Welcome to Barmy’s Daily Crypto News – December 8th, 2022
1. Coinbase trading revenue has fallen to ‘roughly half’ compared with last year
Coinbase CEO Brian Armstrong has revealed that the exchange’s trading revenue has declined by approximately 50% or more when compared with last year, according to a Dec. 7 report from Bloomberg.
During an interview with Bloomberg’s David Rubenstein Show, when asked about the exchange’s revenue, he stated that the company had $7 billion in revenue and $4 billion in earnings in 2021, but “it’s looking, you know, about roughly half that or less” in 2022.
Coinbase had previously stated in a letter to investors that it expected to post a roughly $500 million loss in adjusted earnings before interest, taxes, depreciation or amortization (EBITDA) for 2022.
The year of 2018 has been difficult for cryptocurrency exchanges, notably Coinbase. When the TerraUSD (TUSD) stablecoin lost its link to the dollar in May, panic erupted in the market. Due in part to the effects of the TUSD devaluation, cryptocurrency lender Celsius was unable to execute withdrawals and filed for bankruptcy in July.
The FTX events and other factors have significantly decreased crypto trading activity this year, with Coinbase reporting a 44% decline in revenue in just the third quarter.
2. Binance US removes Ethereum trading fees
In June, Binance US removed all costs for trading Bitcoin on the spot market for BTC/USD, BTC/USDT, BTC/USDC, and BTC/BUSD, following in the footsteps of Robinhood, which had invented no-commission crypto trading in 2018.
Although it runs independently in the US, Binance US uses the same name and logo as the main Binance cryptocurrency exchange. As the name says, Binance US caters mostly to American crypto traders.
According to Binance US president and CEO Brian Shroder, eliminating fees on both BTC and ETH cements the company’s position “as the low fee leader in crypto.” He continued, “It is vital that platforms act with users’ interests first now more than ever.”
Exchanges are essential to the acceptance of cryptocurrencies. Users are encouraged to conduct more transactions with digital assets by enabling zero-fee transfers. Millions of potential users would avoid or restrict their use of the technology if sending money between locations was expensive.
Spreads allow exchanges that don’t charge fees to still profit from fee-free transactions. The difference between a trading pair’s bid (sell) price and ask (buy) price is referred to as a spread in the industry.
3. Celsius is required to returned $44M to customers
A federal judge has ordered Celsius to return crypto worth around $44 million to the platform’s custody program customers.
The amount — which applies only to crypto held within custody accounts — is a tiny fraction of the billions Celsius owes creditors, and the latest decision comes after an agreement was reached between Celsius advisers and stakeholders that crypto deposited in the custody accounts belonged to its users and not the platform.
It is important to note that this order only applies to pure custody assets — those that have never touched Celsius’ Earn accounts and have only ever been held in the custody program.
As of August 29, Celsius had over $210 million in custody accounts, but only about $44 million of those funds met the requirements of the most recent order.
On the other hand, the majority of the $4.7 billion in user funds are currently held in Celsius’ Earn accounts, which were the accounts that allowed depositors to earn interest.
4. Ankr spends $15 million to pay users as Helio stablecoin recovers from an exploit
Cryptocurrency protocol In a tweet on December 7, Helio, the company that creates the stablecoin HAY that is tethered to the US dollar, stated that it had so far repurchased $3 million in HAY worth of bad debt. Ankr, a blockchain infrastructure platform, announced the day before that it will set aside $15 million to buy back the bad debt brought on by its most recent exploit and the subsequent overproduction of HAY.
After a technical upgrade, a hacker exploited flaws in Ankr’s smart contract code and stole private keys, resulting in a string of events that at first glance seemed unrelated. This happened on December 2. The price of aBNBc fell to less than $2 from around $300 as a result of the hacker creating 20 trillion Ankr Reward Bearing Staked BNB (aBNBc), which was pegged to BNB.
An alleged hard-coding of pegged prices between aBNBc and BNB on the Helio Protocol, however, was later exploited by a trader. The trader spent just 10 BNB to purchase 183,885 aBNBc, which they then used as collateral to borrow 16 million HAY and exchange for 15.5 million Binance USD (BUSD), making a 5,209x profit off of their initial investment.
As a result of the exploit, HAY lost its peg and dropped as low as $0.20 before recouping the majority of its losses to trade at $0.96 at the time of writing. The Helio team announced that it would buy back the extra HAY and send it to a burn address right after the occurrence. Initially, users could deposit BNB as collateral at a ratio of 152% in order to mint HAY. Before the incident, the protocol had a total value locked of about $90 million.
5. Russians cannot purchase cryptocurrency from miners, according to the Bank of Russia
The Russian central bank continues to take a very unfavorable position against cryptocurrencies and has suggested that local miners be prohibited from selling coins to locals.
A draft bill that was unveiled in mid-November 2022 had support from the Bank of Russia for the notion of allowing cryptocurrency mining in the country.
However, the Russian central bank intends to restrict cryptocurrency sales by miners to overseas exchanges and non-Russian citizens, according to a Dec. 7 article from the regional news outlet Interfax.
As many foreign cryptocurrency exchanges have prohibited Russians from utilizing their platforms in line with sanctions over Russia’s war in Ukraine, the new idea is likely to raise a lot of worries among Russian miners. The Bank of Russia has long advocated for limiting resident trading to international trading platforms.
The Bank of Russia has proposed that miners who wish to sell self-mined cryptocurrency within Russia do so through a “approved entity.”
The announcement follows the Russian Ministry of Finance’s rejection of the Bank of Russia’s proposal to impose strict licensing requirements on cryptocurrency mining operations there.
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