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Crypto Week: Investors Don’t Only Lose Money From Trading in the Crypto Market

Binance decided to delist Mithrill Cash (MITH) project and remove it from trading. MITH has subsequently asked for the return of 200,000 BNB tokens collateral that was deposited with Binance. The capitalisation of the failed project is estimated at $6 million, while the collateral is now worth $54 million. The issue is that this amount of BNB was around $1 million at a time when the deposit was made in 2018. Binance CEO, Changpeng Zhao, known as CZ in the crypto world, responded by saying that this collateral exists because the project developers constantly support it, including trading volume and liquidity and level of communication. CZ tweeted that the Binace team has made the right decision to deduct the collateral since the project’s website is no longer being updated and the market community has not received any news about the project for the last two years. The price of the token is 96% below its peak values and, most importantly, it is below a certain threshold that should not be crossed. According to the contract with Mithrill Cash revealed by CZ, this threshold is set at $0.15 and was violated by the project for eight times this amount and is now at $0.00447.

The other recent big story of the week is that  an investor decided to change $3 million in USDT to USDC. The investor from China kept his USDT in the Ledger cryptowallet and decided to use the Changelly platform to exchange tokens because it promised real-time arrival without registration. After a swift first test the investor encountered registration issues as the platform would not let him proceed without being compliant with  a KYC procedure.. The procedure was compliant as the investor had already made a significant transfer amount order. This issue was debated  with the service for several weeks until the support managers refused to continue any communications.

The issue is that such KYC procedures are made mandatory by the fifth directive of the European Union, as they were 5AMLD approved in 2018. So, Changelly has the right to hold the transaction until the client is complied with KYC procedures. Most blocking of transactions are usually made because of money laundering via cryptocurrency or it is authorised by the legal authorities of the EU. Many incidents of this kind are seen in the market as platforms and services want to perform legal business in the EU and comply with EU regulations. So, investors have to use other decentralised services if they do not want to confirm the sources of their income or otherwise they will fail to comply with other KYC procedures.

The Federal Reserve (Fed) has raised its interest rates by 50 basis points and confirmed its hawkish monetary stance for the whole 2023. The majority of the Federal Open Market Committee (FOMC) members predict that interest rates will reach above 5% by the end of next year. So, it is too early to think about any possible relief in monetary tightening since the Fed is committed to get inflation under control and would not underestimate any treats on this path.

This week investors will monitor the Core PCE Index as this index is valuable for the Fed to make interest rates decisions. FOMC Minutes from its December meeting, that will be published January 4, will be in focus too. Nevertheless, even without this information the demand for risky assets will continue to go down. BTC prices are expected to decline to $15,000 per coin and continue to fall further towards $10,000.