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There is the SEC again

Terraform Labs, the company behind the Terra blockchain, is facing a major setback as the SEC files a lawsuit against the company and its founder, Do Kwon, for alleged multi-billion dollar crypto asset securities fraud. The SEC claims that Terraform Labs and Kwon orchestrated a scheme to defraud investors by selling an "inter-connected suite of crypto asset securities" in unregistered transactions, including the algorithmic stablecoin TerraClassicUSD (USTC), its connected cryptocurrency Terra Luna Classic (LUNC), and crypto derivatives that mirror the stock price of publicly listed companies. The SEC also took issue with Terra's issuance of Mirror (MIR), a governance token for the Mirror protocol that lists mAssets.

The SEC's lawsuit is the latest blow to Terra, which already suffered a black swan event last year when its algorithmic stablecoin lost its peg to the US dollar, causing a collapse in the digital asset market that wiped out an estimated value of $40 billion. The collapse was triggered by a massive sell-off of USTC, which fell below $0.10 on some exchanges, and caused the price of LUNC to collapse to zero. The incident also had a ripple effect on other stablecoins and decentralized finance (DeFi) protocols, leading to a sharp drop in the value of Bitcoin and other cryptocurrencies.

The question now is whether the SEC's lawsuit against Terraform Labs will trigger another crisis in the crypto industry. Some analysts believe that the regulatory crackdown on crypto firms will intensify, leading to more lawsuits and enforcement actions against companies that violate securities laws. Others argue that the crypto market has matured and become more resilient since the 2017 ICO boom, and that the black swan event in 2022 was a one-off event that will not be repeated. Whatever the case may be, it is clear that Terra and other crypto firms will have to navigate a complex and rapidly evolving regulatory landscape in the coming years.

Monopoly Money

In a stunning revelation, blockchain analytics firm Chainalysis has exposed that over 9,900 new tokens launched last year on BNB Smart Chain and Ethereum were nothing but "pump and dump" schemes. That's right, a whopping $4.6 billion was pumped into these fraudulent tokens by unsuspecting crypto investors. Man, I can't imagine having that amount of money. Yeah, I know, this was not one person who invested, but a great lot of the invested money was for sure grabbed by one creator. Yeah, you read that right! One pump-and-dump creator who launched 264 tokens grabbed a lot of the invested money. And the creator remains anonymous. Is it a bird or a plane? No one knows, but when you look at my portfolio you know it was not me. That much is sure!

Chainalysis identified 445 individuals or groups behind these suspected pump-and-dump tokens, who made a total profit of $30 million by selling their holdings. The firm classified a token as "worth analyzing" for potential "pump and dump" if it had a minimum of 10 swaps and four back-to-back days of trading on decentralized exchanges in the week after its launch. If a token from this group saw a price decline of 90% or more in the first week, Chainalysis deemed it a "pump and dump." Well, that's not a good start to a token's life, is it?

But to be fair, it is possible that some of these token launch teams did their best to form a healthy offering, and the subsequent drop in price was simply due to market forces, after all it is crypto and the market decides, you know, all that kind of talks. Either way, let's just hope that we as crypto investors have learned a valuable lesson AGAIN: "Don't fall for FOMO and hype around newly launched tokens, and always do your research." Or else you might end up with a token that's as worthless as Monopoly money.

FTX soap opera goes on

The last juicy piece of news to muse on today is the next part in the FTX soap opera. It seems that Bankman-Fried made a $250 million bond offering and the securities lawyer is calling it a big ol' joke.

You know, just when we thought FTX had enough drama for a lifetime, Bankman-Fried comes in and drops this bomb on us. I mean, $250 million is no small change, that's like 200 Lamborghinis or if you rather calculate it in pizzas, it's like 125,000 pizzas! Anyway the lawyer is calling it a joke, saying it doesn't comply with securities laws. I guess Bankman-Fried must have missed that memo.

The way I see it, FTX is turning into a soap opera, with twists and turns at every corner. Who knows, maybe we won't even be surprised if the next chapter involves a love triangle or a long-lost twin. But, back to reality, and all jokes aside. This means that again we need to keep an eye on this situation. We don't want another black swan event like what happened with Mt. Gox, am I right? And now that I mention Mt. Gox, there's also a piece of news about Mt. Gox. I'm not going to spill the beans on that news, if you want to know what is happening with that just read it here.

Well folks, it's time for me to step away from the keyboard and take a breather from the ever-moving crypto market. The volatility and unpredictability of this space is enough to make anyone lose their mind, but we all know we can't resist coming back for more.

And even though I may be leaving you for now, you can rest assured I'll be back before you can say "HODL". After all, who can resist the allure of those green candles and skyrocketing prices?

So until next time, my fellow crypto enthusiasts, stay vigilant, stay informed, and most importantly, stay sane. We're all in this together, for better or for worse. See you on the moon, or in the depths of the bear!