Wright had sued blogger Peter McCormack over a series of tweets in 2019, and a video discussion broadcast on YouTube, in which McCormack said Wright was a "fraud" and is not Satoshi. The issue of Nakamoto's identity was not covered by the judge's ruling because McCormack had earlier abandoned a defense of truth in his case. Wright claimed that his reputation within the cryptocurrency industry had been "seriously harmed" by McCormack's claims. He said he had been invited to speak at numerous conferences after the successful submission of academic papers for blind peer review, but 10 invites had been withdrawn following McCormack's tweets. This included alleged potential appearances at events in France, Vietnam, the US, Canada and Portugal.

But McCormack submitted evidence from academics challenging Wright's claims, which were then dropped from his case at the trial in May. Wright later accepted that some of his evidence was "wrong" but said that this was "inadvertent," Chamberlain said in his judgment. The judge noted that there was "no documentary evidence" that Wright had a paper accepted at any of the conferences identified in the earlier version of his libel claim, nor that he received an invitation to speak at them except possibly at one, and that any invitation was withdrawn. Wright's explanation for abandoning this part of his case because the alleged damage to his reputation from the "disinvitations" was outside England and Wales "does not withstand scrutiny," the judge added. He concluded: "Dr Wright's original case on serious harm, and the evidence supporting it, both of which were maintained until days before trial, were deliberately false." [...] [T]he judge said that Wright's pre-trial case over the serious harm to his reputation made it "unconscionable" that he should receive "any more than nominal damages." In statement Wright said: "I intend to appeal the adverse findings of the judgment in which my evidence was clearly misunderstood. I will continue legal challenges until these baseless and harmful attacks designed to belittle my reputation stop."

After admonishing crypto lender Voyager Digital for "false and misleading" statements on the subject, the FDIC said banks must ensure that crypto firms they partner with are clear about whether customer deposits are insured. From a report: In industry guidance published Friday, the Federal Deposit Insurance Corp. said insured banks should monitor that crypto firms they work with do not misrepresent the availability of deposit insurance and "should take appropriate action to address such misrepresentations." The notice comes a day after the FDIC and Federal Reserve demanded Voyager Digital correct what it called misrepresentations that suggested some of its customers were covered by federal insurance if the firm collapsed.

When Voyager filed for bankruptcy earlier this month, its banking partner, Metropolitan Commercial Bank, issued a statement clarifying that FDIC insurance is available "only to protect against the failure of Metropolitan Commercial Bank," not Voyager. Metropolitan is holding about $350 million in customer funds, which Voyager has told customers will be released after the bank undergoes a fraud prevention process. Metropolitan is far from the only bank holding deposits on behalf of crypto companies, and now the FDIC wants to ensure customers are not further confused about how, or if, their assets are covered.

Babel Finance, the troubled Asian crypto lender that abruptly halted client withdrawals last month, suffered heavy losses due to proprietary trading with customer funds, according to its restructuring proposal deck obtained by The Block. From a report: The deck, dated July 2022, reveals that Babel Finance lost more than $280 million in bitcoin (BTC) and ether (ETH) due to its proprietary trading failure. Specifically, it lost around 8,000 BTC and 56,000 ETH in June after facing liquidation due to a significant market downturn. "In that volatile week of June when BTC fell precipitously from 30k to 20k, unhedged positions in [proprietary trading] accounts chalked up significant losses, directly leading to forced liquidation of multiple Trading Accounts and wiped out ~8,000 BTC and ~56,000 ETH," reads the deck. Due to these massive losses, Babel's lending and trading departments were unable to meet margin calls from counterparties.

"Conclusion: Single point of failure - The Proprietary Trading team's failed operation falls outside of the company's normal business which has otherwise been running smoothly with proper management and control," according to the deck. Babel Finance describes its proprietary trading business as a "risky" business yet it failed to hedge its positions. "A Proprietary Trading team operates several Trading Accounts not controlled or monitored by Trading Department; no trading mandate or risk controls were implemented for these accounts; no PnL [profit and loss] was reported," per the deck.

Nirvana Finance, a Solana-based yield protocol, suffered a $3.5 million exploit utilizing flash loans to manipulate and drain its liquidity pools, blockchain data shows. CoinDesk reports: The price of the protocol's native ANA token fell over 80% in the past few hours, while its NIRV stablecoin lost its peg to the U.S. dollar and dropped to 8 cents at writing time, CoinGecko data shows. Nirvana allowed users to earn annual yields of over 100% on their locked assets by creating and destroying tokens based on user demand as the ANA tokens were bought from and sold to the protocol. Over $3.5 million worth of ANA was locked on the protocol before the attack on Thursday.

Data from blockchain explorers shows the attack used over 10 million USDC sourced from lending tool Solend in a flash loan. At that point over $10 million worth of ANA was minted, or created, and the entire amount swapped to receive $3.5 million worth of tether (USDT) from Nirvana's treasury wallet. This was possible because the treasury considered the 10 million USDC infusion to be genuine. However, it wasn't, and the protocol was hence tricked into releasing its treasury's liquidity. The total value locked (TVL) on Nirvana fell to 7 cents in European morning hours following the attack. Its entire liquidity pool was effectively drained, data from DeFi Llama shows.

The 10 million USDC was returned to Solend after the exploit. The stolen funds were transferred to the Ethereum network using Wormhole, a blockchain tool that connects Solana to other networks, and converted to DAI, an Ethereum-based stablecoin, blockchain data shows. The attacker address -- 0xB9AE2624Ab08661F010185d72Dd506E199E67C09 -- currently holds over $3.5 million worth of DAI, blockchain data shows. Nirvana's trading functions were suspended by developers following the attack, as per messages by admins on the protocol's Telegram channel.

El Salvador's finance minister defended the country's strategy to adopt Bitcoin as legal tender even as critics urge the nation to ditch the experiment as the cryptocurrency world suffers through a bear market. From a report: Almost a year into the country's bet on Bitcoin, Alejandro Zelaya said the digital currency has brought financial services to a largely unbanked population and attracted tourism and investments. While its use as a means of exchange is low, he said he remains a believer in digital money and added the government is still planning to issue a Bitcoin-backed bond using blockchain technology. "For some, it's something new and something they don't entirely understand, but it's a phenomenon that exists and is gaining ground and will continue to be around in the coming years," Zelaya said in an interview on Wednesday.

The government has purchased 2,381 Bitcoin with public funds, which, today, are worth about 50% less than what authorities paid for them, according to calculations by Bloomberg based on tweets by President Nayib Bukele. A survey by the U.S. National Bureau of Economic Research found that most businesses and consumers in El Salvador still prefer to use hard currency to pay for goods and services and send remittances. The International Monetary Fund has urged the nation to strip Bitcoin of its legal standing. The government is negotiating a $1.3 billion extended fund facility with the IMF, but no deal has yet been reached.

A bill was introduced in the Senate today that would prevent Americans from needing to disclose capital gains or losses on most smaller-scale crypto transactions. From a report: Introduced by senators Patrick Toomey (R-PA) and Kyrsten Sinema (D-AZ), the Cryptocurrency Tax Fairness Act would exempt reporting crypto transactions of less than $50, or trades in which a person earns less than $50. "While digital currencies have the potential to become an ordinary part of Americans' everyday lives, our current tax code stands in the way," said Toomey, adding that the bill would help Americans "use cryptocurrencies more easily as an everyday method of payment by exempting from taxes small personal transactions like buying a cup of coffee." Right now, similar bills are working their way through Congress. The Responsible Financial Innovation Act, introduced by senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY), would remove the obligation to provide information on crypto gains of $200 or less to the Internal Revenue Service.

An anonymous reader quotes a report from Gizmodo: Former IT worker James Howells -- who once stood on the very forefront of the crypto boom and could have been a multimillionaire -- is desperate to scour a UK landfill located in Newport, Wales where he might find a missing drive that contains the passcode for a crypto wallet containing 8,000 bitcoin, worth close to $176 million as of writing. Howells said he accidentally dumped the wrong hard drive back in 2013. Though the price of crypto remains in the proverbial dumpster, this data cache represents millions of dollars simply stuck on the blockchain, with nobody able to access the wallet without the required passcode. It's been a long road, and he hasn't given up on his quest to rescue his missing millions. Only problem is finding that hard drive would require digging through a literal mountain of garbage.

In an interview with Business Insider released Sunday, Howell said he has a foolproof scheme to rescue his bitcoin from an actual trash pile. He's put together an $11 million business plan which he'll use to get investors and the Newport City Council on board to help excavate the landfill. His proposal would require them to dig through 110,000 tons of trash over three years. A $6 million version of the plan would go over 18 months. A video hosted by Top Gear alum Richard Hammond said the bitcoin "proponent" has already reportedly secured funding from two Euro-based venture capitalists Hanspeter Jaberg and Karl Wendeborn, if Howells can get approval from the local government.

The garbage would be sorted at a separate pop-up facility near the landfill using human pickers and an AI system used to spot that hard drive amidst all that other refuse. He's even brought on eight experts in artificial intelligence, excavation, waste management, and data extraction, all to find a lone hard drive in a trash pile. The plan also involves making use of the Boston Dynamics robotic dogs. The former IT worker told reporters the machines could be used as security and CCTV cameras to scan the ground, looking for the hard drive. When they were released, each "Spot" robot model cost $74,500. Even with that price tag, Howells said he already has names for the two. Insider reported he would name one Satoshi, named after Satoshi Nakamoto, the person or group behind the white paper that first proposed bitcoin back in 2008. The other one would be named "Hal" -- no, not that HAL -- but Hal Finney, the first person to receive a bitcoin transaction. A spokesperson for the local government told Insider Howells could present or say "nothing" that would convince them to go along with the plan, citing ecological risk. If the council says no -- again -- Howells told reporters he'd take the government to court.

"Uber has officially accepted responsibility for hiding a 2016 data breach that exposed the data of 57 million passengers and drivers..." reports Engadget.

Reuters explains this acknowledgement "was part of a settlement with U.S. prosecutors to avoid criminal charges." In entering a non-prosecution agreement, Uber admitted that its personnel failed to report the November 2016 hacking to the U.S. Federal Trade Commission [for nearly one year], even though the agency had been investigating the ride-sharing company's data security... U.S. Attorney Stephanie Hinds in San Francisco said the decision not to criminally charge Uber reflected new management's prompt investigation and disclosures, and Uber's 2018 agreement with the FTC to maintain a comprehensive privacy program for 20 years.

The San Francisco-based company is also cooperating with the prosecution of a former security chief, Joseph Sullivan, over his alleged role in concealing the hacking.
Here's what the Department of Justice is now alleging against that security chief (as summarized by Reuters last month: "he arranged to pay money to two hackers in exchange for their silence, while trying to conceal the hacking from passengers, drivers and the U.S. Federal Trade Commission."

That's led to three separate wire fraud charges against the former security chief, as well as two charges for obstruction of justice. The defendant was originally indicted in September 2020, and is believed to be the first corporate information security officer criminally charged with concealing a hacking. Prosecutors said Sullivan arranged to pay the hackers $100,000 in bitcoin, and have them sign nondisclosure agreements that falsely stated they had not stolen data.

Uber had a bounty program designed to reward security researchers who report flaws, not to cover up data thefts.... In September 2018, the San Francisco-based company paid $148 million to settle claims by all 50 U.S. states and Washington, D.C. that it was too slow to reveal the hacking.

"Record-breaking heat across Texas has pushed its fragile power grid to the brink," reports NBC News. "But extreme temperatures are doing something else in the famously pro-business state: stirring opposition to energy-guzzling crypto miners who've flocked there seeking low-cost energy and a deregulatory stance."

Ten industrial-scale crypto miners will consume an estimated 18 gigawatts in years to come — though the state's current capacity is around 80 gigawatts (though it's expected to grow).

The case against them? The energy crypto miners use puts "an almost unprecedented burden" on the Texas grid, according to Ben Hertz-Shargel, global head of Grid Edge, a unit of Wood Mackenzie, an energy consulting firm. Mining "pushes the system closer to dangerous system peaks at all times," he told NBC News. "It is completely inessential and consuming physical resources, time and money that should be going to decarbonize and strengthen the grid...."

Unlike other electricity systems, the Texas grid does not connect to other states' grids; that means it cannot receive power from other areas in emergencies. Because of their high demand for electricity, crypto miners raise costs for other consumers of power, Hertz-Shargel said. And, on the Texas grid, miners can get paid for powering down during peak demand periods, like the one that recently hit the state. Miners and other industrial customers with these types of arrangements receive revenues for not using electricity; the costs of those revenues are passed on to other electricity customers.... During peak periods, miners can also resell to the grid the electricity they would otherwise have used. Because their contracts can let them buy power at low cost, energy resales when demand is high can generate significant financial benefits in the form of credits against future use....

Electricity customers across the state will cover those credits, said Andrew Dessler, professor of atmospheric sciences at Texas A&M University. "Ratepayers in Texas are going to be paying it off a little bit every month for decades," Dessler said. "It angers me so much."
But Lee Bratcher, founder of the Texas Blockchain Council, makes the case for industrial-scale bitcoin mines: Bratcher and the crypto miners he represents say they provide three benefits to Texas. Because they can turn off their electricity use during high-demand periods, they can help stabilize the grid and rein in runaway power prices. "Power pricing is set off at peaks and the miners are specifically trying to turn off during peaks," he said. In addition, crypto miners' 24/7 demand for electricity can provide an incentive for wind and solar developers to bring more green power to the grid while new jobs and tax revenues "lead to orders of magnitude of human flourishing in communities where the mines set up," Bratcher said.
Still, 800 locals have signed a petition against plans to built America's largest bitcoin-mining facility — a facility which will consume 1.4 million gallons of water a day and 1 gigawatt of electricity (enough to power 200,000 homes). Jackie Sawicky, a small-business owner, is organizing the opposition to the Riot facility. "There are over 7,000 people in poverty and 8,000 seniors living on fixed incomes here," she told NBC News. "We cannot afford increased water costs and electricity."

According to a 2020 economic impact report commissioned by the Rockdale Municipal Development District, an entity run by area businesspeople, the facility will deliver an estimated $28.5 million in economic benefits to the community over 10 years. The operation employs "nearly 200 full-time benefited employees..."

The founders and partners of crypto hedge fund Three Arrows Capital, which filed for bankruptcy earlier this month, have broken their silence on just how they lost billions of dollars they borrowed from other firms. From a report: Su Zhu and Kyle Davies attribute 3AC's collapse to over-exposure to Terra, staked Ethereum, and Grayscale's Bitcoin trust. Zhu said in the case of Terra, he initially didn't see any red flags: "What we failed to realize was that Luna was capable of falling to effective zero in a matter of days and that this would catalyze a credit squeeze across the industry that would put significant pressure on all of our illiquid positions."

"We began to know Do Kwon on a personal basis as he moved to Singapore," said Zhu. "And we just felt like the project was going to do very big things, and had already done very big things. If we could have seen that, you know, that this was now like, potentially like attackable in some ways, and that it had grown too, you know, too big, too fast." Another popular trade among the ailing crypto companies was staked Ethereum, or stETH. Every stETH will in theory be redeemable for one Ethereum after the network migrates to a proof-of-stake (PoS) consensus mechanism in September. However, one of the knock-on effects of Terra's collapse was that stETH began to miss its peg. This attracted opportunistic traders to bet against the token: "Because Luna just happened, it was very much a contagion where people were like, 'OK, are there people who are also leveraged long staked Ether versus Ether who will get liquidated as the market goes down?' So the whole industry kind of effectively hunted these positions, thinking that, you know, that because it could be hunted essentially." Zhu also attributed 3AC's collapse to exposure to Grayscale's Bitcoin Trust (GBTC), an investment product for institutional investors who want exposure to Bitcoin without the risks of directly holding it. GBTC is currently trading at a 30% discount to BTC.

Semiconductor Manufacturing International Corp has likely advanced its production technology by two generations, defying US sanctions intended to halt the rise of China's largest chipmaker. From a report: The Shanghai-based manufacturer is shipping Bitcoin-mining semiconductors built using 7-nanometer technology, industry watcher TechInsights wrote in a blog post on Tuesday. That's well ahead of SMIC's established 14nm technology, a measure of fabrication complexity in which narrower transistor widths help produce faster and more efficient chips. Since late 2020, the US has barred the unlicensed sale to the Chinese firm of equipment that can be used to fabricate semiconductors of 10nm and beyond, infuriating Beijing.

A person familiar with the developments confirmed the report, asking not to be named as they were not authorized to discuss it publicly. SMIC's surprising progress raises questions about how effective export controls have been and whether Washington can indeed thwart China's ambition to foster a world-class chip industry at home and reduce reliance on foreign technologies. It also comes at a time American lawmakers have urged Washington to close loopholes in its Chinese-oriented curbs and ensure Beijing isn't supplying crucial technology to Russia. The restrictions effectively derailed Huawei Technologies's smartphone business by cutting it off from the tools to compete at the cutting edge -- but that company is now quietly staffing up a renewed effort to develop its in-house chipmaking acumen.

Cryptocurrency exchange Blockchain.com is cutting 25% of its workforce, equating to about 150 people, the firm said on Thursday. CoinDesk reports: The company cited the harsh bear market conditions and the need to absorb financial losses. The exchange recently revealed it was dealing with a $270 million shortfall from lending to beleaguered hedge fund Three Arrows Capital. Blockchain.com said it will close its Argentina-based offices and cancel team expansion plans in several countries. Some 44% of the affected employees are in Argentina, 26% in the U.S., 16% in the U.K. and the rest in other countries, the company said. The reduction brings the firm's staffing back to January levels, a representative told CoinDesk via email.

Blockchain.com has expanded rapidly in the past 16 months, growing from 150 employees to more than 600. Blockchain.com, which is one of the oldest firms in the crypto industry, is also shrinking its institutional lending business, halting all mergers and acquisitions, placing a pause on efforts to expand gaming and slowing its non-fungible token (NFT) marketplace. The firm said its most active demand was coming from Europe, the U.S. and Africa, as opposed to Latin America. It also said it was receiving more demand from brokerage, rather than gaming.

The U.S. Securities and Exchange Commission (SEC) is working to get some cryptolending companies properly registered if they operate more as investment firms, the head of the Wall Street regulator told CNBC in an interview on Thursday. From a report: SEC Chair Gary Gensler also said it was up to large financial institutions to decide whether they want to include crypto options in their portfolios for clients, but that the risks of crypto tokens need to be made public.

"We have focused on this area because many of these firms...may well be investment companies taking hundreds of thousands or millions of customers funds, pulling it together, and then relending it while offering pretty high returns. Sounds a little like an investment company, or a bank, you might say," Gensler said. "How are they doing that? What stands behind those promises? We're going to work with the industry to get these firms properly registered under the securities laws."