MicroStrategy's $4B bet on Bitcoin may face a margin call as Bitcoin briefly dropped below $21,000 Tuesday morning. The firm owns more than 129,000 bitcoin tokens and could face a margin call if Bitcoin stays below the $21,000 mark and be forced to liquidate its bitcoin holdings. More - MicroStrategy, a business intelligence maker, took out a loan to buy Bitcoin; the company is now facing a growing threat of a margin call, which is when a borrower has to commit more funds to avoid losses on an investment made with borrowed funds.
- The software firm may post additional collateral for a Bitcoin-backed loan; the company already secured a $205M loan in March 2022 to buy more Bitcoin.
- The value of the collateral was worth around $820M, which has fallen to half. Therefore, the company would need to provide more capital to back that loan.
- The company's filing indicates digital holdings of $1B after it paid $4B to buy 130,000 BTC over two years.
- Last month, Phong Le, MicroStrategy's president, said that Bitcoin would need to reach around $21,000 before the company would have a margin call. To avoid this from occurring, the company will "contribute more Bitcoin to the collateral package, so it never gets there."
- Michael Saylor, CEO of MicroStrategy, said in a tweet that the company "anticipated volatility and structured its balance sheet so that it could continue to #HODL through adversity."
CNBC 
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Coinbase announced that it is laying off 1,100, about 18% of its staff, ahead of the crypto winter. CEO Brian Armstrong says, "We appear to be entering a recession," which could lead to another crypto winter and last for an extended period. More: - The company had hired additional staff by 300% at the start of 2021. "It is now clear to me that we over-hired," says Armstrong.
- Coinbase is laying off a fifth of its staff as the downturn in the crypto market continues, and the value of Bitcoin dropped briefly to $21,000 Tuesday morning.
- The company has a total headcount of 5,000 employees, translating to 1,100 people being laid off.
- Coinbase joins Gemini, BlockFi, and Crypto.com in staff cuts. "Our employee costs are too high to manage this uncertain market effectively," Armstrong said.
- Shares have also dropped by 79% this year and 85% from the all-time high; the company has also seen a decline in its user base in the last quarter and a drop in 27% revenue over a year.
CBC
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Binance has partnered with Splyt, which will allow users to pay for taxi services and food deliveries using crypto. Binance users will have access to ride-hailing, bike-sharing services, scooters, airport transfers, public transport, and restaurant delivery in global markets. More: - Binance CEO Changpeng Zhao tweeted, "book your ride with Binance and pay in crypto (no need to convert to fiat)."
- Binance will officially become the first crypto company to offer ride-hailing service to its 90 million users in 150 countries, who will have access to this service within the Binance app.
- Splyt is a super app enabler and the leading on-demand services network for mobility services in over 150 countries, with over 300,000 trips issued on its platform. Its on-demand network reaches billions of global smartphone users, with partnerships including Alipay, Grab, Booking.com, and many more.
Nasdaq
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New York City Mayor Eric Adams wants Gov. Kathy Hochul to veto the anti-Bitcoin mining bill that imposes a two-year moratorium on Bitcoin mining plants in New York. The state legislature passed a controversial bill on June 3 that bans all Bitcoin mining operations powered by carbon-based sources. More: - The bill rests in the hands of Gov. Hochul, who may sign it into law.
- The bill aligns with New York's commitment to reduce greenhouse gas emissions by 85% by 2050 under the Climate Leadership and Community Act.
- If passed into law, then New York would become the first U.S state to ban Bitcoin mining operations that rely on carbon-based energy. Hochul has until Dec. 31 to make a decision.
- Adams believes that the ban would impede the growth of the Bitcoin mining industry in the country and said: "I'm going to ask the governor to consider vetoing the bill that is going to get in the way of cryptocurrency upstate. When you look at the billions of dollars spent on cryptocurrency – New York is the leader. We can't continue to put barriers in place."
- The mayor has also called for the removal of BitLicense, due to its strict rules that he says will stifle innovation and economic growth in the region.
Crypto Potato
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Chain.com's token dropped in value by 96% in 24 hours but immediately recovered its losses. A market marker and API error resulted in bids stuck via API orders, causing a sudden drop in token price. More: - A developer at the company wrote in a tweet: "There seems to have been a large margin call on XCN markets. We are working with exchanges and our market makers to identify the issues."
- Developers later confirmed that there was no breach or exploit on the network, and prices began to recover. Over 500 million XCN tokens were liquidated in a short span.
- It is important to note that token prices do not always correlate on a proportional basis with changes in the overall supply and demand.
Coin Telegraph
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Stu Alderoty, Ripple's general counsel, accused the SEC of trying to "bully, bulldoze, and bankrupt" crypto innovation in the U.S. and expand its own regulatory and jurisdictional limits. More: - Alderoty states that: "By bringing enforcement actions — or threats of potential enforcement — the SEC intends to bully, bulldoze, and bankrupt crypto innovation in the U.S., all in the name of impermissibly expanding its jurisdictional limits."
- The SEC is treating every cryptocurrency like a security, which amounts to a further assault on the industry during the downturn, Alderoty said. Alderoty adds: "Like a hammer wanting everything to be a nail, the SEC is keeping everything murky so it can argue every crypto is a security."
- Ripple Labs has been in a legal battle with the SEC since Dec. 2020, when the regulator filed a lawsuit claiming that Ripple executives used XRP to raise capital when it was unregistered security back in 2013.
- Ripple's Director of Corporation Finance, Robert Hinman, argued in a speech to the SEC that XRP is a non-security due to being "sufficiently decentralized," similar to Ethereum and Bitcoin. The SEC countered the argument by saying that the speech was based on Hinman's personal view, which contradicts the view of the regulator.
- Stuart Alderoty wrote a tweet saying it's been: "Four years since the (in)famous Hinman speech, and we're nowhere closer to knowing how to classify digital assets in the U.S. — keeping every crypto, including ETH, in regulatory limbo. I penned some thoughts for Fortune, why enough is enough, @SECGov."
Coin Telegraph
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 |  | Gia Mattu is based in Calgary, Alberta. She is an entrepreneur with experience in climate technology, drones, AI, machine learning, and blockchain technology. When she's not working, she loves to hike the Canadian Rockies, try new cuisine, and travel. | | | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 Ford. | |
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