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Will Tether Quake The Crypto Market This Week?

A Big Nothing Burger Or The Pin That Pops The Bubble?

If the events in the crypto market of December 2020 teach us anything, it’s that the actions of the financial regulators can cause quakes that have a tremendous impact on crypto prices.

Think back to late November and early December. There was an abundance of enthusiasm towards XRP with the (back then) forthcoming airdrop of Spark tokens. In late November, the price of XRP stood at 26 cents.

Airdrop Of Spark Tokens

With the interest in holding XRP tokens so as to benefit from the Spark airdrop, crypto investors were rushing into XRP, and drove its price above 70 cents.

The upward momentum in price was invigorating.

Even after the airdrop, the price of XRP was hovering around 60 cents as late as December 20.

Enter The SEC

Then the news hit.

The SEC had filed a lawsuit against Ripple. The price immediately crashed to 20 cents, wiping out more than 2/3rds of XRP’s value in a matter of days.

The moral of the story: actions taken by financial regulators can have an overwhelming effect on price.

Fast-forward to today. An important deadline has arrived in the case of Attorney General of the State of New York v. iFinex Inc. (the parent company of both Bitfinex and Tether).

Tether vs. New York State

Some history of this case:

Back in April 2019, the New York Attorney General (NYAG) accused stablecoin operator Tether of covering Bifinex’s $850 million losses by sourcing its USDT to cover the shortfall. Nevertheless, Tether replied calling this accusation in “bad faith” and “riddled with false assertions”. Note NYAG has filed charges against iFinex, the parent company of Bitfinex and Tether.

During the preliminary injunction in May 2019, Judge Joel Cohen extended the deadline to ninety more days. By August 2019, NYAG presented another proof and evidence in the case highlighting how Bitfinex and Tether were allegedly involved in covering up the $850 million losses. Later, the NYAG also called out iFinex’s motion “an improper attempt to impede a lawful investigation”.

The case took an interesting turn last year in September 2020 when Judge Cohen ruled that both Tether and Bitfinex should produce documents disclosing their financial relationship. In addition, he also passed an injunction barring Tether to issue loans to Bitfinex by ninety more days.

Deadline Extended

Last month, on December 9th, 2020, Attorney General Letitia James filed a document requesting Judge Cohen to extend the timeline to January 15. The Attorney General said that “the parties continue to cooperate on the production of documents in response to the 354 Order, and anticipate that the production might be finalized in the coming weeks.”

Two days ago, Friday, January 15, was the d-day for iFinex to produce necessary info and the documents so that NYAG is able to continue the investigation further. iFinex had to produce documents detailing the issuance and redemptions of Tether’s USDT stablecoins, and also disclose the trading activity on Bitfinex concerning Bitcoin and USDT.

We’re currently at the crossroads of the most crucial cases in the crypto space. Tether’s market cap has grown to $25 billion, and the token currently sits at #3 on coinmarketcap’s list of the largest cryptocurrencies in existence.

Will Tether Drag The Entire Crypto Market Lower?

Some market analysts believe that the issuance of Tether is being used to prop up the price of Bitcoin, and by extension the entire crypto market. Others, such as Ganesh Viswanath-Natraj, Assistant Professor of Finance at Warwick Business School, stated on a recent podcast, “Based on our evidence there, there’s no effect of tether issuance on crypto asset prices.”

While there were no new statements from the NY Supreme Court on deadline day, a statement is likely to be forthcoming this week.

If and when the statement unfolds, the BIG question for the entire crypto market is “Will it be a nothing-burger, or will it be the pin that pops the crypto bubble?”

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Cryptocurrency News Ripple News

Kraken Joins Growing List Of U.S. Exchanges Delisting XRP

XRP just is not winning now, as Kraken currently stands as the newest crypto exchange set to suspend trading in XRP tokens. The reason given, similar to the a number of other institutions as well as exchanges which dropped XRP like a hot potato in recent weeks, was because of the SEC enforcement actions brought against Ripple.

Kraken announced on Jan. fifteen that it will halt trading in XRP for US residents. From the company’s statement:

Given the recent SEC filing against Ripple Labs Inc., we are halting XRP trading for U.S. residents no later than January 29, 2021 at 5pm PT (January 30, 2021 at 1:00 UTC). We may begin implementing this process at any time on January 29, 2021, so all U.S. clients are strongly encouraged to resolve their positions prior to that day.

U.S. residents with open XRP spot positions on margin should satisfy their margin obligations by January 28, 2021 at 11:59pm PT or their positions will be liquidated in accordance with our Terms.

The exchange specified that US residents would still be in a position to deposit, hold, and withdraw XRP after the freeze takes place. The activity impacts just US residents; “Clients residing in some other places aren’t affected.”

The announcement additionally contains a FAQ list. It covers subjects like just how long the ban can last (they will adjust to any kind of change in the SEC saga). The upcoming change to a deposit-hold-withdraw mainly regime might improve when the circumstance should improve. Furthermore, the company’s plans about the Spark token airdop remain unrevised.

The SEC Move

News about Ripple has been decidedly negative since the SEC filed its lawsuit against Ripple. The SEC claims that the company sold $1.2 billion of unregistered securities in the type of XRP tokens. Former CEO Christian Larsen along with current CEO Brad Garlinghouse can also be charged with offering another $600 million in unregistered securities in the type of XRP.

Ripple Labs is actually guarding itself in court and in the media. Garlinghouse especially has taken to Twitter to clarify the company’s position, stating that nobody has been quiet, neither can they give up this fight. Garlinghouse claims to be on the proper side of the facts and of history, and is looking forward to Ripple’s day in court – in addition to engaging with the brand new SEC leadership when appointed.

Ripple Treading Water

Exchanges with substantial US exposure even moved fast. Garlinghouse observed that the US accounts for approximately five % of XRP holders, though the exchanges kept a watch on compliance. Bitstamp, Binance, Coinbase, along with OKCoin are actually among the exchanges which have signaled stoppages.

In a single indication as to just how Ripple is going to leave this eddy of exercise, SEC Commissioner Hester Peirce, commonly recognized as ‘Crypto Mom‘, reported in a recent interview that fees like these frequently get settled out of court.

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Cryptocurrency News Ethereum News Litecoin News Ripple News

Flare Networks Announces Smart Contracts For Litecoin

Ripple’s late 2020 rise was due partly to a massive airdrop of Flare (FLR) tokens. Now, the smart contract solution is actually adding support for Litecoin (LTC). An FLR airdrop to Litecoin users is actually in the works.

XRP wallets included in the December snapshot will receive a Flare tokens (worth a great amount of money, potentially).

In a Jan. 8, 2020 tweet, Flare says that they will “reduce” the number of Flare tokens for the project’s founders by five billion. This extra will be distributed to “Litecoin participants.” The Tweet promises clarification in the coming week.

A Flare for airdrops Tokens on the Flare network, known as Spark, will be used for governance and as collateral following the expected token drop in Q2, 2021. The business plans to bring smart contracts to Ripple’s XRP. Previously, Ripple was seen as a vehicle for funds transfer, and Flare claims that Spark tokens will add value.

With this tweet, the company is actually announcing what was somewhat unexpected: that the network will support other cryptocurrencies besides XRP, namely Litecoin.

Flare received a large amount of hype and press before the December snapshot for the airdrop to XRP holders.

For what it is worth, the company is naming their FLR tokens XFLR tokens (for XRP) on their site. There can probably be LFLR tokens for Litecoin. But it may not stop there. Flare could add support for other cryptos.

The rationale for choosing to integrate with Litecoin, over some other similarly sized digital assets, may have come right down to the fact that after XRP, LTC was the next biggest asset currently with no smart contract capabilities.

The Litecoin Foundation has stated it is “very excited to see the capability of smart contracts and interoperability coming for Litecoin through Flare.”

This also opens up the possibility of more such integrations that would bring the DeFi ecosystem to all non-ETH coins in the near future.

Flare has said it may support other networks in the future, but this was given little attention. Support for, say, the Bitcoin network could have implications that are huge and give ETH a run for its money.

Smart contracts and Ethereum competition? The short version of the purpose of Flare is actually to facilitate smart contracts on protocols that don’t have them built in. Flare is backed by XRP, and the airdrop to most XRP-hodling wallets cast Flare into the spotlight.

The very last several weeks have seen insane interest in Ethereum, and as the time tested and secure smart-contract chain, that is no surprise. The #2 crypto may have new investors interested in case they feel like they “missed the boat” with Bitcoin.

But the tech backing Ethereum’s value is the smart contracts. Though there are actually lots of other similar protocols that are potential rivals (DOT, EOS), ADA, Ethereum still reigns supreme.

Nevertheless, if other networks (like XRP or LTC) could support smart contracts, that would widen their appeal. In case these protocols could be interoperable via the Flare network, that would be a coup for Spark tokens (Flare hasn’t suggested they’ve plans for this).

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Cryptocurrency News

A Cryptocurrency Airdrop Provides Free Coins

A Cryptocurrency airdrop comes in two forms – Manual and automatic. The former is meant for the general users to have a look over the way the distribution will be carried out and monitor the distribution process itself; the latter is meant for the use of experts in the field, those who know how to manipulate the distribution in order to manipulate the price change. Automated Cryptocurrency airdrops are sent to all the wallets with the help of email notifications. The first kind of distribution is called the Delayed Distribution and as the name suggests, will be sent after a short period of time. The second kind, the Post-dated Distribution will be sent to the addresses registered after the expiry day specified in the contract.

The Recent Ripple Airdrop

Essentially, Ripple is adding Flare Network, a new protocol, to the XRP ecosystem. Flare Network will bring more support to owners of XRP tokens, specifically adding decentralized finance or DeFi functionality to the XRP ledger. As part of this, Flare Network has a native token, Spark (FLR). Over the weekend, any holders of XRP tokens received free Spark tokens. And after driving XRP prices up, it appears that the SEC Ripple lawsuit is now weighing on the crypto.

Still not sure exactly what this airdrop news is all about? DeFi functionality represents cutting out the middlemen from direct purchases, loans, betting, insurance and various other types of transactions. Decentralized finance is one of the biggest appeals of the crypto space — and up until now, most DeFi applications have run on the Ethereum (CCC:ETC) platform.

Now that XRP wants to differentiate itself, many bulls will likely appreciate that through Flare Network, XRP will be able to sustain smart contracts and bridge itself to existing Ethereum applications. For Ripple then, the Spark (FLR) airdrop is a way of kick-starting an important milestone.