Weekly Digest: Meta Winds Down Diem, Fed Points to Stablecoin Risks

What happened with to crypto market this week

Solana-based cross-chain protocol Wormhole suffered an attack from hackers, losing as a result 120,000 WETH tokens (more than $319 million) from its backend.

The developers said that they fixed the vulnerability and sent "additional ETH" to the pool in order to provide liquidity support. During the investigation of the incident, the team suspended access to the service.

The shares of Meta (formerly Facebook) plunged 23% during Wednesday’s trading session, CNBC reports. The company reported for the first time ever a decline in the number of daily Facebook users. In the fourth quarter, Meta's earnings per share were $3.67, while analysts had expected $3.84. The decline in the number of daily active users (DAU) amounted to 1.93 billion versus the 1.95 billion expected.

Meta sold the Diem Association and its intellectual property to Silvergate Capital Corporation.While the financial terms of the deal have not been disclosed, sources said the parties had agreed on the $200 million mark. As a result of the deal, Meta plans to return capital back to its investor members.

Russians own over $214 billion worth of cryptocurrencies, Bloomberg reports, citing estimates from the Kremlin and government officials. Subscribe to our Telegram channel to stay up to date on the latest crypto and blockchain news. While it remains unclear how exactly the authorities got the numbers, sources close to the matter claim the figures were calculated by analyzing the IP addresses of the biggest cryptocurrency exchange users. If calculations are correct, Russia represents over 10% of the total cryptocurrency market capitalization.

The US Federal Reserve System (Fed) released a report examining the threats and impact of stablecoins on the US monetary policy and credit system. The researchers pointed out the "safe haven currency during periods of crypto market distress" and the risks that may arise under the conditions of their mass conversion to fiat money. Specialists also recommended conducting an audit and establishing requirements for liquidity and quality of reserves in order to mitigate risks.

Chainalysis, a blockchain forensic firm, found that the market of non-fungible tokens (NFTs) is indeed a subject of "significant" wash trading that artificially increases the value of the digital collectibles. The analysts say NFTs offer potential for abuse as the technology is still in its early innings.

MicroStrategy boosted its bitcoin reserves with another purchase of 660 BTC for approximately $25 million in cash. According to a regulatory filing, the latest purchase brought the company's total holdings to 125,051 BTC worth ~$4.8 billion with an aggregate purchase price of $3.78 billion.