<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="555" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-820x555.jpg" alt="" class="wp-image-420644" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-820x555.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-300x203.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-133x90.jpg 133w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-768x519.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-1536x1039.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Representations of cryptocurrencies are seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration</figcaption></figure>



Cryptocurrency companies are playing a game of poker with the Securities and Exchange Commission, making bold threats to leave the U.S. as the regulator steps up pressure on the industry to toe the line.



Major players are hoping that the SEC and Washington takes, what crypto watchers see as bluffs, seriously and soften the hard line that regulators have taken on the industry.



Executives at firms including crypto exchange Coinbase and blockchain services company Ripple have piled on with comments laying into the SEC and signaling plans to shift business overseas, in a bid to rally support and send a message to U.S. politicians concerned that the country may miss out on a key technological innovation.



Coinbase CEO Brian Armstrong said last week that the SEC was on a “lone crusade” with its tough actions against certain crypto companies. He added that Chair Gary Gensler had taken an “anti-crypto view,” despite earlier being a supporter of the industry during his time as an economics professor at the MIT Sloan School of Management.



“The SEC is a bit of an outlier here,” Armstrong told CNBC’s Dan Murphy in an interview in Dubai. “I don’t think [Gensler is] necessarily trying to regulate the industry as much as maybe curtail it. But he’s created some lawsuits, and I think it’s quite unhelpful for the industry in the U.S. writ large.”



Brad Garlinghouse, CEO of Ripple, also tore into the SEC this week. When asked for his message to Gensler as the company announced an expansion into Dubai, he quipped, “Who?” before later saying Ripple will have spent $200 million defending itself against a lawsuit initiated by the regulator by the time it is over.



“I find it as a company that started in the United States and as somebody who is a U.S. citizen, it’s sad. I have sadness about this. The U.S. is getting passed not just by a little bit but by a lot,” Garlinghouse said.



“The tough thing about this is you have a country that I think has put politics ahead of policy and that’s not a good decision if you’re trying to invest in the economy.”



Dubai and Europe have proven to be much more favorable markets with their virtual asset regulatory frameworks, Garlinghouse said, adding: “The United States is definitely stuck.”



Garlinghouse, Armstrong and other crypto bosses have made threats to leave the U.S., highlighting concern from the industry that the SEC’s crackdown is becoming too harsh. The regulator has taken strong enforcement actions against companies including Ripple, Coinbase, Kraken and Paxos, accusing each of flouting securities laws.



The SEC’s contention is that most tokens in the market may qualify as securities, which would subject them to much stricter requirements around registration and disclosure. Crypto firms, naturally, have denied assets they issue or list on their platforms should be treated as securities.



Will they stay or will they go?



 The question is: could they actually leave? It looks pretty unlikely.



“The U.S. is one of the largest markets for crypto, and hence it is highly unlikely that they will leave,” Larisa Yarovaya, associate professor of finance at Southampton University, told CNBC via email.



“The biggest fear of crypto companies is that regulation will cause panic among crypto investors and prices will go down. To look confident (even arrogant) is a common tactic of crypto company CEOs. They think this will translate into investors’ confidence, overconfidence in some cases, and will encourage further irrational behaviour among investors, e.g. HODL [hold on for dear life] even when markets are falling.”



Ripple’s Garlinghouse has been threatening to move his company’s headquarters overseas since 2020. In October that year, he said the U.K., Switzerland, Singapore, Japan and the United Arab Emirates were under consideration for Ripple’s potential move abroad.



That hasn’t happened yet.



Coinbase’s chief, meanwhile, suggested at a London fintech conference in April that the firm would consider options of investing more abroad, including relocating from the U.S. to elsewhere, if the exchange doesn’t get regulatory clarity in the U.S.



A month later, Armstrong said Coinbase “is not going to relocate overseas.”



“We’re always going to have a U.S. presence … But the U.S. is a little bit behind right now,” he told CNBC.



The U.S. is a huge market for the industry, with over 50 million Americans saying they own some crypto, according to a survey conducted by Morning Consult for Coinbase.



“There’s a much greater focus on the international markets for those firms. But at the top end of the market, personally I just can’t see that ever happening that you leave the United States market completely,” Jonathan Levin, co-founder of Chainalysis, told CNBC in an interview in London.



“It’s more about how much do you invest in new international expansion where maybe that wasn’t as high up on the agenda, but now it’s let’s look at France, let’s look at the U.K.”



On top of this, the practicalities of moving these already large companies out of the U.S. would be tough.



“Although these industries are virtual by their nature, they still need people, and people have families, mortgages, and preferences on where they live. Replacing them with local talent in the new place may be easier said than done,” George Weston, a partner at global offshore law firm Harneys, told CNBC via email.



Regulatory certainty outside the U.S.



 Crypto bosses are playing up to some officials’ concerns that the U.S. has become shrouded in regulatory uncertainty while other jurisdictions, like the European Union and U.K., have charged forward with proposed regulatory frameworks for digital assets.



Hester Peirce, a commissioner at the SEC, said at a Financial Times conference last week that the U.S. was “shooting ourselves in the foot by not having a regulatory regime in the U.S.”



She praised the EU on its progress with waving through laws for the crypto industry.



The EU is expected to bring in the first comprehensive set of regulations for digital assets, known as Markets in Crypto Assets (MiCA), sometime in 2024.



“It’s really commendable that Europe was able to get that done so quickly,” Peirce said, according to Reuters. “If we built a good regulatory regime, people would come. I think you will see that with MiCA.”



Diego Ballo Ossio, a partner at law firm Clifford Chance, said other jurisdictions including the U.K. and EU are changing their legislative frameworks to create clear regulatory regimes for exchanges.



“This means that other countries are effectively providing US based exchanges an option – a place to move to. It is not unthinkable that a U.S. exchange decided to create operational hubs in non-U.S. jurisdictions where the product can be safely innovated and enhanced,” he told CNBC.



Binance, the world’s largest crypto exchange, recently said it has become more difficult for the company to operate into the U.S. and that it was minded to establish a regulated operation in the U.K.



Patrick Hillman, the company’s chief strategy officer, said the U.S. “has been very confusing over the past six months,” pointing to the SEC’s actions against Coinbase as a sign of how the country is in a “weird place.”



While the U.S. crypto industry might currently be throwing out empty threats right now, there could be a real issue if regulators in America don’t move forward with thoughtful regulation.



“My conclusion is that I think it is more sabre rattling than a genuine desire to up and leave the U.S., but if the SEC continues down the path it is on, many firms will have no choice but to try another way of doing business. It is existential,” Daniel Csefalvay, a partner at BCLP law firm, told CNBC via email.

Illustration shows representations of cryptocurrencies

Crypto companies are playing poker with the SEC as agency cracks down on the industry

WASHINGTON/MUMBAI, May 17 (Reuters)&nbsp;&#8211;&nbsp;Nofe Isah, a 25-year old based in Nigeria, has been investing in crypto since January. Last week, she lost all of her $5,000 in savings as cryptocurrency luna went into free fall.



Isah, a recently unemployed administrative officer, vowed she would never invest in crypto again.



&#8220;I can&#8217;t believe I fell for crypto,&#8221; she told Reuters by phone. &#8220;I&#8217;m just trying not to get myself depressed. Crypto has taken my money, fine. It shouldn&#8217;t take my head.”



The crypto market, known for its wild price swings, slumped last week as investors yanked money from riskier assets amid worries over soaring inflation and rising interest rates.



Bitcoin, the world&#8217;s largest cryptocurrency, fell as low as $25,401 on Thursday, its lowest since Dec. 2020. It hit a record high of $69,000 in November.



Small tokens were hit too, with ether, the second-largest token, dropping more than 15% to its lowest since June. Luna &#8211; a digital coin widely hyped on social media and backed by institutional crypto investors &#8211; shed nearly all of its value.



Small traders such as Isah have flocked to cryptocurrencies in the hope of quick returns, despite warnings from regulators that the emerging assets can be high risk.



Platforms such as Robinhood, which has 23 million customers across a variety of assets, have helped spur retail investing, including in crypto. Around a quarter of Robinhood&#8217;s transaction-based revenues came from cryptocurrencies in the first quarter of this year, Robinhood said in its latest earnings statement.



Overall user numbers at crypto platforms have ballooned. Binance, the world&#8217;s biggest crypto exchange, had some 118 million clients last month, up from 43.4 million in the first quarter of last year.



But after last week&#8217;s turmoil, online forums were awash with tales of woe, as retail investors expressed anguish about their losses.



&#8220;I&#8217;m 49, big mortgage, 3 kids etc. My retirement party is on ice for the foreseeable future!&#8221;, a user with the handle Boring-Fun-3646 said on Reddit.



Another user with the handle AdventurousAdagio830 posted on Reddit: &#8220;It doesn&#8217;t seem real that I lost $180,000.&#8221;



&#8216;DEATH SPIRAL&#8217;



Emblematic of crypto risks was the collapse last week of terraUSD, a stablecoin designed to keep a constant value via a complex algorithm that involved luna.



When the coins came under heavy selling pressure, the system broke down. TerraUSD &#8211; designed to keep a value of $1 &#8211; traded around 9 cents on Tuesday while luna plunged to near-zero, based on CoinGecko data.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL2N2X20JL&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Tejan Shrivastava, a 31-year old graphic designer from Mumbai, who has been investing in cryptocurrencies for the last year, had his $250 investment wiped out by luna&#8217;s collapse.



&#8220;It was stuck in a death spiral. All the money was gone in 15 minutes,&#8221; he told Reuters.



&#8220;I don&#8217;t even know if I&#8217;ll invest in crypto in the future. I have a crypto portfolio, but I am planning to liquidate it once it reaches break even.&#8221;



Luna&#8217;s fall wiped out most of its market value which had been above $40 billion as recently as early April, CoinGecko data shows.



Retail investors&#8217; online frustration even spilled over into the real world.



Seoul police last week said they were seeking a suspect after an unidentified individual rang the doorbell of the apartment of Do Kwon, the founder of terraUSD, and ran away.



Police would investigate whether the suspect had invested in cryptocurrencies, a Seoul police officer told Reuters.



PATCHY REGULATION



Through its 13-year life, the crypto sector has been peppered by vertiginous climbs and sudden free falls. In November, for instance, bitcoin slumped by a fifth in just under two weeks after touching a record $69,000. Six months earlier, it had tumbled by almost 40% in just nine days.



Yet crypto&#8217;s latest crash &#8211; which pushed the sector&#8217;s combined value to $1.2 trillion, less than half of where it was last November &#8211; led to the crushing of luna, which on May 1 was the eighth-largest cryptocurrency by market capitalisation.



Cryptocurrencies are subject to patchy regulation across the world, with traders of bitcoin and the panapoly of smaller tokens typically unprotected against price slumps.



But it is difficult to gauge the scale of retail investors&#8217; pain from the crypto plunge and the repercussions on future appetite given the opaque nature of the market.



In Britain more than 4% of adults &#8211; some 2.3 million people &#8211; own cryptocurrencies, data published last year by the UK financial watchdog showed.



Britain&#8217;s watchdog said understanding of crypto was falling compared with a year earlier, &#8220;suggesting that some crypto users may not fully understand what they are buying&#8221;.



Still, some small investors are keeping the faith.



Eloisa Marchesoni, based near Tulum in Mexico and investing with a crypto syndicate, said she would not give up.



&#8220;I am looking to buy the dip &#8211; we are all waiting for bitcoin to go down to $22,000, which is not something too probable but not something that&#8217;s &#8216;not probable at all&#8217;.&#8221;



Marchesoni is also hedging her crypto bets with physical assets &#8212; &#8220;cars because you can lease them, watches, real estate&#8221;.



Bitcoin&nbsp;BTC=BTSP&nbsp;was hovering around $30,000 on Tuesday, having lost more than 20% so far this month.



Regulators remain on alert. The British government said last month it will regulate stablecoins.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL5N2W23WH&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



The U.S. Securities and Exchange Commission is toughening its stance. Gary Gensler, SEC chair, said this week investors in cryptocurrencies needed more protections.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL2N2X81YX&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



(Additional reporting by Alun John in Hong Kong and Soo-hyang Choi in Seoul; Writing by Carolyn Cohn, Elizabeth Howcroft and Tom Wilson in London. Editing by Jane Merriman)

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Small players lose faith in crypto after sell-off￼

Bitcoin dropped below the $27,000 level as a recent sell-off in the cryptocurrency space continues.



The price of&nbsp;<a href="https://www.cnbc.com/quotes/BTC.CM=">bitcoin</a>&nbsp;was last down 8.76% to $26,848.20 as of 1:47 a.m. ET Thursday, according to data from Coin Metrics.&nbsp;<a href="https://www.cnbc.com/quotes/ETH.CM=">Ether</a>&nbsp;fell more than 13% to $1,832.33.



Cryptocurrencies fell with stocks after the Bureau of Labor Statistics reported consumer prices for the month of April&nbsp;<a href="https://www.cnbc.com/2022/05/11/cpi-april-2022.html">jumped 8.3%, which was slightly higher than expected</a>&nbsp;by economists polled by Dow Jones.



That spooked investors, leading them to exit risk assets including crypto. Cryptocurrencies remain highly correlated with the S&amp;P 500 and, more recently, the Nasdaq Composite.



<h2 class="wp-block-heading" id="h-bitcoin-stays-under-30-000-wednesday">Bitcoin stays under $30,000 Wednesday</h2>



“The crypto market has been under pressure for some time now,” said Michael Rinko, venture associate at AscendEx. “The Fed keeps hiking, so equities keep going down and crypto’s been going down along with it. Generally that’s created a lot of fear in the market.”



This is the second time this week bitcoin has fallen into the $29,000 range. Analysts have called $30,000 a key level for the largest cryptocurrency by market cap, and said it could fall even further if it can’t hold there.



This time last week bitcoin&nbsp;<a href="https://www.cnbc.com/2022/05/04/bitcoin-jumps-to-40000-after-fed-chair-powell-rules-out-bigger-rate-hikes.html">touched a recent high of $40,000</a>&nbsp;but quickly reversed the next day and has been steadily hitting new lows since.



Investors also digesting big news from the Terra project, whose suddenly popular stablecoin&nbsp;<a href="https://www.cnbc.com/quotes/UST.CM=">TerraUSD</a>&nbsp;crashed&nbsp;<a href="https://www.cnbc.com/2022/05/11/terra-ust-stablecoin-dives-below-1-peg-luna-cryptocurrency-down-80percent.html">almost 100% at one point</a>&nbsp;in the past week, breaking its $1 peg. The decentralized, algorithmic stablecoin is meant to be backed by a combination of digital assets, including bitcoin.

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Bitcoin drops below $27,000 level as crypto sell-off continues

KEY POINTS



<ul><li>UST, a so-called stablecoin that’s meant to maintain a $1 peg, was trading at less than 50 cents Wednesday.</li><li>Sister token luna dived more than 80%.</li><li>Terra creator Do Kwon said Tuesday he was “close to announcing a recovery plan” for UST.</li></ul>



The two main tokens from embattled crypto project Terra are now in free fall.



TerraUSD, or UST, is a so-called stablecoin that’s meant to maintain a 1-to-1 peg with the U.S. dollar. But the cryptocurrency plunged to as low as 31 cents Wednesday morning. It was last trading at less than 50 cents, according to CoinGecko data.



Sister token luna dived 95% to just $1.69. The latest plunge means luna has erased more than 98% of its value in the last seven days.



<a href="https://www.cnbc.com/quotes/BTC.CM=">Bitcoin</a>&nbsp;and&nbsp;<a href="https://www.cnbc.com/quotes/ETH.CM=">ether</a>&nbsp;saw more muted moves. Bitcoin fell about 1% to $31,378 while ether slipped 0.6% to $2,393.



Stablecoins are akin to bank accounts for the crypto economy, offering a sound store of value to avoid the kind of volatility cryptocurrencies like bitcoin have become notorious for — in theory, at least.



UST is what’s known as an “algorithmic” stablecoin. It uses a <a href="https://www.cnbc.com/2022/05/09/what-is-terrausd-ust-and-how-does-it-affect-bitcoin.html">complex system of minting and burning tokens</a> to adjust supply and stabilize prices. UST’s price has crumbled under the pressure of a sell-off in cryptocurrencies recently, resulting in further panic in the market.



Do Kwon, the coin’s creator, has amassed&nbsp;<a href="https://www.cnbc.com/2022/05/10/bitcoin-btc-investors-panic-as-terrausd-ust-sinks-below-1-peg.html">billions of dollars’ worth of bitcoin</a>&nbsp;through his Luna Foundation Guard fund to support UST in times of crisis. The fear now is that Luna Foundation Guard dumps those bitcoins onto the market, resulting in an even bigger sell-off.



Bitcoin&nbsp;<a href="https://www.cnbc.com/2022/05/10/bitcoin-dips-below-30000-drops-more-than-56percent-from-its-all-time-high.html">briefly slumped below $30,000</a>&nbsp;late Monday, its lowest price since July 2021. The world’s biggest digital coin is now hovering slightly above that level. It’s fallen over 50% since setting an all-time high of nearly $69,000 in November.



David Moreno Darocas, a research analyst at CryptoCompare, said the situation highlights the “fragility” of algorithmic stablecoins like UST.



“UST has grown to be both an integral and controversial piece of the crypto ecosystem,” he said.



The phenomenon is still relatively new. But UST has grown to become a major player in the crypto economy, with a circulating supply of 16 billion tokens.



Investors are now closely watching for how Luna Foundation Guard responds to prop up its ailing stablecoin. Kwon said Tuesday he was “close to announcing a recovery plan” for UST. “Hang tight,” he tweeted.



Elsewhere, crypto traders were also rattled by concerns over&nbsp;<a href="https://www.cnbc.com/quotes/COIN" target="_blank" rel="noreferrer noopener">Coinbase’s</a>&nbsp;financial health.



CEO Brian Armstrong clarified Tuesday that there was “no risk of bankruptcy” for the crypto exchange even as digital currency prices slide.



“For our retail customers, we’re taking further steps to update our user terms such that we offer the same protections to those customers in a black swan event,” he said in a series of tweets. “We should have had these in place previously, so let me apologize for that.”



Coinbase shares were down 19% in pre-market trading Wednesday after the company reported a&nbsp;<a href="https://www.cnbc.com/2022/05/10/coinbase-coin-earnings-q1-2022.html">27% slide in first-quarter revenue</a>.

51008793946_8a23be8a2d_k

Controversial stablecoin UST — which is meant to be pegged to the dollar — plummets below 50 cents

KEY POINTS



<ul><li>Crypto investors are keeping a close eye on UST, a controversial stablecoin, as the organization that supports it is sitting on billions of dollars in bitcoin.</li><li>Terra’s UST token sank below 70 cents late Monday, as holders continued to flee the controversial stablecoin.</li><li>Traders worry the project might have sold, or will sell, a large portion of its bitcoin to prop up UST.</li></ul>



Investors in&nbsp;<a href="https://www.cnbc.com/quotes/BTC.CM=">bitcoin</a>&nbsp;are in panic mode as the controversial terraUSD stablecoin slips further from its intended $1 peg.



TerraUSD, or UST, sank below 70 cents for the first time late Monday, as holders continued to flee the token in what some have described as a “bank run.” The token fell as low as 62 cents before regaining ground to trade at 90 cents Tuesday, according to Coinbase data.



Created by Singapore-based Terraform Labs in 2018, UST is what’s known as an “algorithmic” stablecoin. Part of the Terra blockchain project, it’s meant to track the value of the dollar, like fellow stablecoins tether and USDC.



However, unlike with those cryptocurrencies, Terra doesn’t have cash and other assets held in a reserve to back its token. Instead, it uses a complex mix of code — alongside a sister token called luna — to stabilize prices.



UST is important for bitcoin investors as Luna Foundation Guard, an organization supporting the Terra project, is sitting on billions of dollars in bitcoin that could potentially be dumped onto the market at any point.



″Every professional investor in crypto has one eye on UST today, watching to see if it can maintain its peg to the dollar,” said Matt Hougan, chief investment officer at Bitwise Asset Management. “There’s clearly significant risk in the market.”



In simple terms, the Terra protocol&nbsp;<a href="https://www.cnbc.com/2022/05/09/what-is-terrausd-ust-and-how-does-it-affect-bitcoin.html">destroys and creates new units of UST and luna</a>&nbsp;to adjust&nbsp;supply.&nbsp;When the price of UST falls&nbsp;below the dollar,&nbsp;it can be&nbsp;taken out of circulation and exchanged for luna, making&nbsp;UST’s supply more scarce and boosting its price&nbsp;— at least, that’s how it should work in theory.



To further complicate things, Terra’s creator, Do Kwon, bought $3.5 billion worth of bitcoin to provide a backstop for UST in times of crisis. The theory was that UST could eventually be redeemed for bitcoin instead of luna, but this is untested and hasn’t yet been put into practice.



Deposits into Anchor, Terra’s flagship lending protocol, have declined from 10.3 billion tokens on May 6 to just 6.4 billion Tuesday, according to data from blockchain analytics platform Nansen. Anchor offered users an almost 20% annual percentage yield on their UST holdings, a rate many analysts believe was unsustainable.



On Monday, Kwon’s Luna Foundation Guard said it would lend $750&nbsp;million worth of bitcoin to trading firms to “help protect the UST peg,” while a further 750 million UST will be lent out to buy more bitcoin “as market conditions normalize.”



In a follow-up tweet, the organization said it had withdrawn 37,000 bitcoins — worth more than $1 billion at current prices — to lend out. “Very little” of the borrowed bitcoins have been spent, Luna Foundation Guard said, but it is “currently being used to buy” UST.



Several crypto investors are worried that Luna Foundation Guard might have sold, or will sell, a large portion of its bitcoin to prop up UST — analysts pointed out that the group’s bitcoin wallet is now <a href="https://www.oklink.com/en/btc/address/bc1q9d4ywgfnd8h43da5tpcxcn6ajv590cg6d3tg6axemvljvt2k76zs50tv4q" target="_blank" rel="noreferrer noopener">completely empty</a>.



Amid all of this uncertainty, UST’s decline has sent shock waves throughout the crypto market.



Bitcoin, the world’s largest digital currency,&nbsp;<a href="https://www.cnbc.com/2022/05/10/bitcoin-dips-below-30000-drops-more-than-56percent-from-its-all-time-high.html">briefly fell below $30,000</a>, hitting its lowest price since July 2021. As of 7:00 a.m. ET, bitcoin was trading at $31,324, down around 5% in the last 24 hours. It’s now down more than 50% from its November all-time high.



Luna, UST’s counterpart, has roughly halved in value in the past 24 hours. It was last trading at a price of $32.



Adding to UST holders’ woes, Binance, the largest crypto exchange by market volume,&nbsp;<a href="https://www.binance.com/en/support/announcement/dc02bedd65be40f7b10022f26bc06879" target="_blank" rel="noreferrer noopener">temporarily suspended</a>&nbsp;withdrawals of both UST and luna “due to a high volume of pending withdrawal transactions,” citing network congestion.



Binance has since resumed withdrawals, and says it “will continue to monitor” network conditions.



“I think the market is expecting some forced selling here on the part of Terra and the reserve,” Nic Carter, co-founder of Coin Metrics, told CNBC. “It is a calamity but very expected. No algorithmic stablecoin has ever succeeded and this is no exception.”



He added that the problem with UST is that it’s largely “backed by faith.”



“It’s not fully guaranteed, it’s certainly not fully backed by reserves,” he told CNBC. “It was really just backed by faith in the issuer effectively.”



Terraform Labs did not respond to multiple requests for comment.

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Ahead of the Coinbase’s listing on the Nasdaq this week, the CEO Brian Armstrong told CNBC that regulation is one of the biggest risks when it comes to the cryptocurrency business. He said that the Crypto guys just want to be treated on a level playing field with traditional financial services. Is this possible? Can the rebel be tamed? Joining CNBC Africa to discuss crypto regulation is Brandon Topham, Divisional Executive for Enforcement at the Financial Sector Conduct Authority.

Cryptocurrency regulation in SA: What you need to know

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Mulondo Daniel, Ugandan Representative for Binance Africa Affiliates joins CNBC Africa to explore opportunities that the crypto boom could open up on the African continent.

Crypto in Africa: Exploring the opportunities

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The Central Bank of Nigeria says its recent directive to regulated financial institutions to desist from dealing in cryptocurrencies and identify people and organisations transacting in cryptocurrency exchanges and close their accounts.

Nigeria’s Central Bank reiterates position on closure of crypto accounts

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Bitcoin has reached record highs this year, smashing through the $23000 mark yesterday. The cryptocurrency is on a supercharged rally, as interest for it grows, particularly from institutional investors. Some are saying that if Bitcoin keeps this momentum, it could test $36000 next year. Joining CNBC Africa for a conversation on the cryptocurrency is Tone Vays, Blockchain &#038; Bitcoin Analyst.

What’s behind the Bitcoin’s supercharged rally?

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Bitcoin has rallied to all-time highs in recent months, as the cryptocurrency rises as an alternative investment. Joining CNBC Africa to provide more insight on the performance of Bitcoin and the outlook going into the next year is Marius Reitz, General Manager for Africa at Luno.

Bitcoin: A player for the future?

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SOV Development Foundation has created the first cryptocurrency for a nation, CNBC Africa spoke with Peter Dittus, Chairman of the foundation on how it will operate and how effective Robo Central Bank could eliminate the risks of hyperinflation.

SOV Development Foundation creates first cryptocurrency for a nation. Here’s how it works

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Binance, a blockchain ecosystem, has recently allowed South African bank account holders to directly trade cryptocurrencies using the rand value on its platform and is allowing other African countries to also explore and advance the use of technology in the world on cryptocurrency. The Founder and CEO of Binance, Changpeng Zhao joins CNBC Africa for more.

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Crypto companies are playing poker with the SEC as agency cracks down on the industry

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Controversial stablecoin UST — which is meant to be pegged to the dollar — plummets below 50 cents

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Small players lose faith in crypto after sell-off