The UK Treasury Committee has launched an inquiry into crypto-assets.

Calling for submissions of written evidence, it intends to explore the role of crypto-assets in the UK, as well as the opportunities and risks they bring to consumers and businesses.

It will examine whether cryptocurrencies are likely to replace traditional currencies, what opportunities and risks the use of crypto-assets pose for individuals and the economy, and their impact on social inclusion.

MPs will also explore how regulation could be balanced to provide protection for consumers without stifling innovation.

The Committee will seek to investigate whether regulation could benefit crypto-asset startups by improving consumer trust and resilience, and the potential impact of distributed ledger technology on financial institutions, including the Bank of England.

MPs are also interested in hearing from stakeholders and experts on how Governments and regulators in other countries are approaching crypto-assets, and what lessons the UK can learn from overseas.

At the end of May, the UK Treasury proposed legislation to regulate cryptocurrency companies in a consultation paper published in the wake of the Terra LUNA crypto and UST stablecoin collapse, which sent the entire sector into a downward spiral.

The paper highlighted the importance of stablecoins in innovation but also their impact upon wider financial stability, should systemic failures occur. The new rules as proposed would give the Bank of England with oversight over cryptocurrency firms, with the power to appoint an administrator in the event of a failure.

However the turmoil at the head of government, with Prime Minister Boris Johnson eventually resigning following the exit of many within his Cabinet, may put these plans on hold for some time.

Has the crypto crash undermined public trust in Web3?

“Crypto-assets have the potential to bring new and innovative changes to the UK financial system, the economy and broader society. However, there are also significant concerns around their use to launder funds, purchase illegal products, and evade international sanctions,” said Mel Stride MP, chair of the Committee.

“In recent months, the value of most crypto-assets has fallen dramatically. As a Committee, we will be investigating the opportunities and risks that crypto presents, where additional regulation may be required, and the lessons the Government can learn from other countries.

“We look forward to receiving written evidence from experts and interested stakeholders on this important topic.”

Cryptocurrency shorts

5ire, a blockchain layer 1 network focused on sustainability, has raised $100 million in Series A funding from UK-based Sram and Mram. 5ire, which is incorporated in Dubai, will expand into Asia, North America and Europe while keeping India as its operational hub. The funding values the company at $1.5 billion. Coining the term Proof-of-Benefit, it seeks to incentivise practices that align with the United Nations Sustainable Development Goals.

Non-fungible token marketplace OpenSea is to lay off a fifth of its staff, expected to be hundreds of people, due to the ‘unprecedented’ combination of crypto winter and macroeconomic downturn. CEO Devin Finzer wrote to employees: “We need to prepare the company for the possibility of a prolonged downturn. The changes we’re making today put us in a position to maintain multiple years of runway under various crypto winter scenarios (5 years at the current volume), and give us high confidence that we will only have to go through this process once.”

Marius Ciubotariu, co-founder of Hubble Protocol, says bad risk management caused crypto lender Celsius to file for bankruptcy, adding: “Its retail user base had no clarity on how their money was being used and have now no doubt lost faith in Celsius and similar platforms. As strange as this sounds right now, all of this is a really positive signal for decentralised finance at large: we are seeing the fruits of complete transparency on the blockchain… unfortunately, no smart contract could block people from being over-invested or speculating.”

Web3 gaming company UnCaged Studios has raised $24m in a Series A equity funding round, with participation from Griffin Gaming Partners, Vgames, Maverick Ventures Israel, Drive by DraftKings and 6th Man Ventures. It will use the funding to develop its Solana-based esports franchise MonkeyLeague ahead of public launch at the end of the year. 

Virtual avatar company Hologram has raised $6.5m in seed funding led by Polychain Capital and featuring Nascent, Inflection, The Operating Group, Quantstamp, Neon DAO, Foothill Ventures, South Park Commons and several angel investors, including Linkin Park’s Mike Shinoda. It partners with online communities to foster self-expression and digital identity in the metaverse.

Despite a backlash within the gaming community, a new survey claims a third of gamers have expressed interest in using crypto in the Metaverse. Globant commissioned the survey from YouGov which polled 1,000 adult PC, console and/or mobile gamers last month. It also found more gamers than not believe the metaverse will have a positive impact on gaming, while 16% have purchased NFTs in the past.

Hang, a Web3-powered platform that connects brands with members, has raised $16m Series A funding led by Paradigm and gone live. Other investors include Tiger Global Management, Thirty Five Ventures, Night Ventures, Warby Parker and Good Friends. It uses NFTs to incentivize customers with rewards and perks.

Diego Maradona is coming to the metaverse after UK-based Podium Ventures won the rights to develop the worldwide brand of the late Argentina football legend. It will have a particular focus on Web3, the gaming sector and the metaverse, with MetaFrames developing a fan club around a virtual version of Maradona.

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Crypto prices

The overall market cap of the more than 20,200 coins is at $927.2 billion at the time of writing (7am UK), a 3.4% increase in the last 24 hours.

Market leader Bitcoin – the original cryptocurrency created by the mysterious Satoshi Nakamoto – gained 3% to $20,630. BTC is 6% down in a week.

Ethereum, the second most valuable crypto coin – created as a decentralised network for smart contracts on the blockchain – rose 9% to top $1,200. ETH is 3% down over the course of a week.

Binance Coin is a cryptocurrency created by popular crypto exchange Binance to assist its aim in becoming the infrastructure services provider for the entire blockchain ecosystem. Its BNB token added 3% to $238, leaving it 2% down over seven days.

The XRP token of Ripple, a payment settlement asset exchange and remittance system, acts as a bridge for transfers between other currencies. XRP gained 6% to 34.1 cents, with its price 3% down on seven days ago.

Cardano is an open source network facilitating dApps which considers itself to be an updated version of Ethereum. Its ADA token, designed to allow owners to participate in the operation of the network, rose 3% to 44c and is 7% down in a week.

Solana is a blockchain built to make decentralised finance accessible on a larger scale – and capable of processing 50,000 transactions per second. Its SOL token jumped 8% to $37.12 and is 2% lower than its price a week ago.

Meme coin DOGE was created as a satire on the hype surrounding cryptocurrencies but is now a major player in the space. DOGE climbed 3% to approach 6.3c, leaving it 12% down in a week.

Polkadot was founded by the Swiss-based Web3 Foundation as an open-source project to develop a decentralised web. Its DOT token, which aims to securely connect blockchains, grew 4% to $6.72 and is 7% down on its price a week ago.

Avalanche is a lightning-quick verifiable platform for institutions, enterprises and governments. Its AVAX token rose 6% to $19.78 and is 2% down in a week.

To see how the valuations of the main coins have changed in recent times – and for round-ups of recent cryptocurrency news developments – click here.

For valuations of the top 100 coins by market cap in US dollars, plus 24-hour price change, see below.