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El Salvador’s Bitcoin Law met with price crash, Sotheby’s NFT auction closes at $24.4 million

2021.09.12 Adam James

Conspiracy theories are becoming more popular after the conspicuous timing of BTC's price crash with El Salvador's implementation of Bitcoin as legal tender.

As the summer draws close to its close, regulatory action in the cryptocurrency industry is heating up after Coinbase CEO Brian Armstrong took to Twitter to defend his company's yield-generating product against the United States Securities and Exchange Commission. Meanwhile, decentralized exchange dYdX ran into issues while distributing its governance token, and an OpenSea bug resulted in the permanent loss of the first Ethereum Name Service domain.

Here's everything you need to know about these stories, and more, in this week's edition of OKEx Insights' News of the Week.

Sotheby's auctions BAYC NFTs for $24.4 million

This week's auction of 101 Bored Ape Yacht Club nonfungible tokens ended at nearly $24.4 million — eradicating early estimates expecting the lot to sell for $12 million to $18 million. The NFT project's official Twitter account tweeted in celebration:

"What an historic moment for the club: the @Sothebys auction of 101 Bored Apes has closed at over $24m. Congratulations and THANK YOU to the whole ape community. To the buyer, I think we speak for everybody when we say: WELCOME TO THE CLUB."

Key takeaways

  • The success of the BAYC auction at Sotheby's is yet another example of NFTs going fully mainstream — a fact that simply can no longer be denied.
  • BAYC NFTs originally cost 0.08 ETH at launch. The floor price for one of the collection's NFTs is currently 36.9 ETH on OpenSea — an increase of 46,025%.

DeFi trading platform dYdX distributes governance tokens

Decentralized trading platform dYdX began the distribution of its much-anticipated governance token on Wednesday after announcing plans to do so last month. 

However, the launch was somewhat marred by an error in the safety staking pool contract — which forced the team to block access to the yield-generating pool until at least the next epoch.

Key takeaways

  • dYdX follows in the footsteps of Uniswap and other decentralized exchanges that have retroactively airdropped governance tokens to their users — a trend many in the DeFi industry expect to continue.
  • Far from being the worst error in the history of decentralized finance, no user funds were put at risk and all funds are recoverable, according to the dYdX Foundation.

OpenSea bug affects first-ever ENS domain name

42 nonfungible tokens were unintentionally sent to a wrong address via a bug on OpenSea — affecting no less than $100,000-worth of NFTs.

The issue was raised by Ethereum Name Service developer Nick Johnson, who discovered the flaw after an attempted transfer of the ENS name rilxxlir.eth was inadvertently sent to a burn address — an address on a blockchain that nobody controls.

OpenSea has since fixed the bug, but the NFTs are essentially lost forever.

Key takeaway

  • OpenSea is, by far, the largest NFT marketplace in the industry. Though the total value of the affected NFTs might even be considered negligible by cryptocurrency-market standards, some had understated importance. For example, rilxxlir.eth was the first ENS domain name ever registered.
  • It is currently unclear whether or not OpenSea will compensate affected users.

U.S. SEC targets Coinbase Earn, CEO responds

After the United States Securities and Exchange Commission's plans to enforce regulations on Coinbase's relatively new yield-generating product came to light, the exchange's CEO responded directly on Twitter. Brian Armstrong used the social media platform to voice his concerns on the SEC's "really sketchy behavior," tweeting:

"They refuse to tell us why they think it's a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why."

Armstrong expressed his opinions regarding the SEC's apparently uneven distribution of enforcement in the cryptocurrency industry, its harming of consumers in the guise of protection, and the agency's refusal to meet with him previously on the grounds that they were "not meeting with any crypto companies."

Key takeaways

  • The SEC's latest actions suggest that crypto lenders in the United States are going to come under fire — not entirely dissimilar to past issuers of initial coin offerings, or ICOs.
  • The SEC also apparently has little interest in providing regulatory clarity when it comes to its enforcement over the cryptocurrency industry, and new SEC Chairman Gary Gensler is quickly becoming something of a villain in the space.

El Salvador's Bitcoin Law met with dramatic crypto crash

Rain fell on El Salvador's proverbial parade after the country's official launch of Bitcoin as legal tender was met with a $10,000 drop in the price of BTC and $3.22 billion in long liquidations across global cryptocurrency exchanges.

Cryptocurrency exchanges in the United States experienced myriad issues during the cascading sell-off. Coinbase experienced "degraded performance," Kraken experienced connectivity issues and Gemini temporarily went into full maintenance.

Key takeaways

  • Some in the industry — including El Salvador's president — implied that the IMF and other financial powers may have been the cause of the dramatic sell-off, given the rather conspicuous timing.
  • Mainstream media outlets were quick to tie-in the launch of El Salvador's Bitcoin Law to the dramatic drop in BTC's price.

OKEx Insights presents market analyses, in-depth features and curated news from crypto professionals.

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Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.

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