A lot happened in just a week, and they are not necessarily good news. Crypto companies do their best not to crash, but some disasters are inevitable.
Huobi was on the brink of a crash
Huobi Global, one of the most notable crypto exchanges, experienced liquidity problems with its stablecoin HUSD. The stablecoin was launched several years ago, and it almost became Terra 2.0 as it lost its parity and fell to $0.85. However, everything returned to normal the day after, and HUSD is trading at parity again.
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But still, these kinds of events throw a bad rap on crypto, especially stablecoins, which are supposed to be, well…stable. If the stablecoin would not repeg to parity, their Huobi token could also go in trouble and wipe out its $680 million market capitalization. And as a domino effect, people could start withdrawing massive amounts from stablecoins, and that would lead to even more depegs.
Celsius could be out of business soon
Several months ago, the Celsius network’s suspension of withdrawals drove the crypto lender to a disaster, but it seems that the company’s financial situation is worse than previously thought. A fresh court document was released on Monday evening by Kirkland & Ellis, and the legal team engaged in restructuring the Celsius debt. It contains less-than-optimistic revenue estimates for the lender.
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According to a document sent to the U.S. Bankruptcy Court for the Southern District of New York ahead of a hearing, Celsius is short $2.8 billion in unpaid liabilities. Even yet, it seems that Celsius will run out of cash by the end of October and won’t have any more cash for another three months. As a result, by the end of October, it is anticipated to have a $33.9 million hole on its balance sheet.
Holdnaut fires 80% of its staff
On August 8, cryptocurrency lender Hodlnaut stopped deposits, token swaps, and withdrawals due to “market conditions.” On Tuesday, the struggling company applied for creditor protection in Singapore to prevent asset-forced liquidation. According to reports, Holdnaut held $187 million in TerraUSD, and its problems started when it crashed to zero in May, sustaining significant losses. Holdnaut disclosed that up to 40 employees, or 80% of its workforce, had been let go.
Over $600 million liquidated
The whole crypto market plummeted out of nowhere and wiped out more than $80 billion in valuation in just one day. Of course, that is in a valuation of crypto, but there are also futures traders who use leverage. Reportedly, more than $600 million in long and even in short positions have been liquidated. Most positions were closed on OKX and Binance.
Mercado Libre enters the crypto space
Now let’s get to some good news finally. Mercado Libre, the biggest online retailer in Latin America, is launching its own cryptocurrency called Mercado Coin. It was launched on Thursday and will be running on the Ethereum network with a starting value of $0.10. Their goal is to democratize financial inclusion in Latin America and bring an impulse to Mercado’s loyalty program. Initially, it is only available in Brazil through Mercado Pago fintech company.
Hoy lanzamos Mercado Coin en Brasil, dándole mayor impulso a nuestro programa de lealtad y dando otro paso para democratizar la inclusión financiera en América Latina.
MercadoLibre to create cryptocurrency as part of loyalty program https://t.co/7kanuk6GLh
— Marcos Galperin (@marcos_galperin) August 18, 2022
Crypto.com got a green light
A well-known cryptocurrency exchange Crypto.com has been given permission by the Financial Conduct Authority (FCA) to engage in “certain crypto asset operations” in the U.K. The FCA defines crypto asset activity as including exchanging crypto assets for money or money for crypto assets, automating a computer to do so, and exchanging crypto assets for crypto assets, though specifics of what precisely the license authorizes Crypto.com to do have not yet leaked.
Crypto.com is not alone as Binance continues to travel all around the world, trying to adopt crypto assets massively. Especially the CEO of Binance visited Monaco, Vietnam, Senegal, and other nations, trying to show the benefits of blockchain and cryptocurrencies. The future looks interesting.
— CZ 🔶 Binance (@cz_binance) August 6, 2022