- Bitcoin recovers to USD 5,100 levels after a sudden crash on Black Thursday
- MakerDAO stakeholders believe a shut down is still only a remote possibility even with current ETH prices
- Blockchain analysis has helped indict a darknet site owner who hosted videos and images of violent crime against women
The market woes are not quite over yet, with Bitcoin threatening to reach even 2019 lows when it crashed to USD 3,876 today (CoinDesk) before almost instantly recovering to USD 5,100 levels where it is currently trading.
Coronavirus fears may have been arguably responsible weeks ago for the calamitous state of crypto markets but it is well and truly the cause of everything bad happening to the global economy now, although one has to say, this unlikely convergence of events could not have been predicted at the start of the new year.
On the back of weakening economic growth everywhere, especially in the US and in Europe, and trade tensions with the US and China, and political strife in Iran and elsewhere, the coronavirus health crisis will now be remembered for breaking the camel’s back in 2020. Nevertheless, the fact that crypto is actually still standing amid all these negativity is in itself a show of strength, and there is every bit of chance that once things recover, so will the crypto market.
One piece of good news is that one of the biggest decentralized finance (DeFi) platforms in the world, appears unlikely to shut down even with record losses experienced in the crypto market.
MakerDAO, which currently has the biggest market share in Ethereum-based DeFi, is standing strong in response to what is now being called Black Thursday. MakerDAO Foundation members discussed what Ether’s price drop had done to the lending protocol but concluded that a complete shut down was likely not to happen.
MakerDAO basically lends a stablecoin called DAI to people who put up their ETH as collateral, which is then automatically sold by the protocol as price goes down. What happened in the past two days, as ETH lost over 50% of its price, the losses had been too fast for the protocol’s auctions to keep up. But for now, MakerDAO stakeholders are saying it’s too early to avoid disabling the protocol. Ryan Berckmans, an Ethereum developer, said:
“An emergency shutdown (not happening now) would cause DAI holders to take a haircut, whereas the social contract of MakerDAO is that MKR tokens take a haircut in the event of system failure. Therefore we should try and ensure that MKR holders take a hair cut by avoiding emergency shutdown if possible. I heard that emergency shutdown is not being considered as an immediate option.”
Another developer known as LongForWisdom on a call discussed that the shutdown was still a very remote prospect, although should ETH touch USD 80, it might have to come into consideration. He said: “If Ether price drops another 30, 40%, then we might be looking at that.”
The message, for now, is: nothing to worry about. Yet.
Meanwhile, blockchain technology has helped a Federal Grand Jury in the District of Columbia to indict a Dutch citizen known as ‘Mr Dark’ for hosting violent rape and child pornography videos. Michael Rahim Mohammed, 32, allegedly operated the ‘Dark Scandals’ website since 2012 on both the web and on the darknet, hosting over 2,000 videos and stills of “real blackmail, rape and forced videos of girls all around the world”.
Authorities used Bitcoin and Ether transactions paid to the website, analyzing them on the blockchain to track down the owner. Reportedly, they were able to track 303 Bitcoin and Ethereum accounts that paid cryptocurrency to the site using blockchain forensics software from the firm Chainalysis. There is now already a forfeiture complaint that hopes to recover these funds to be given onwards to the victims of this crime.
In fact, the blockchain analysis has helped enforcement agencies to identify other illicit transactions too. A press release from the Department of Justice reads:
“Law enforcement observed numerous payments from these accounts to other darknet markets, which were flagged by blockchain analytics companies, enabling law enforcement to identify illicit transactions.”
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