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Ukraine Blocks Cryptocurrency Wallet Used to Raise Funds for Russian Forces

Ukraine’s law enforcement and counterintelligence agency managed to seize funds in a cryptocurrency wallet used to finance the Russian military campaign in the country. Kyiv officials say the money raised through the wallet was spent on military equipment for pro-Russian separatist forces in the east.

Ukraine Seizes Cryptocurrency Donations Funding Russian Invasion

The Security Service of Ukraine (SBU) has for the first time implemented a mechanism to curb fundraising through cryptocurrencies for troops fighting on the Russian side in the ongoing hostilities in the country. The conflict turned into a full-scale war when the Russian army crossed the border into Ukraine in late February in what Moscow calls a “special military operation” in support of the pro-Russian breakaway regions of Luhansk and Donetsk.

In a press release on Tuesday, the SBU announced that a cryptocurrency wallet operated by a citizen of the Russian Federation and used to sponsor Russia’s military effort in Ukraine was blocked. The man, who volunteered, has been raising money for the needs of the Russian forces since the invasion began.

The wallet had accumulated digital coins worth 800,000 hryvnia (nearly $22,000 at current exchange rates) by the time it was blocked, the SBU said, adding that the funds had already been seized. Experts are now working to trace related transactions and transfer custody to Ukraine. The agency did not specify how it seized the wallet, but did reveal that it enlisted the help of foreign cryptocurrency companies.

Ukrainian investigators were able to establish that the owner of the wallet dedicated a significant part of the donated cryptocurrency to the purchase of military supplies for separatist fighters of the self-proclaimed Luhansk and Donetsk People’s Republics. Representatives of the National Police of Ukraine and the Public Ministry also participated in the operation.

Russian “volunteer” active on social media

The Russian activist has been actively seeking financial assistance on social media platforms since the beginning of the latest phase of the conflict. To promote his efforts, he regularly creates and publishes photo and video content, distributes publications published by partners and reports on the use of the funds raised, the SBU detailed without revealing the identity of the Russian.

A report by blockchain forensics firm Chainalysis last month revealed that 54 pro-Russian groups have collectively received more than $2.2 million in cryptocurrency. These organizations, which operate in Donetsk and Luhansk, received most of the donated amounts in bitcoin (BTC) and ether (ETH), but also in other cryptocurrencies.

Ukraine itself has relied on cryptocurrency donations, with the Kyiv government and volunteer groups raising digital money to fund defense efforts. Ukraine’s Minister of Digital Transformation Mykhailo Fedorov recently announced on Twitter that $54 million in cryptocurrency funds raised through the Aid for Ukraine initiative were spent to purchase armor, medicine, night visions, and even vehicles for the Ukrainian military.

The Ukrainian people have also received purely humanitarian aid from the crypto community and industry. European cryptocurrency exchange Whitebit, which has Ukrainian roots, has offered to support Ukrainian refugees through its representative offices abroad, and the world’s largest forex trading platform Binance has issued a card. of cryptocurrencies special for Ukrainians forced to leave their homes.

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NFT Lender BendDAO Liquidity Tested as ETH Reserves Fall

If you’re borrowing against the bored monkeys, you might want to keep your eyes peeled. Liquidity on the leading lending platform NFT BendDAO has been under a major stress test over the past 24 hours as ETH levels appear to be under pressure. To date, BendDAO’s ETH reserves have been replenished and are north of 800 WETH, however, many have noted that the lender has posted liquidity minimums of just 5 ETH, a dangerously low level for a lending platform of its nature.

BendDAO quickly appeared on the scene and spiced up the NFT conversation a bit, allowing users to leverage their first-rate NFTs as collateral; Let’s take a look at what we know about WETH lender reserves, what we’ve heard so far from the BendDAO team on the matter, and where we go from here.

Liquidity on high alert: how it happened

The often insightful research leader PROOF Collective @NFTStatistics.eth first published a report that gained traction on Crypto Twitter and the NFT community surrounding the issue, highlighting the issue when BendDAO’s liquidity dropped to just over 12 ETH:

He is well. Long discussion on the BendDAO situation:

1) They ran out of ETH. There is only 12.5 WETH in the contract. 2) What does it mean? People who have lent money to others through BendDAO to buy NFTs with leverage cannot withdraw their money. About 15,000 ETH was lent.

(1/9)

— NFTStatistics.eth (@punk9059) August 21, 2022

This conversation led to broader discussions about how the market reacts; Direct economics tells us that the threat of an imminent 100% APR would be powerful enough for many users to return collateral and replenish the DAO’s liquidity reserves. However, a downward spiral may begin if general market sentiment is bearish on NFT, as users will be less inclined to return their collateral if they believe the market will continue to move downwards.

BendDAO was quick to respond to settlement concerns, stating that they “underestimated how illiquid NFTs could be in a bear market when setting initial parameters” and proposing an emergency proposal to the DAO to improve liquidity parameters. This included adjusting the auction period, interest rate bases, settlement limits and the intention to continue the dialogue on the treatment of bad debts. That vote will likely pass.

It’s been an interesting ride over the past few days for holders of the BendDAO $BEND token. | Source: BEND-USDT at TradingView.com

how did we get here

BendDAO has been featured in many talking points among NFT circles lately, seemingly bridging the gap between DeFi and NFTs; The big bet here is whether BendDAO’s decision-making through future proposals will refine the mechanics of the lending process. In this case, the protocol is becoming an important piece of a growing ecosystem that has yet to prove its ability to weather major storms, but could still see substantial community involvement and interest.

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Investor Sentiment Drops as Cryptocurrency Market Loses $100 Billion

The cryptocurrency market has now faced another challenge. In the last day, bitcoin prices fell by around $2,000, causing the cryptocurrency market to lose a significant amount of value. As it stands now, the value of the cryptocurrency market has fallen over $100 billion and is now perilously close to falling below $1 trillion once again. This affected market sentiment, causing more fear in the market.

The market turns into fear

The cryptocurrency market was seeing some recovery in anticipation of the Ethereum meltdown. But as the excitement faded, the market began to see a drastic price correction. Bitcoin reached $25,000 at its peak in this latest recovery cycle. However, he has since lost most of those gains.

With that, cryptocurrency market sentiment picked up for a while after Bitcoin started its rally. At its highest point, the Fear & Greed index has a score of 42, the highest point in four months. That put him closer to greed than ever, but the market had other ideas.

Bitcoin price fell back below $22,000 and with it, market confidence plummeted. He finished Thursday with a low score of 30, putting him back in fear territory. The pullback is reflected in the cryptocurrency market, falling from $1.1 trillion to around $1 trillion at the time of writing.

As fear has returned to the market, investors are becoming more cautious when it comes to investing in the cryptocurrency market. Perpetrating traders have shown market fatigue over the past week, causing bitcoin funding rates to drop below neutral. Now the rest of the market is following suit.

Recovery in the cryptocurrency market?

With the market just starting to pull back, the correction is likely not over. These corrections are to be expected when the market grows so much in such a short time. This helps prices adjust to values ​​that reflect the current state of the market.

This means that the bitcoin price may still experience some drops. For now, the bottom is speculated to settle at a price of $17,600, so the bears will want to test support at this point. The historical movement also supports the movements, as it has done with previous bear markets.

Also, the weekend is here, and it is a period known for low liquidity. This means that Bitcoin is likely to continue its downtrend over the weekend. If the price of Bitcoin drops below $21,000, the cryptocurrency market will drop below $1 trillion.

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Ripple Labs wants to buy Celsius assets

The parent company behind the Ripple network has expressed interest in buying assets belonging to the bankrupt Celsius network.

Ripple Seeks M&A Opportunities

A Ripple Labs spokesperson said the company is considering buying certain assets from the bankrupt crypto lender. However, when asked if Ripple was interested in acquiring Celsius, the spokesperson declined to comment.

The representative stated,

“We are interested in learning about Celsius and its assets and whether any of them could be relevant to our business.”

They also mentioned that the payment services company is actively seeking strategic M&A opportunities to expand the company.

Celsius legal problems

Celsius Network has been in a lot of hot water recently, with its CEO Alex Mashinsky receiving more criticism. Mashinsky continued to assure Celsius clients that all was well, even on the verge of bankruptcy. He is also being investigated by a committee of creditors created by the US Trusteeship. The lending platform was one of the victims of the Terra LUNA implosion and had to file for bankruptcy in July after a month of frozen withdrawals.

On the other hand, Ripple Labs has done very well despite the SEC lawsuit and the bear market, mainly due to its focus on working with international clients and developing global payment networks.

Ripple interested in the Celsius case

Ripple’s legal representatives applied to the bankruptcy court to be represented in the Celsius proceedings despite not being one of the major creditors of the lending platform. The requests were approved by the court earlier this week. The above comment was made in response to inquiries about the court documents. The representative declined to provide further details on the matter.

The bankruptcy filings reveal that Celsius’s assets include digital assets held in escrow accounts, loans, a bitcoin mining operation, the platform’s own CEL token, and cash and cryptocurrencies that the company currently owns. As Ripple Labs has not signed any major deals as of yet, it should be interesting to see if this interest in the Celsius case really amounts to anything tangible.

Ripple legal problems

Ripple has been going through its own legal troubles since 2020, when the Securities and Exchange Commission sued the cryptocurrency payment provider for allegedly operating unregistered securities. The Ripple team has denied these claims, claiming that XRP is only traded as a digital currency and not as a security. The public consensus is that the lawsuit will be resolved in favor of Ripple, as the case brought by the SEC is flimsy at best.

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Bank of England Analysts See Cryptocurrencies Playing Major Roles in the Metaverse

Bank of England analysts say crypto assets could play important roles within the metaverse. “Widespread adoption of cryptocurrencies in the metaverse… would require adherence to strong regulatory frameworks for consumer protection and financial stability,” they added.

Bank of England Analysts on Metaverse, Cryptography and Regulation

Bank of England economist Owen Lock and policy analyst Teresa Cascino published a blog post titled “Crypto Assets, the Metaverse and Systemic Risk” on Tuesday.

“Crypto assets can play important roles within the metaverse,” they began, warning:

If an open, decentralized metaverse grows, existing cryptocurrency risks could increase to have systemic consequences for financial stability.

“Widespread adoption of cryptocurrencies in the metaverse, or any other environment, would require adherence to strong regulatory frameworks for consumer protection and financial stability,” they emphasized.

Lock and Cascino explained that “the open metaverse will require a means to own and transact digital objects that are interoperable between virtual worlds”, explaining, “We believe that cryptographic assets are well positioned to play a significant role here.”

They detailed:

If a sizable open metaverse materializes, households can hold more of their wealth in crypto assets to make metaverse-based payments or for investment purposes.

In addition, companies can increasingly accept cryptocurrency payments for goods and services and sell digital assets such as clothing, non-fungible tokens (NFTs) in the metaverse, they added.

The authors also noted that non-bank financial institutions could increase their holdings in cryptocurrencies if a growing open metaverse improves investment prospects for crypto assets and their supporting infrastructure.

Lock and Cascino noted that “this metaverse evolution is uncertain”, adding that their point of view is a possibility rather than a certainty.

“That said, if these exposures materialize, the risk crystallization of a crypto asset could result in: balance sheet losses for households and businesses, impact on unemployment, forced sales of traditional assets by non-banks to meet margin calls on crypto. active positions and negative impacts on the profitability of exposed banks”, they warned.