Last Week [in] Crypto: Terra Reborn, Bear Market Threatens Industry, Ripple Eyes IPO

Be[In]Crypto has rounded up the most important stories in the crypto industry ranging from Terra’s rebirth, prediction of an even worse bear market, Paraguay regulating cryptocurrencies, Ripple’s plans to go public, and a new partnership deal.

Don’t forget to subscribe to our newsletter and get our weekly round-ups right in your inbox!

The birth of a new Terra

Do Kwon finally got his wish to revive Terra following the network’s implosion early this month. Terra 2.0 went live on May 27 as a new blockchain minus the ill-fated TerraUSD (UST) stablecoin after the successful passing of three proposals.

The old token would be renamed Luna Classic (LUNC) while the new token would be called Luna (LUNA2). The elaborate proposal involved airdropping new tokens to LUNA and UST tokens holders before the crash. 

While the team frantically tried to get the new iteration of Terra up and running, hackers were on the sidelines trying to profit from the chaos. PeckShield, a cryptocurrency security firm, drew the attention of community members that scammers were sending Wrapped LUNA 2.0 to Terra Deployer from an unknown address and distributing the tokens to reputable names in the space to confer legitimacy on the scam.

The ripple effects of the failed Terra project

Although a new Terra has been birthed, the effects of the failed version will be felt for a long time. A few days after the network imploded, USDTea, a new stablecoin was launched backed by cans of iced tea in response to the algorithmically backed UST.

On the regulatory side, things assumed a quickened pace as regulators around the globe sought to stamp their authority over the space. South Korea’s police launched a full-scale emergency investigation on Terraform Labs and its CEO over claims that the crash was due to foul play by the parties. 

The country’s police implored exchanges to freeze funds associated with the Luna Foundation Guard (LFG) to aid the investigations.

Investors are treading with caution on stablecoins as several lost their pegs in the aftermath of UST’s demise. Tether (USDT) gave investors a scare after it lost five cents during the month but looks to have turned around with its issuer launching a new stablecoin called MXNT, pegged to the Mexican peso.

Despite the decline of investors’ confidence in the space, some proponents still think algorithmic stablecoins have a role to play in decentralized finance (DeFi). “An algo stable will exist in the next five to seven years,” says one believer in the niche group of stablecoins.

Bear market blues

There has been blood in crypto streets caused by macroeconomic factors and exacerbated by the Terra debacle. Guggenheim Partners’ Chief Investment Officer, Scott Minerd warned that the bear market is only the beginning and the price of bitcoin (BTC) could drop as low as $8,000.

It seems the bear market has also created a hole in the pockets of Ethereum’s co-founder, Vitalik Buterin as he claims that he is no longer a billionaire. 

According to wallet details provided by CoinMarketCap, Buterin’s holdings fell from $1.4 billion to a little below $600 million.

Miami’s Mayor Francis Suarez is untroubled by the decline in prices and he intends to continue to accept his salary in bitcoin. He made his plans known at the World Economic Forum (WEF) in Davos but told attendees that the reason for his stance was probably because his bitcoin paycheck was not the only salary he collected every month.

Away from the doom and gloom of the cryptocurrency markets, Andreessen Horowitz (a16z) unveiled its fourth crypto fund worth $4.5 billion. 

Despite the gloomy nature of the markets, $1.5 billion has been earmarked for seed investments and $3 billion will be deployed for venture investments. 

The company claims that “bear markets are often when the best opportunities come about” without the distraction of “short-term price activity.”

Regulatory reports from around the world

Last week was pretty wild for regulators around the world but the wildest story was from U.S. lawmakers proposing a bill to ban the use of China’s digital yuan in the country’s cyberspace. 

The disgruntled lawmakers warned that the use of the central bank digital currency (CBDC) could lead to privacy issues as the Chinese government could spy on citizens.

In South America, Paraguay inched closer to a comprehensive cryptocurrency regulatory framework for the entire country. The country’s Chamber of Deputies voted against the recommendations of the central bank with the purpose being to “regulate the production activities and commercialization of virtual or crypto assets.”

Paraguay’s legislative house had previously approved a bill for the creation of a legal framework for mining bitcoin with 100% hydroelectric renewable power. 

Despite the pro-crypto nature of the legislature, the country’s central bank still has remained skeptical over the benefits of cryptocurrencies with a focus on electricity consumption and “loss of reputation and costs for the financial system.”

Two crypto projects are headed for the moon 

Ripple Labs disclosed plans to go public after the resolution of the legal debacle with the Securities and Exchange Commission (SEC). Speaking at the World Economic Forum (WEF) in Davos, CEO Brad Garlinghouse hopes that the legal drama will come to a logical conclusion. 

Lockheed Martin, a defense contractor, struck a partnership with Filecoin to improve access to data in space with the primary aim of reducing dependence on Earth’s servers.

“As we explore further into space, we need to develop in-space infrastructure to ensure that the space economy can grow and thrive without having to rely entirely on earth,” said Joe Landon, an executive at Lockheed’s Advanced Programs Development division.

Be[In]Crypto partners with Kleks Academy

Be[in]Crypto has announced a partnership with Kleks Academy, a film, and storytelling project. Kleks Academy is pushing the frontiers of storytelling through the use of non-fungible tokens (NFTs) to allow viewers to interact with the story.

In addition to the use of NFTs, Kleks Academy has augmented reality and a metaverse platform to fully immerse viewers into the story. As a partner, Be[in]Crypto will enjoy the perks of access to premiers and other events.