Blockchain Bites: Bankrupted Cred’s Missing Millions, Bitcoin Miners’ Quarterly Losses and More – CoinDesk

Crypto lender Creds bankruptcy is more than it appears. Two publicly traded bitcoin mining firms reported this week: Neither are profitable. ECB President Christine Lagarde has a hunch about the digital euro.

Top shelf

Chapter12?Creds Chapter 11 bankruptcy filing doesnt tell the whole story. With $67.8 million in assets and $136 million in liabilities, the crypto lender called it quits last weekend, leaving hundreds of depositors worrying about their collected $100 million loaned to the company. Cred has officially blamed malfeasance on the part of an outside investor entrusted with 800 BTC, although corporate insiders also say a $39 million line of credit to a Chinese lender went south. Theres a lot else going on, Daniyal Inamullah, former head of capital markets at Cred, said. CoinDesks Nathan DiCamillo investigates.

Bleeding BTC?Two publicly traded bitcoin mining companies are nearing profitability. Marathon and Hut 8, prominent within the sector, both narrowed quarterly losses, according to quarterly financial statements. Marathon bumped revenues to $835,184 in Q3, a 160% increase from the same period last year, while also recording a net loss of nearly $2 million. The companys loss per share, however, dropped from 12 cents to 6 cents a share year over year. Meanwhile, Hut 8 saw C$5.3 million (about US$4 million) in Q3 mining revenue, down 43% from the previous quarter, but also managed to trim its losses of C$0.07 a share in Q3 2019 to C$0.01 this quarter.

CBDC hunchEuropean Central Bank President Christine Lagarde has a hunch there will be a digital euro in two to four years. At a virtual panel yesterday, Lagarde said an European Union-wide central bank digital currency should be explored, If it is going to facilitate cross-border payments. The ECB previously said it is researching a CBDC. The latest statements are another indicator of what to expect and when: A digital euro will not be a substitute for cash, Lagarde said. It will be a complement. Separately, Benoit Coeure, head of the Innovation Hub at the Bank for International Settlements (BIS), said any potential CBDC for the supranational bank could involve blockchain. Everything is possible, he said.

Audited and attackedDecentralized finance (DeFi) platform Akropolis suffered a $2 million loss following a sophisticated flash loan attack. According to the platforms founder Ana Andrianova, the attacker pulled out tranches of $50,000 in DAI from the projects yCurve and sUSD pools, leveraging derivatives platform dYdX. While much is said about the audit trails of novel DeFi protocols, especially after hacks, Akropolis code was in fact audited twice: once by CertiK and also by firms SmartDec and Pessimistic.

Exchange flowsBitcoin flows to Binance from Huobi have reached an all-time high. According to data provided by CryptoQuant, some 18,652 bitcoins, worth nearly $300 million, were transferred from Huobi to Binance from Nov. 2 to Nov. 11. The bustling trade spiked ever since the Huobi chief operating officer, Robin Zhu, went missing at the beginning of the month. For months, Chinese regulators have been clamping down on crypto trading platforms, as part of a broader sweep of the fintech industry.

Quick bites

At stake

Dignity and bitcoinThe systems dont always work, Robby Gutmann, co-founder of Stone Ridge Holdings Group, told NLW in his first podcast interview since the company made waves by investing heavily in bitcoin. Thats why the $10 billion alternative asset manager has placed its primary treasury reserve in bitcoin.

In short, bitcoin is an exit from an inflating monetary base that has failed to serve the public. Last month, Stone announced it would stash more than 10,000 BTC with its crypto subsidiary NYDIG. This follows other corporate firms like MicroStrategy and Square moving some of their cash treasuries into bitcoin, also citing monetary debasement.

The expansion of the money supply in the U.S. hasnt shown up in growth of CPI in a measurable way, but in other measurements of inflation, Gutmann said. Notably, Gutmann considers the prospect of living a dignified retirement as an ideal marker for inflation.

The idea of financial security is much broader in bitcoin, he said, when claiming that only a single-digit number of fiat monetary systems are functional or scale. Can I save my days labor in something I can spend tomorrow next week, isnt a question most U.S. workers are confronted with, but it may be a legitimate concern elsewhere.

Thats why a bitcoin-based world economy could better serve nations that werent part of the industrializing processes of the 19th and 20th centuries.

Gutmann further explained NYDIGs thesis is in fostering the long-term development of an open source monetary system. This includes opening some of its in-house bitcoin infrastructure up to other companies we wont be the last people that have this challenge and applying for New York States BitLicense and a limited trust charter.

To the extent we can move the bitcoin project forward, it feels like we can do something measurable in society today around this idea of financial security for people outside the first world, he said.

The full, hour-long interview can be found here.

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Blockchain Bites: Bankrupted Cred's Missing Millions, Bitcoin Miners' Quarterly Losses and More - CoinDesk