A number of cryptocurrency platforms around the world face the credit crisis: high leverage investment may be gone

21st Century Business Herald reporter Hu Tianzheng Shenzhen Report

Bitcoin has not stabilized at the top of 22,000 US dollars/dollars this week. The cryptocurrency lending platform and exchanges have continued to spiral dome. The development of the industry is shifting from excessive prosperity to stable market emotions.

Luna and Terrausd's axis is anchoring the hedge fund, Three Arrows Capital, and the failure of Sanjian Capital has brought serious pain to the entire encrypted credit industry, and Vault, Voyager Digital, Blockfi And CELSIUS is the most direct or indirect.

The global central banks, which have always been particularly vigilant in the field of encryption, are rare in time. After emphasizing the speculative attributes of cryptocurrencies in the annual report of the International Clearance Bank, the latest statement comes from the Fed Vice Chairman Brened and Europe's highest securities regulatory agencies.

"The recent cryptocurrency fluctuations have exposed a serious loopholes in the industry that requires stricter supervision." Brener said on Friday that although the encrypted financial system was touted as a fundamental breakthrough in traditional finance, it turned out that it was also easy to be easy Affected by the risks of traditional finance too familiar, such as leverage, settlement, opacity, and duration and liquidity conversion. "It is important to solve any gap between non -compliance problems and possible (with traditional financial markets)."

Verena Ross, chairman of the European Securities and Marketing Administration, said on Saturday that Europe cannot provide bailout for investors who are out of their pockets. "We have seen the real risks of the market's reaction to the changing economic environment." He added that regulators are trying to understand where the risks may occur so as to realize what major market adjustments that may occur.

Circle interlocking spiral liquidation

In recent months, the price of cryptocurrencies has fallen sharply, which has seriously crack down on the "prosperity" cryptocurrency loan market.

Terrausd is decoupled from the US dollar at 1: 1. The LUNA plummeted joint reflection occurred at the end of May, but its impact continued, causing a chain response in the digital asset world, and seemed to exacerbate traces.

The first Domino bone card is Celsius, which has a huge opening in Terrausd. On June 13, local time, Celsius said that due to extreme market conditions, the platform will suspend all the transfer of withdrawals, transactions and account transfer; on June 30, the agency said that consultants have been hired and are considering reorganization debts. As of May this year, CELSIUS provided more than $ 8 billion of loans to global customers, with a management assets of nearly $ 12 billion.

Singapore's large hedge fund -Sanjian Capital, under the plunge of LUNA, was in trouble because it could not meet the requirements of additional margin. Sanjian Capital has previously managed $ 100 billion in assets. It is one of the most active investment institutions in the cryptocurrency field. The founder is known for its leveraged betting of cryptocurrency prices.

Voyager and Blockfi, which provides loans for Sanjian Capital, were subsequently implicated. Affected by the bankruptcy and liquidation of Sanjian Capital, the Canadian cryptocurrency broker Voyager Digital has announced that it will suspend transactions, deposits, withdrawals, and loyal rewards.

For losses, Sanjian Capital had borrowed $ 675 million in Voyager Digital in the form of 15,250 Bitcoin and USD Coin in the form of USD Coin. Voyager Digital said it is actively seeking remedial measures to recover funds. In addition, Zac Prince, co -founder of Blockfi, revealed that the loss directly related to Sanjian Capital was about $ 80 million, and emphasized that this is only "a small part of the loss reported by others." Blockfi announced that it was planned to lay off one -fifth in June.

The credit crisis continues to ripple this week. On July 4th local time, Vault, which was also blessed by Coinbase, suspended its withdrawal, transaction and deposit activities on its platform, and explored potential restructuring plans. The company said that in the past three weeks, panic investors have withdrawn nearly $ 200 million from Vault, and Vault has frozen operations. Vault, headquartered in Singapore, provides customers with an annualized return rate of up to 40%to borrow their cryptocurrencies. Vault CEO Darshan Bathija said that the group is currently discussing with potential investors and will apply to Singapore courts to suspend it to provide gasp for restructuring.

On July 6, local time, Voyager Digital announced the application for bankruptcy protection. The company's CEO Stephen Ehrlich said that although it is optimistic about the future of the industry, the long -term fluctuations and spread of the encryption market in the past few months and the debating loan of Sanjian Capital have to take cautious and decisive actions. Voyager Digital said in court documents that he hopes to reorganize and return part of the customer's investment, and at the same time allow them to have the ownership of the company after the reorganization. According to the latest statement, customers will get cash after conducting "reconciliation and preventing fraud procedures".

Clear, freezing the withdrawal of capital, and the suspension of transactions. In order to stabilize the industry's confidence, FTX under Sam Bankman-FRied fills the gap through emergency loans and acquisitions. FTX has signed an agreement with Blockfi, including the Blockfi option for $ 240 million, and also provides Blockfi with a $ 250 million loan for Blockfi. Voyager Digital also obtained a cash and Bitcoin loan from FTX totaling $ 485 million. Sam Bankman-Fric also provided a loan of about $ 500 million in loans of about 500 million US dollars to the crypto asset broker Voyager Digital.

CELSIUS also immediately used 50,000 Ethereum (about US $ 66.34 million) and 9,500 WBTC (approximately US $ 242 million) in the liquidity crisis.

Lehman time and last lender?

As a symbol of excessive expansion, the encrypted credit platform has become a rigid example of the tightening of the prosperity cycle.

Crypto Compare data shows that by the end of 2021, the inflow of funds of the DEFI project has soared to nearly 230 billion US dollars.

In the second quarter of the Eukuyun Chain Industry Report, as the market value of encrypted assets continued to shrink, the TVL (total locking value) of Defi decreased significantly, from US $ 181.7 billion in the first quarter of the second quarter to $ 71.3 billion, the decline exceeded 60 %.

Sun Yulin, a senior researcher at the Okuyun Research Institute, said that the cold wave of the encrypted industry in the summer has caused well -known institutions in the DEFI field to usher in the dark moment under the "liquidity crisis".

Many factors cause the current situation. Sun Yulin concluded that Russia and Ukraine conflicts and the Federal Reserve can be regarded as multiple external factors in response to inflation, as well as the global strengthening of supervision of the encryption industry. The design of Defi itself is the key internal factor.

In the field of DEFI, no matter whether it is mortgage, pledge, or any other encrypted financial model, many DEFI protocols are nested with each other. The advantage of this is that the synergistic role of the DEFI protocol during the market stable period can generate a positive feedback of spiral rise for the encryption industry. Essence

Sun Yulin said that this chain response has also happened in the traditional financial market. The failure of large multinational financial institutions can form a huge "financial tsunami" in the world. It is difficult to estimate the huge damage.

Yu Jianing, co -chairman of the Blockchain Special Committee of China Communications Industry Association, said in an interview with the 21st Century Business Herald that during the transaction or interaction with the CEFI borrowing agency and the DEFI borrowing agreement, many users and even institutions did not treat these this. The liquidation risk in the transaction has met a detailed understanding, which leads to a large fluctuation in the crypto asset market, which causes liquidation to lose mortgage assets.

Yu Jianing said that a series of liquidation caused by the recent encryption lending field is the reason for the severe anchor and price plummeted black swan brought by Luna and USS, which has caused many heavy -duty Luna and UST institutions to have a capital liquidity crisis. The second is that the institution is too optimistic about the overall financial market and the encryption market, and the rapid decline in the market, as well as the DEFI's over -mortgage and circulation borrowing, has made many institutions in depth. "Just as the bull market will make people FOMO (afraid of missing). When an extreme market occurs, the market will also cause many people to be panicked, resulting in a significant selling and platform crowding."

"Fear will be contagious, and this is the case in any financial market." Said Brett Harrison, the president of FTX US, said that when music stopped, no one wanted to be the last person without a chair, so everyone was withdrawn.

The crisis of encrypted assets reveals the fragility of its credit and leverage system. It has doubts whether cryptocurrencies have experienced their own "Lehman" time, and this is similar to the credit crisis that swept the traditional financial industry in 2008.

However, there is no centralized central bank in the cryptocurrency field, so optimistic hope is pinned on the 30-year-old billionaire Sam Bankman-Fric, and the latter is also discussed whether it can give it the "last lender" industry. status.

But the move of Sam Bankman-Fric contains the factors of its own interests. For example, his trading company Alameda Research is the largest shareholder of Voyager, holding 11%of its shares.

Zhao Wei, a senior researcher at the Ouyi Research Institute, pointed out to the 21st Century Business Herald that SBF's "rescue behavior" is actually more inclined to be in the commercial expansion of the bear market period in the crypto market-through the continuous acquisition of the crypto industry companies that encounter crises, they will broaden The business line of its encrypted enterprises.

This is like the 2021 Japan Compliance Exchange LIquid, LIquid, received FTX's US $ 120 million borrowing after the theft, and was acquired by FTX a few months later, and then FTX successfully opened the Japanese market.

Zhao Wei does not agree with the media's so -called "Lehman time". From the perspective of investors, increasing leverage is high -risk behavior in itself. According to its explanation, it can be seen that the Lehman brothers and 3ACs in common are that the consistent venture capital strategy has occurred many times before the final event, which caused the final bankruptcy. It is essentially caused by the main venture capital strategy in the environment. In Jianing's view, the serial clearing crisis caused by LUNA in this encryption market can indeed be regarded as a small Lehman moment in the encrypted market. The influence of funds that are affected are also the forefront in the history of the encryption market.

The era of high leverage investment is gone

The global central bank is tightening the monetary policy. People realize that the encryption industry may be affected by prosperity and decline like other financial markets. More crypto companies face excessive credit risks. The spread of the cryptocurrency market is still high.

Zhao Wei pointed out that the three -arrow capital incident and the subsequent chain reactions reflected the problems not only limited to the supervision review of encryption credit, but also showed that the construction and improvement of the encryption market did not meet the expectations of investors, and their characteristics were closer to the closer to the investor. Early form of an investment market.

Sun Yulin said that from the perspective of the rise and development time, DEFI is far from being called a mature industry, and the DEFI field does not have a strong centralized role as the traditional financial industry: when the crisis comes, the traditional financial field The centralized regulatory agency can directly intervene to avoid infinitely enlarging the risk exposure; and in the field of DEFI, you can only watch some projects and institutions "free fall" under the chain reaction.

Sun Yulin said that the recent FTX founder SBF decided to reach out to Voyager, and maybe he could make short -term efforts for insufficient liquidity. Yu Jianing believes that Sam Bankman-FRied rescue Voyager Digital and Blockfi and other crisis companies are conducive to lift the potential crisis of the current encrypted industry and help the industry get rid of extreme markets.

But on the other hand, Yu Jianing reminded that many institutions have crisis in this market. In essence, it is not enough to understand the value logic and cycle of encrypted assets. Condition of funds. For such institutions, elimination in crisis may also be a process of clearing the market.

At present, due to the acquiescence of highly leveraged behaviors in the encryption market, its risks are far greater than the risks of traditional financial market transactions, which has exacerbated the instability and vulnerability of the crypto market. Yu Jianing said that in the future, the global crypto asset market will move towards mainstreamness, compliance, and institutionalization. This is an irreversible trend and will inevitably make more constraints on high leverage behaviors.

According to the long -term development, the market risk is appropriately exposed, and to clean the projects, but it is more conducive to subsequent sustainable development.

"In a short period of time, the speed of development of the encryption industry depends on the choice of investors and the level of supervision environment." Zhao Wei said, whether crypto technology can provide practical financial solutions in the future is the key to long -term development.

Zhao Wei believes that the ecology of the encrypted market is still in a early stage to be built compared to the traditional financial market. It also needs investors, practitioners, and regulators to give more development elements for the crypto market from their respective perspectives.

"In the long run, DEFI needs more transparent and sustainable business models and investment strategies." Sun Yulin said that even if this may make the high -yield era of most products be gone.

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