Deutsche Bank questioned Tether's stability, sparking a debate about transparency and solvency in the stablecoin market.
Hacks on Coinbase's Base Network rose by 145% in April, raising security concerns within the crypto community.
Lightning Labs plans to introduce stablecoins on the Bitcoin network, which is set to increase efficiency and use cases.
Hong Kong authorities exposed a scam using Elon Musk deepfakes to lure investors.
CFTC Chair warns crypto companies to prepare for stricter regulations within the next two years.
Last week was a lot like previous weeks in the crypto market—eventful, strange and oddly entertaining.
Last week, we had several reports, including one involving a “heated” exchange between Deutsche Bank and Tether, the largest stablecoin issuer in the world.
We had a report showing that Coinbase's Base Network suffered a staggering 145% increase in hacks throughout April.
There was also the issue of an elaborate scam in Hong Kong where deepfakes of Tesla CEO, Elon Musk were used to scam investors.
Here are some of the most interesting stories in crypto from the past week, curated specially for you.
Last week, a report from Deutsche Bank rattled the hornet’s nest in the stablecoin market.
According to the report, Deutsche Bank claimed that it analyzed 334 currency pegs since 1800 (which is a staggering 223 years). And in this analysis, the bank concluded that only about 14% of these pegs survived.
In essence, Deutsche Bank means that most of the stablecoins in use today are likely to experience "turbulence and de-pegging events,", as we have seen with USDC and the more devastating Terra USD in 2022.
Deutsche Bank argues that while some of these stablecoins will hold their ground, many will fail due to issues with lack of transparency, and their exposure to speculation and sentiment like any other crypto.
Deutsche Bank didn't stop here. After mentioning the issue with TerraUSD, it went as far as mentioning and criticizing Tether directly, over issues with its transparency and solvency.
Deutsche Bank even warned of a potential 'Tether peso moment' that might be coming for Tether and will destabilize the crypto ecosystem.
Tether wasn’t pleased about this.
In a fiery response, Tether fired back, asserting that the report lacked "clarity and substantial evidence,".
Tether fires back
Tether argued that this report relied on "vague assertions" rather than actual fact, and even pointed out the irony of Deutsche Bank's critique, especially given its own history with fines and penalties.
Overall, the battle between these two financial giants only shows the need for said transparency and solvency between both, and every other crypto-affiliated company.
Last week, data showed that Coinbase’s Base Network has now become a magnet for cyber thefts and hacks, especially in April 2024.
Last month alone, hacks and thefts surged by a staggering 145%, according to reports from Scam Sniffer.
Hacks on Base rose 145%
This alarming surge in hacks and thefts has sent waves through the crypto community, forcing stakeholders to rethink everything.
In particular, two of the top ten hacks in April came from the Base network, accounting for about 21% of all the hacks during the month.
It became even worse when Scam Sniffer asserted that since January, hacks on the network skyrocketed by approximately 1,900%, making investors lose around $170,000 to phishing scams alone.
So far, hackers continue to use tools like wallet drainers, trojans and phishing to drain the wallets of unsuspecting victims.
Last week, Lightning Labs announced plans to deploy stablecoins on the Bitcoin network.
This is such a big deal because compared to how stablecoins have mostly been deployed on Ethereum, Tron and other chains, Bitcoin's stablecoin market is set to make transactions more efficient and cheap.
This will invariably increase Bitcoin’s use cases and therefore its price.
According to Elizabeth Stark, the CEO of Lightning Labs at FT Live's Crypto and Digital Assets Summit, the Bitcoin Lightning network is set to be at the heart of this innovation and will bring stablecoins as well as other tokenized assets to Bitcoin's robust ecosystem.
Countries battling with inflation and devaluing fiat will be able to enjoy cheap and efficient stablecoins on the Bitcoin network, with the company already working on raising funds to support the Taro protocol, which will enable stablecoin transfers through the Bitcoin network.
Last week, there was also the shocking incident of a massive scam in Hong Kong, in which deepfakes of Tesla CEO, Elon Musk were used to scam investors.
The elaborate scam was carried out by an unregistered entity known as Quantum AI.
Per reports, this company used sophisticated AI to create convincing videos of Musk, before using them in ads that offered AI-based trading services that Musk himself supposedly built.
The Hong Kong Securities and Futures Commission (HKSFC) quickly responded, issuing a stern warning to the company and deploying the Hong Kong police to block Quantum AI's website and scrape all social media pages in which these deepfakes had been used.
The crypto landscape is shifting, according to last week’s developments.
The current Commodity Futures Trading Commission (CFTC) Chair, Rostin Behnam said during during a recent speech at the 2024 Global Conference, that within the next two years, the crypto industry should be prepared for harsher and more severe regulation.
More severe regulations incoming
While Behnam’s comments on the subject seem like reports of doom and gloom, they may be necessary for the crypto market and the level of growth it is set to experience within this timeframe, and in this bull season.
Behnam warned that as the market grows, it needs a comprehensive regulatory framework, without which it would be vulnerable to fraud and manipulation.
A fraud-riddled and easily manipulated market would be bad for everyone involved.
Overall, this serves as a note of warning as the market matures and becomes a safe and welcoming space for investors of differing capacities.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.