The U.S. Treasury Department has banned all Americans from using decentralized cryptocurrency mixing service Tornado Cash by sanctioning addresses associated with it, saying that it “launders the proceeds of cybercrimes.”

The metaverse sector is witnessing its own housing crisis, as projects built on the Ethereum blockchain, including The Sandbox and Decentraland, have seen substantial declines in the value of the land on their platforms as users’ interest wanes.

Singapore-based cryptocurrency lender Hodlnaut has announced it’s “halting withdrawals, token swaps and deposits with immediate effect” due to “recent market conditions.” The move sees the company join other lenders that halted withdrawals this year.

Top stories in the Crypto Roundup today:

• U.S. Treasury Blacklists Crypto Mixing Service Tornado Cash
• Metaverse Land Prices Crash 85%
• Hodlnaut Freezes Withdrawals to ‘Stabilize Liquidity’
• Chart of the Week: BITO Premium/Discount

U.S. Treasury Blacklists Crypto Mixing Service Tornado Cash

The U.S. Treasury Department has banned all Americans from using decentralized cryptocurrency mixing service Tornado Cash by sanctioning addresses associated with it, saying that it “launders the proceeds of cybercrimes.”

A watchdog agency tasked with preventing sanctions violations, the Office of Foreign Assets Control (OFAC), has added Tornado Cash to its Specially Designated Nationals list, a running tally of blacklisted entities and cryptocurrency addresses, effectively banning Americans from interacting with addresses associated with the protocol.

The Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian Nelson, was quoted saying:

“Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks.”

Crypto mixing services are used to obscure trails of funds by blending tokens in a pool comprised of the assets of various entities. While there are legitimate uses for these services, including protecting financial privacy, the government said it fosters illicit activity.

Tornado Cash was used in some high-profile cases this year, including the $615 million hack of the network used by Axie Infinity, Ronin, and a $100 million attack on U.S. startup Harmony. Both attacks were linked to North Korean state-backed hackers, the Lazarus Group.

Metaverse Land Prices Crash 85%

The metaverse sector is witnessing its own housing crisis, as projects built on the Ethereum blockchain, including The Sandbox and Decentraland, have seen substantial declines in the value of the land on their platforms as users’ interest wanes.

The average price of land sold across Decentraland, for instance, peaked at $37,238 in February of this year, but as of August 1, it has dropped to $5,163. Similarly, the average price of land on The Sandbox dropped from around $35,500 in January to around $2,800 in August.

The average price for a parcel of virtual land across the six major Ethereum-based metaverse projects dropped from around $17,000 to around $2,500 in August, representing an 85% decline.

Metaverse land trading volumes dropped from a $1 billion peak in November 2021 to approximately $157 million in August 2022.

Hodlnaut Freezes Withdrawals to ‘Stabilize Liquidity’

Singapore-based cryptocurrency lender Hodlnaut has announced it’s “halting withdrawals, token swaps and deposits with immediate effect” due to “recent market conditions.” The move sees the company join other lenders that halted withdrawals this year.

The firm said it had withdrawn its license application with Singapore’s central bank and decided to freeze withdrawals to focus on “stabilizing our liquidity and preserving assets.” The company launched in 2019 and allowed investors to earn interest on their crypto by lending their tokens.

In February, Hodlnaut said it had more than $100 million in customer funds across over 1,000 users, up from $1 million a year earlier. In contrast, collapsed lender Celsius had $20 billion from more than 1.7 million users.

Hodlnaut has said it is “actively working on the recovery plan” and hopes to update investors “as soon as possible” on it.

Chart of the Week: BITO Premium/Discount

In this week’s Chart of the Week we’re looking at the ProShares BITO ETF premium and discount. An exchange-traded fund (ETF) can trade at a premium or discount during high volatility times when the underlying NAV differs from the trade price.

We can see in the chart that the largest discount was during the start of the crypto collapse in May, whereas recently, the ETF has started trading at a premium, suggesting institutional investors are feeling bullish on Bitcoin.

State of the Crypto by Top Tier Exchange Volume

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