Minister Accepted Crypto With No Questions Asked

In March, Jirikovsky’s lawyer contacted Blazek to offer a third of the Bitcoin as a donation. Blazek accepted without investigating the cryptocurrency’s origins. At a press conference, he admitted, “I wasn’t interested so many years after the case.” But critics slammed the move as irresponsible, and authorities have now opened an official investigation.

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Government Distances Itself

Jirikovsky, convicted in 2017 for drug trafficking and other crimes, has been trying to reclaim 1,500 BTC seized during his arrest. Czech law enforcement suspected links to the now-defunct dark web marketplace Nucleus. As the backlash intensified, Prime Minister Petr Fiala distanced himself from Blazek. Facing rising political pressure, Blazek resigned on May 30, stating he did not want to harm the government’s image.

This controversy comes just months after the Czech President signed a major crypto law aligned with the EU’s MiCA framework—intended to clarify regulations and support innovation in the digital asset space.

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Terra PTSD Resurfaces

Andre Cronje, co-founder of Sonic Labs and founder of Yearn.finance, shared the news in a March 22 X post. He claimed that Sonic’s new stablecoin could offer up to 23% annual percentage rate (APR), depending on total value locked (TVL).

He noted:

“POC looks good. Yielding > 200% APR @ 10m TVL, around 23.5% APR @ 100m, steady at around 4.9% at 1bn+. Will scale up and get team for a full release.”

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Despite the optimism, Cronje admitted to having PTSD from previous algorithmic stablecoin failures:

“Pretty sure our team cracked algo stable coins today, but previous cycle gave me so much PTSD not sure if we should implement.”

A Grim Reminder: Terra-Luna Collapse

In May 2022, the $40 billion Terra ecosystem collapsed after its algorithmic stablecoin, TerraUSD (UST), lost its peg. The once top-10 crypto LUNA plunged over 98% in value, from over $120 in early April to $0.84.

What Makes Sonic Different?

Sonic claims to be the world’s fastest Ethereum Virtual Machine (EVM) blockchain, delivering true 720 milliseconds (ms) finality. Sonic’s testnet achieved this milestone on September 8, 2024.

In the wake of Terra’s collapse, the European Union’s MiCA regulation is set to prohibit algorithmic stablecoin issuance, aiming to prevent another disaster.

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The post Sonic Introduced Its Stablecoin: Is the Luna Nightmare Coming Back? appeared first on Coin Engineer.

Ardoino points out that under MiCA, a large portion of the stablecoin issuers’ assets in banks in Europe will be converted into loans, which could put a large portion of the issuers’ reserves at risk in the event of a bankruptcy. For example, if Tether manages €10 billion, €6 billion of that would need to be held in banks. However, the fact that banks can distribute 90% of this amount as loans creates potential risks to the adequacy of stablecoin reserves.

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Ardoino, on the other hand, states that under the MiCA framework, stablecoin issuers can protect themselves against the risk of bankruptcy. As a suggested solution, he emphasizes that reserves can be secured by purchasing securities such as treasury bonds or government bonds in addition to bank accounts.

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