Crypto News, March 3: 'The Greatest Rug Pull Ever'

2 years ago

Ukraine cancels plans for an airdrop. Also today, the Fed is still planning to increase interest rates this month despite the invasion... what will this mean for Bitcoin?

Crypto News, March 3: 'The Greatest Rug Pull Ever'

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Today's headlines

Ukraine cancels airdrop to crypto donors

Ukraine has announced that it is canceling a planned airdrop to people who have made crypto donations following Russia's invasion. The country is going to release NFTs to support its Armed Forces instead. It comes hours after a token called Peaceful World emerged — with speculation it was linked to the airdrop. But a warning posted on Etherscan said: "This token is reported to have been used for misleading people into believing it was sent from a well-known address and may be spam." News of the airdrop had caused contributions to Ukraine's Crypto Fund to spike — and now, some on Twitter are describing this as the "best rug pull ever."

West vows to ensure crypto isn't used to evade sanctions

Officials in the U.S. and the EU are vowing to ensure that Russian individuals and companies don't use cryptocurrencies to evade economic sanctions. Chainalysis has told CoinMarketCap that this is unlikely to happen on a mass scale anyway — and if it did, it would be easy to detect. The intelligence firm's co-head of policy, Salman Banaei, told our podcast: "In banks, they have these dye packs that they use in order to make it hard for bank robbers to get away with their stolen loot, because the dye packs will explode. Cryptocurrencies operate in much the same way." However, Banaei did warn that we could see a surge in the number of Russia-linked ransomware attacks in the months ahead.

Ukraine donations continue to surge

Crypto donations to Ukraine are showing no sign of abating. Contributions have now topped $50 million — with a flurry of activity ahead of a now-canceled airdrop that was designed to reward contributors. The government is continuing to add support for new digital assets too, and recently opened an official Dogecoin wallet. A CryptoPunk NFT was recently sent to the government's Ethereum wallet, and UkraineDAO has raised $6.3 million by auctioning off a one-of-a-kind NFT of the country's flag.

Fed to push ahead with interest rate hike this month

Fed chairman Jerome Powell says the U.S. central bank is still planning to raise interest rates this month, despite Russia's invasion of Ukraine. He warned soaring levels of inflation need to be tackled because it is imposing "significant hardship" on everyday Americans. The prospect of interest rate rises have been a source of concern for investors — dampening the performance of both Bitcoin and the stock market. OANDA analyst Edward Moya has told CoinMarketCap that some of these rate hikes are "priced in." While he believes the crypto market can handle higher Treasury yields, he warned Bitcoin's price could suffer if these increases happen too quickly.

Major record labels join NFT platform

Two of the world's biggest music labels have joined an NFT platform co-founded by Bob Dylan's son. Snowcrash is set to be based on the Solana blockchain, and now counts Sony Music Entertainment and Universal Music Group as partners. Both companies recently spent a whopping $550 million to get their hands on Dylan's song catalog, and an NFT collection devoted to the music legend is scheduled to launch later this year. Given how these labels represent top talent including Adele, Justin Bieber, Kanye West and Elton John, it'll be interesting to see whether this sparks a flurry of music NFTs.

Double blow for the NFT market

The NFT market has been dealt a double blow. Not only have sales of digital collectibles dwindled in the past 30 days, but the SEC is now scrutinizing the market amid concerns some NFTs may have broken securities laws. Fractional NFTs, where an asset is broken down into smaller chunks that can easily be bought and sold, are set to be an area of particular interest. Data from CryptoSlam! shows NFT sales have plunged over the past 30 days. Overall trading volumes are down 32%, and some projects — including Bored Ape Yacht Club — have seen sales slide by 60%. A number of crypto influencers are now warning that an "ICO-style" crash may be imminent.
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