This week in Crypto: Week of February 17 

We cover weekly key developments in the world of crypto assets and blockchain that have influenced price action and general sentiment.

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Illustration: Milica Mijajlovic

Investment developments  

Crypto prices climbed for a third straight day until February 16, with Bitcoin (BTC) nearing the level of $25,000, a level not seen since August 2022. Meanwhile, Ethereum (ETH) crossed the $1,700 mark.  

The run in cryptocurrencies has led to a jump in Bitcoin funding rates on margin positions. This positive development indicates that speculators are getting bullish on BTC. Similarly, there was an increase in liquidations of BTC’s future short positions. Analyzing the data, we could speculate that more retail investors are looking to buy BTC.  


BTC funding rates. Source: 

Equally important, we’ve seen a jump in the number of active BTC addresses, indicating that a jump in price is raising the activity in the overall BTC ecosystem.  


Following the jump in crypto prices, the US Securities and Exchange Commission (SEC) sued Terraform Labs on February 16, the firm that released the now tragic TerraUSD algorithmic stablecoin. The filed complaint also encompasses the firm’s co-founder, Do Kwon.  

SEC Director of Enforcement Gurbir Grewal said in a press release that the project was a scam.  

“It was simply a fraud propped up by a so-called algorithmic ‘stablecoin’ – the price of which was controlled by the defendants, not any code,” Grewal said. 

This move by the SEC represents a further crackdown and harsher stance the US government is taking on cryptocurrencies.  

Finally, the Crypto Fear and Greed Index, which uses six measurements to assess the current sentiment in the markets, shows that the markets are dominated by greed, as indicated by a rating of 61. The index rates market emotions from 1, extreme fear, to 100, extreme greed.  


Crypto Fear & Greed Index. Source: Alternative 

These recent readings suggest that risk appetites are moving more to the right, which could signal a new bull run in crypto. However, caution should be warranted as SEC and US Federal Reserve (Fed) could represent a knockout 1-2 punch for the broader markets with the attempts to reign in inflation.  

Crypto Exchange developments  

The news surrounding one of the biggest crypto exchange implosions, FTX, keeps on coming. This week, the released new court documents revealed the two mysterious co-signers of FTX founder Sam Bankman-Fried’s bond (jail bond).  

Andreas Paepcke and Larry Kramer were the mysterious benefactors of Bankman-Fried, until now. Paepcke is a senior research scientist at Stanford University, and Kramer previously served as the dean of Stanford Law School. The two of them put up $200,000 and $500,000, respectively, to pay the bail for the release of Bankman-Fried. 

Digital asset investment firm NovaWulf Digital Management stepped up and bought the lending operation of the distressed crypto lender Celsius. Debtors of Celsius laid out their plan for the sale of assets to the US Bankruptcy Court. If all goes as planned, Celsius is set to start returning crypto assets to customers in June. Note that Celsius has a $1.2 billion hole in its balance sheet; therefore, fractional returns of assets are possible. 

Debtors will be wise to temper their expectations when it comes to getting all their assets back.  

According to records reviewed by Reuters, over the first three months of 2021, over $400 million flowed from Binance.US accounts to Merit Peak, a trading firm linked to Binance’s CEO Changpeng Zhao (CZ). Meanwhile, SEC launched a probe in 2022 to look into Binance US’s relationship with trading firms Sigma Chain AG and Merit Peak. 

Web3 developments 

French The Centre Pompidou, a major modern art museum is looking to showcase NFTs during the summer of some of the more prominent digital artists, in a permanent exhibition. In a statement made by the museum the plan is to showcase popular NFTs such as CryptoPunk #110 and Autoglyph #25. Both of these popular NFTs have been donated to the museum. Xavier Rey, director of the French National Museum of Modern Art, which donated the two NFTs noted

“Web3 is an innovative territory that artists have now seized upon to create original and daring work, and this collection reaffirms our support for artists in their conquest of new means of expression, which is the foundation of modern art.” 

In other NFT-related news, eBay’s NFT marketplace KnownOrigin will launch smart contracts for its artists, according to a recent tweet. This will be an important innovation for artists as it will allow them to split earnings and earn royalties as co-creators.   

A marketplace that beat our OpenSea’s trading volume over the past month, airdropped tokens on its platform for Valentine’s day. This move was one of the major reasons why NFT sales rose over 8.5% during the week ending on February 17. The sales rose by $304 million, compared to $280 million last week. Valentine’s day accounted for over 30% of the sales in the week.    

DeFi developments 

February 16 saw a “flashloan” attack on the Platypus DeFi platform. The attack led to Platypus USD stablecoin de-pegging from the $1 value all the way down to $0.48. It is estimated that losses amount to $8.5 million.  

Platypus confirmed the hack on their official Twitter account.  

“We regret to inform you that our protocol was hacked recently, and the attacker took advantage of a flaw in our USP solvency check mechanism. They used a flashloan to exploit a logic error in the USP solvency check mechanism in the contract holding the collateral.” 

Despite the unfortunate news surrounding Platypus, the total value locked (TVL) in DeFi surpassed $50 billion on February 16 for the first time since the implosion of FTX. The leader among DeFi platforms is still Lido, making up 17.18% of the total TVL in DeFi. Furthermore, this week, ending February 17, 60% of TVL is tied to Ethereum. WBTC, Multichain, Justcrypto, and Portal were the largest protocol bridges in terms of value locked. At the time of writing, in the last 24 hours, over $3.6 billion has been processed through decentralized exchanges.  

Tech developments 

Chinese tech giant Tencent is looking to disband its extended reality (XR) department, according to reports from the Chinese news outlet 36 Krypton. The department housed over 300 employees across 9 offices, making this the largest layoff in the metaverse niche to date. Back in January, Tencent announced that they were suspending the work of their XR department, but the huge layoff surprised many metaverse analysts.  

Tencent seems to be following in the footsteps of Microsoft, which also laid off its metaverse division on February 9. 

Cardano and ADA holders were given an early Valentine’s day present, with the Valentine upgrade to the project. This upgrade was pushed in the early morning hours on Wednesday, February 15. It was named Valentine’s and it will enhance cross-chain functionality for DeFi applications on the Cardano network. 

Plutus, Cardano’s smart contract platform will stand to benefit the most, as the upgrade allows better cryptographic features to be deployed on decentralized applications (dApps) that are being developed on Cardano’s blockchain.