Love and Hate in the Same Day

As was expected, crypto was the talk of the Super Bowl, spreading a buzz throughout the United States. Coinbase, FTX, Crypto.com, and WeBull spent millions on advertising during the big game in hopes it would bring big traffic. 

Perhaps the most notable ad of the games was from Coinbase, which used its 60-second spot to air a QR code. At the end of the ad, they let up the act – Coinbase’s logo briefly flashed. Customers that went to the QR code, or were able to access the crashing site, led to a website that offered $15 in free Bitcoin to new customers who signed up in the next two days. Existing customers could sign up for a chance to win crypto during the game.

By some measures, the ad was a smashing success – but on the other hand, it crashed Coinbase’s site and app for 30 minutes. $COIN stock dropped by 2% today, despite the buzz it created on social media. 

Surojit Chatterjee, chief product officer at Coinbase, wrote on Twitter that the website saw over 20 million hits in just one minute, and their engagement grew six times over previous benchmarks.

“(Coinbase) just saw more traffic than we’ve ever encountered, but our teams pulled together and only had to throttle traffic for a few minutes. We are now back and ready for you,” Chatterjee said.

While Coinbase clamored to restore its site and app to former glory (and perhaps basked in their success), rival FTX ran its own debut ad featuring comedian Larry David. The “Curb Your Enthusiasm” star represented the serially incorrect and old-fashioned thinking about crypto and digital currency by suggesting that other people didn’t resist innovations like the wheel, democracy, and the like. After the ad aired at 7:54 pm, FTX announced they would be giving away 7.54 bitcoins to lucky winners. The contestants were asked to watch the advertisement, retweet it, and follow FTX. 

And after the halftime show ended, crypto.com aired a video featuring a young LeBron James chatting with an older LeBron James. The punch line was: “Fortune favors the brave.” Other crypto firms, including eToro, TurboTax also came up with crypto-themed advertisements.

Although it will take time to determine how much these advertisements immediately contributed to attracting newbies, there can be no doubt that crypto’s big night at the Super Bowl will be a notable one.

Crypto lending platform BlockFi reportedly settled a years-long dispute with the Securities and Exchange Commission (SEC) and state governments over claims that its product offered illegal securities. 

BlockFi paid $100 million – $50 million to the SEC and $50 million to 32 states –  to settle legal accusations related to its BlockFi Interest Account (BIA). This marks the largest penalty against a crypto firm ever, which also acts as an explicit warning to other crypto lenders. 

BlockFi violated three sections of federal securities laws. These sections include selling unregistered securities, carrying on business as an unregistered investment company, and making misleading statements on its website that loans were overcollateralized. BlockFi denied the allegations but was ultimately found guilty.

“This is the first case of its kind with respect to crypto lending platforms,” SEC Chair Gary Gensler said.

“Today’s settlement makes clear that crypto markets must comply with time-tested securities laws, such as the Securities Act of 1933 and the Investment Company Act of 1940. It further demonstrates the Commission’s willingness to work with crypto platforms to determine how they can come into compliance with those laws,” he added.

BlockFi would have faced a much higher fine had it not cooperated, according to the SEC. This is because, from May 2019 through June 2021, less than a quarter of the loans were actually overcollateralized, and the company underestimated the risks of lending crypto assets. For the unacquainted, that’s very bad. It also shakes trust in crypto. 

The New Jersey-based crypto giant has agreed to stop offering lending products and plans to register its high-yield interest accounts. BlockFi announced today it intends to formally register a new crypto lending product with the SEC, marking the start of the bureaucratic process of offering registered securities to the public.

The conclusion of this drama could spark more drama for BlockFi’s competitors – namely  Gemini, Celsius, OKCoin, and Voyager Digital. These companies stand to face scrutiny over their own lending products, even if they only intermediate the lending. The SEC raised questions about the practice, arguing that any lending-related product should be registered as a security. 

The SEC raised similar concerns when Coinbase planned to launch its crypto product, which the crypto exchange ultimately had to cancel because of increasing tensions with the regulatory body. This latest development indicates that launching crypto products without a green signal from the regulator is not going to be an easy task. 

Not all cryptos are feeling weak this week. Here’re three that are bringing it today:

1. Revain: The Ethereum-based online review platform token soared 12% today. Founded in 2018, the unique blockchain-based review platform is known for reviewing projects, exchanges, wallets, games, casinos, mining pools, and cards. 

Recently, the platform started Spirit of Victory competitions, where contestants were asked to guess company logos and other fun facts. The competition gained attention on Twitter and Telegram, and could be the reason behind the current surge. Moreover, the platform now allows authors to write reviews without any limit. 

$REV saw its peak three weeks ago when it reached $0.00494516. Today, the crypto traded at $0.00731384

2. Anchor Protocol: Anchor Protocol, a golden child of the Terra blockchain, booked double-digit gains after the Luna Foundation Guard (LFG) announced plans to add $450 million to Terra DeFi’s Anchor Protocol revenue reserve. It is believed that this new funding will help the lending protocol continue offering its ultra-high interest rate for the year. As of this writing, UST staked on Anchor was fetching 19.5% APY.

Since December, yield reserves have dropped more than 80% as a result of a lack of borrowing. It is now expected that the DeFi protocol will be back on its feet with the help of the Luna Foundation. The news caused the native token $ANC.X to increase by 13%, trading at $2.09.

3. Chainbing: Crypto Twitter exploded with speculation today… is Chainbing a legit project? The reason behind the question is its insane surge. The platform’s native token ($CBG) experienced an 18% increase today and a rise of 1229% in the past seven days.

The current surge could be a result of the platform airdropping some tokens and offering 5000 USDT to users after completing various tasks. 

Chainbing, which claims to store, analyze, and share data on the blockchain to provide users with fast/accurate information, has recently been activated on Twitter with 70 tweets to date. Exercise caution with this one.  You can read about it on its website here.

Rising tensions with Russian forces have Ukrainians turning to a surprising source of help: Bitcoin. New data shows that Ukrainian volunteer groups are crowdfunding the crypto to support their troops. 

In its latest report, Elliptic, which sells blockchain analytics tools to banks and cryptocurrency platforms like Binance and Circle, revealed how NGOs and volunteer groups are using cryptocurrency to fund operations against Russia.

Several hundred thousand dollars worth of cryptocurrency donations, made to Ukrainian NGOs and volunteer organizations, have been used for a range of purposes, including equipping the Ukrainian military with military gear, medical supplies and drones, said Elliptic. 

“Elliptic has identified several cryptocurrency wallets used by these volunteer groups and NGOs, which have collectively received funds totaling just over $570,000 – much of it over the past year,” per the report.

It should be noted that Russia has deployed 100,000 to 130,000 troops on its borders with Ukraine and Belarus. U.S. troops, who are allies with Ukraine, have moved 3,000 soldiers into the region.

According to the report, Bitcoin donations are being made to organizations including Come Back Alive, which provides training and medical equipment. They’ve also been made out to the Myrotvorets Center, which works with the Ukrainian government. Donations have even been sent to groups like Ukrainian Cyber Alliance and Belarusian Cyber-Partisans, which have attacked Russian targets with cyberattacks.

Crypto donations were not Ukraine’s idea of financing a conflict, per Elliptic. The platform reported that pro-Russia groups started using Bitcoin fundraising in 2014, and other organizations are now simply taking note and following suit. 

From WikiLeaks to Russian opposition politician Alexei Navalny, there’s a long history of controversial causes using cryptocurrency to raise funds. However, using crypto donations to fund the war or military is new. Earlier this month, a report stated that North Korea used stolen Bitcoin to fund its missile program.