It was quite the dramatic week in crypto, with one major centralized crypto lender, Celsius, and one massive hedge fund, Three Arrows Capital, teetering on the brink of insolvency.
On Friday's Unchained, independent crypto researcher Mika Honkasalo, explains how it is that Celsius and Three Arrows Capital both found themselves in such a precarious position, who will be hurt if they go under, and how this might spread to the rest of the industry. Be sure not to miss this excellent episode on events that are certain to have a far-reaching impact on the crypto industry.
There was so much news regarding Celsius and Three Arrows, that a few items that didn’t make it into the interview portion of the podcast bear mentioning. First, The Financial Times reported that BlockFi liquidated Three Arrows after it failed to meet margin calls on its bitcoin loans with additional collateral this weekend.
Yuri Mushkin, BlockFi’s chief risk officer, told the FT that the company “can confirm that we exercised our best business judgment recently with a large client that failed to meet its obligations . . . We believe we were one of the first to take action with this counterparty.”
Additionally, Finblox, a crypto yield and staking platform, announced a $500 daily withdrawal limit and a $1,500 maximum monthly withdrawal limit for all users on Wednesday in light of a “highly volatile market.” As of press time, they have yet to release a schedule on when withdrawals might return to normalcy.

Notably, Three Arrows Capital is an investor and one of eight partners that previously helped Finblox generate yield, according to a statement released by Finblox on Twitter. In Finblox’s Twitter bio the company urges customers to sign up to “buy and earn up to 90% APY on your crypto!”
Coinbase, the largest crypto exchange in the US, laid off 18% of its workforce this week. The firm announced the move on Tuesday, with roughly 1,100 employees receiving the bad news via their personal email – as Coinbase decided to immediately cut off all affected staff from the company’s systems. In a blog post, CEO Brian Armstrong cited an upcoming “crypto winter” and an over-hiring spree as the two main reasons for the layoffs.
Coinbase was not the only major crypto company to shrink its workforce this week. Crypto.com (disclosure: a sponsor) trimmed its headcount by 5% over the weekend after laying off 260 employees, and crypto lending platform BlockFi plans to reduce its workforce by 20%, according to CEO Zac Prince on Twitter.
It’s not all bad news for those looking for a job in web3. For example, FTX CEO Sam Bankman-Fried says his firm is looking to grow from 300 to 400 people in the next year. Crypto exchange Kraken (disclosure: a former sponsor) is also looking to fill over 500 open positions. Binance is also in the hiring game, with CEO Changpeng Zhao tweeting, in a thinly veiled shot at Coinbase and Crypto.com, that the exchange is hiring for over 2,000 positions. “It was not easy saying no to Super bowl ads, stadium naming rights, large sponsor deals a few months ago, but we did. Today we are hiring for 2000 open positions for #Binance,” Zhao wrote.

Source: Twitter
Data from CoinMarketCap shows that, this week, the total cryptocurrency market cap fell below $1 trillion for the first time since January 2021 – marking a precipitous fall from its all-time high of $2.9 trillion in November 2021.
Bitcoin is currently trading at $22,480 – its lowest since December 2020. Ethereum has also crashed substantially. ETH is trading at $1,220 – its lowest since January 2021. ETH has had a particularly brutal last few months, falling 16.8%, 29.2%, and 36.8% over April, May, and June, respectively, according to data from CryptoRank.

Source: Twitter
As currently constituted, out of the top 100 coins by market capitalization, only one token, Bitfinex’s LEO, is up year-to-date. On the flip side, 23 tokens are down more than 80% YTD.
The New York Times reported that Kraken CEO Jesse Powell sparked an internal culture war at the crypto exchange. Powell has allegedly led company-wide discussions on topics like the usage of preferred pronouns, when using the n-word is okay, and whether Kraken employees should be able to arm themselves.
Powell, an early Bitcoiner with roots as far back as Mt. Gox, was cited as describing American women as “brainwashed” on the company Slack.
In addition, Kraken also published a company-wide culture document alongside a Jet Ski Program (“because they want people who are leaving to feel like they are hopping on a jet ski and heading happily to their next adventure”) that allows anyone who disagrees with the company to leave with four months' pay.
On Twitter, in a pre-emptive defensive thread before the NYT article was published, Powell said that roughly 20 employees out of 3,200 are not onboard with Kraken’s culture.

Source: Twitter
Based on Kaken executive Christina Yee’s reported words via Slack, this culture will not change anytime soon. “C.E.O., company, and culture are not going to change in a meaningful way,” she wrote. “If someone strongly dislikes or hates working here or thinks those here are hateful or have poor character, work somewhere that doesn’t disgust you.”
According to Fox Business, the US Securities and Exchange Commission launched an inquiry into whether crypto exchanges have proper safeguards in place to prevent insider trading on their platforms. Fox reports that the SEC has sent a letter to one of the major crypto exchanges requesting information on its current insider trading safeguards.
The SEC did not immediately respond to Fox’s request to comment.
Coin Center has filed a lawsuit against the Treasury Department, arguing that a crypto tax reporting requirement from last year’s infrastructure bill is “unconstitutional.”
The requirement called 6050i, which goes into effect in 2024 and which some of you may recall was covered on Unchained last fall, would require US taxpayers to report the Social Security numbers and other personal information of anyone who sends them more than $10,000 in cryptocurrency. This is problematic, as Coin Center explains in its lawsuit, because, "The reporting mandate would force Americans using cryptocurrency to share intrusive details about themselves, both with each other and with the federal government.”
They conclude: “In practice, the amendment’s reporting mandate would often be impossible to comply with because its terms do not coherently map onto the nature of the technology that it regulates.”
MetaMask and Phantom, along with other browser-based wallets, disclosed a recently patched security vulnerability that was fixed without any attackers taking advantage of it.

Source: Medium
According to MetaMask, the vulnerability did not affect the “vast majority” of users. In essence, the bug put a user’s Secret Recovery Phrase at risk within a device's storage under certain circumstances, such as if the user used a hard drive without encryption.
Both MetaMask and Phantom thanked Halborn Security, a crypto cybersecurity firm, for originally discovering the vulnerability in September 2021.
Block, through crypto subsidiary TBD, announced an early-stage initiative called “Web5” on Friday. The goal, according to promotional slides made available online, is to build a decentralized web development ecosystem that does not necessarily involve renting storage space from blockchain protocols. The initiative has apparently been named web5 to reflect that it is a “combination” of Web 2.0 and web3 principles and technologies.
Jack Dorsey, CEO of Block and web3 skeptic, said on Twitter that he believes Web5 will “likely be our most important contribution to the internet.” He also added, snarkily, “RIP web3 VCs.”
While the new project was announced last Friday, there is no official release date.

Source: Twitter
Tron’s algorithmic stablecoin USDD broke its peg with the dollar this week. Data from CoinGecko shows that the token has traded between $.96 and $.99 since Sunday afternoon Eastern time.
In response to the depegging event, Tron DAO Reserve, a foundation set up to ensure that USDD maintains its peg, deployed over $2 billion to restore the peg on Monday. The DAO also spent $220 million on purchasing more TRX on Wednesday, causing the price of TRX to jump 25%+. Despite the announcements, USDD has not yet managed to reach $1 again.
That being said, based on its website, it appears that Tron DAO Reserve has a bit more funding left to try to maintain USDD’s peg. The organization claims to have over $2.3 billion in reserves left.

Source: Twitter
Circle announced the launch of Euro Coin this week, a fully-reserved, Euro-backed stablecoin. The token will become available on June 30th and will operate under the same full-reserve model that Circle uses for USDC.

Source: Circle
There is now a Telegram chat titled “Bear Market Screaming Therapy Group” where members are “only allowed to send screaming voice notes.”
So, if you are really, really sad about Bitcoin being down 70% from its all-time high, well, then I guess you now have a place where you can go scream about it :)

Source: Twitter
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Cover Credit: Yuichiro Chino