Monday, Jun 13th 2022

Crypto Three Things (6/13)

Commentary

“History never repeats itself, but it does often rhyme.” - Mark Twain

1) Crypto lender Celsius halts withdrawals, native token nosedives: Celsius has frozen all customer activity such as withdrawals, swaps, and transfers due to “extreme market conditions.” The surprise news caused the company’s coin CEL to fall off a cliff, at one point down by more than 70%. Celsius did not provide a timeline for resuming the handling of clients’ requests.

Titan’s Takeaway: The value of assets deposited on Celsius’ platform declined 50% between December and May, plummeting to $12 billion from $24 billion. Celsius was previously valued at $3.25B after a $750M funding round in November of 2021, and we have a hunch that its valuation may fall faster than its AUM after this debacle.

2) Crypto market continues downward slide: The crypto market lost more than $200 billion in market cap over the last 3 days, briefly dropping below $1 trillion. Bitcoin and ether are down more than 70% from all-time-highs, and many altcoins are down more than 90%.

Titan’s Takeaway: Similar to the equity markets, tough macro conditions have been a severe headwind for the crypto market. We expect some crypto assets not to make it through this correction, but those that do, may come out stronger than before.

3) US court orders Terra creator Do Kwon to comply with SEC subpoenas. The chief executive of UST stablecoin maker Terraform Labs will need to present documents and materials to show whether the company violated regulations by selling unregistered securities. The U.S. court of appeals in New York upheld a claim from the SEC that seeks information on Mirror Protocol, a Terra-based platform that allows people to trade tokens that track the prices of large U.S. public companies.

Titan’s Takeaway: Regulators are raising the heat on Do Kwon in the aftermath of the $40B wipeout caused by the implosion of Terra’s stablecoin UST.  We expect a focus on transparency to be a common theme from regulators in the coming months.

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