Ethereum

Ethereum ETFs May Have Ended the SEC’s War on Crypto

Published

8 months ago

3 June, 2024

Ethereum ETFs May Have Ended the SEC's War on Crypto

About the Author

Carlo D’Angelo is a lawyer, former law professor and crypto and NFT enthusiast. Carlo’s practice focuses on advising clients in all areas of blockchain technology law. Carlo is also the host of Lex Line, a weekly podcast on crypto and blockchain law.

The opinions expressed here are his own and do not necessarily represent those of Decrypt.

that of May Ethereum spot ETF approval by the United States Securities and Exchange Commission (SEC) was the final blow to what can only be described as a record month for crypto policy – and the move could seriously jeopardize the The SEC’s Ongoing Crypto Crackdown.

As the deadline for approval of Ethereum ETFs approached, a bipartisan group of members of the House of Representatives sent a letter to SEC Chairman Gary Gensler urging the Commission to not only approve the funds, but also consider approving “other” digital asset ETFs in the future. And finally, the SEC finally went public late on that fateful Thursday and announced the approval of eight one-time Ethereum ETF applications.

According to Paul Grewal, Coinbase’s chief legal officer, the SEC’s approval of spot ETFs effectively considers Ethereum (ETH) to be a commodity. If Grewal is right his assessmentthen an ETH commodity would fall under the oversight of the Commodity Futures Trading Commission (CFTC), as opposed to the SEC, which is responsible for regulating securities.

This is a key distinction for ETH because the SEC’s mandate is to police securities and protect investors. Rather, the CFTC regulates commodities such as raw materials and agricultural products, with a focus on preventing market manipulation and fraud. The CFTC’s regulatory framework for commodities is therefore generally less strict than the SEC’s treatment of securities.

This week, this day, was a roller coaster unlike any other I have seen. ETH is effectively considered a commodity as we have always known it. I am proud to be part of the team @Coinbasethe trusted partner and custodian of many issuers including 19b-4s approved this evening. pic.twitter.com/nz1HHFbBSQ

– paulgrewal.eth (@iampaulgrewal) May 23, 2024

As digital assets continue to see mass adoption, there remains an ongoing debate over which federal agency should have jurisdiction over the regulation and enforcement of this new and innovative technology.

In 2021, former CFTC Commissioner Dawn Stump Gave a speech on the now infamous Case of XRP SEC enforcement measuresand noted that she was “closely monitoring the outcome of this case as it would help establish the scope of the SEC’s authority in the area of digital assets.”

Commissioner Stump added:

Regulatory enforcement of digital assets, like the assets themselves, is evolving every day. This is exciting, but also frustrating for those seeking more certainty. But the incredible transformation of this space requires adaptation and creative thinking, and, let’s be honest, that’s not a regulator’s natural inclination. …This is where the regulatory state of digital assets currently stands: we need to enable innovators to think creatively so that the story can evolve, we need to recognize that there will be divergences in opinion as to the usefulness and potential of different products, and we should expect some storms to arise. It is these considerations that should guide us, as regulators, in exercising the powers necessary to fulfill our mission so that the market can develop and reach its full potential.

Perhaps the approval of the Ethereum ETF brings exactly the kind of regulatory clarity this industry has been looking for. If ETH and other similar cryptocurrencies are not securities, the SEC does not have jurisdiction to regulate these assets under the Securities Act of 1933 and the Securities Exchange Act of 1934.

This means that the SEC can no longer assert that these tokens are investment contracts under the Howey test. If ETH and similar tokens are commodities, then crypto lawyers could argue in court that these cryptocurrencies are not investment contracts that come with an “expectation of profits from the efforts of others” – critical elements that the SEC must prove under the Howey test.

Importantly, by tacitly acknowledging that Ethereum is a commodity, the SEC may have just undermined its own legal arguments raised in several ongoing crypto enforcement court cases.

If the courts are receptive to ETH and potentially other cryptocurrencies being commodities, then that could turn the tide of the SEC’s ongoing lawsuits against major crypto trading platforms like Coinbase and Kraken. These lawsuits rely on the SEC’s argument that certain tokens traded on these platforms are securities. But if Ethereum and similarly situated tokens are instead commodities, then that could green light a new motion to dismiss the SEC’s lawsuits against Coinbase and Kraken.

If the federal judges in these cases agreed with this argument, it would essentially weaken the SEC’s claims that Coinbase and Kraken both offer trading in unregistered securities.

Such a move would deal a devastating blow to SEC Chairman Gary Gensler, who is already facing intense scrutiny from critics who say his aggressive approach to enforcement regulation is stifling the industry’s growth. of digital asset technology in the United States and drives innovation. abroad to more favorable jurisdictions.

As noted in Grewal’s recent article Post to Twitter (aka X)Now that the SEC has effectively stated that “sales of ETH cannot be securities because Ethereum ETFs can be registered by funds with an S-1”, the SEC has essentially agreed that ETH no longer has “ecosystem” than Bitcoin.

The SEC’s recent approval of Ethereum ETFs has profound potential implications for ongoing and future legal battles in the digital assets sector. By suggesting that ETH and other similarly situated tokens are commodities, the SEC may have significantly limited its power to aggressively police the crypto industry.

The Ethereum ETF’s decision could therefore further encourage players in the digital asset industry to resist overzealous enforcement, leading to fewer settlements and more court battles.

Getting long-awaited clarity on whether ETH is a security or commodity could also narrow the SEC’s jurisdiction over Ethereum and other similarly situated cryptocurrencies. This in turn could lead to a dramatic narrowing of the SEC’s regulatory reach in the digital assets sector. Crypto lawyers will no doubt use the ETF decision to aggressively push back against ongoing SEC enforcement actions and lawsuits, and argue that the agency has overstepped its mandate.

If more digital assets are treated as commodities similar to what the Ethereum ETF decision suggests, then lawmakers could finally pass laws to significantly reduce the SEC’s reach over these assets. As a result, these tokens could be subject to potentially less strict regulation under the CFTC. Such a change in agency oversight would create fewer regulatory hurdles for crypto startups and foster a new wave of innovation in this sector.

Crypto lawyers will likely leverage the ETF decision to reshape existing strategies with respect to how they advise clients in the digital asset space. These strategies may include advising crypto clients to place greater emphasis on the tradable nature of their tokens and platforms, in an effort to better protect them from SEC reach.

If Coinbase and Kraken’s legal defense teams succeed in dismissing pending SEC lawsuits based on the Ethereum ETF decision, then this could generate very favorable legal precedents that would influence future regulation of the crypto industry. digital assets and would pave the way for a new wave of blockchain innovation. in the USA

A new era of clarity regarding digital asset laws would also benefit investigators and attorneys employed within the SEC and CFTC, creating a potentially more predictable and stable regulatory environment. This would result in a more efficient use of agency resources, as opposed to the legally ambiguous environment in which we currently operate. Regulatory clarity would also bring much-needed consistency to judges presiding over digital asset cases and generate more consistent and predictable outcomes.

I strongly believe that crypto lawyers are the gatekeepers of blockchain and play a vital role in the continued growth and adoption of crypto technology in the United States. The recent Ethereum ETF decision will only allow crypto lawyers to better advise and guide clients in the digital assets sector – and I’m excited to see how they creatively use this opportunity to do just that.

Edited by Andrew Hayward

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Ethereum

Cryptocurrency liquidations surpass $200 million as Ethereum and Bitcoin plummet

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Bitcoin and Ethereum Tank as Crypto Liquidations Reach $150 Million

Cryptocurrency market liquidations hit their highest level in a week on Wednesday as the price of Bitcoin fell below $60,000.

Over the past 24 hours, over 74,000 traders have been liquidated for $208 million, CoinGlass the data shows it.

The majority of those losses, about $184 million, went to investors holding long positions who had bet on a price rise.

The largest liquidations hit Ethereum investors, at $55.5 million, almost entirely on long positions, the data showed.

Current issues surrounding US monetary policy, geopolitical tensions, and the upcoming US presidential election in November are expected to impact the price of the leading cryptocurrency throughout 2024.

Bitcoin abandoned The stock price fell from $62,200 to $59,425 intraday. The asset has since recovered its losses above $60,200, but is still down 3% over the past 24 hours.

In the meantime, Ethereum East down 3% During the same period, the stock price fell from a high of $3,425 on Wednesday to a low of $3,254. It is now trading at $3,300.

Solana, the world’s fifth-largest cryptocurrency by market capitalization, was the worst hit among the top 10 cryptocurrencies, down about 8% to $140. Solana had been riding high on New York investment management firm VanEck’s filing of its Solana Trust exchange-traded fund late last month.

Major cryptocurrencies have been falling over the past month. Ethereum has fallen more than 12% over 30 days despite growing interest in the launch of Ethereum spot ETFs.

Some analysts predict that new financial products could begin marketing in mid-Julywith at least one company predicting that the price of ETH will then take offBitcoin is down 12% over the same period.

Certainly, analysts always see further price increases this yearThe current market cooling represents a precursor to another major price surge in the coming months, Decrypt reported Monday.

On Wednesday, analytics firm CryptoQuant released a report examining Bitcoin Mining Metrics and highlighted the conditions for a return of prices to current levels.

Edited by Sebastian Sinclair.

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Ethereum

Volume up 90%: good for ETH price?

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Ethereum (ETH) has emerged as a beacon in the sea of blockchains, with a staggering 92% increase in decentralized application (dApp) volume over the past week. But the news comes with a layer of complexity, revealing a landscape of both opportunity and potential setbacks for the leading blockchain.

Cheap gas fuels the fire

Analysts attribute the explosion in decentralized application volume to the Dencun upgrade in March, which significantly reduced gas costs – the cost associated with processing transactions on the Ethereum network.

Lower transaction fees have always attracted users, and this recent development seems to be no exception. The surge in activity suggests a revitalized Ethereum that is likely to attract new projects and foster a more vibrant dApp ecosystem.

NFT craze drives numbers up

While overall dApp volume (see chart below) paints a positive picture, a closer look reveals a more nuanced story. This surge appears to be driven primarily by an increase in NFT (non-fungible token) trading and staking activity.

Source: DappRadar

Apps like Blur and Uniswap’s NFT aggregator have seen significant surges, highlighting the rise of the NFT market on Ethereum. This trend indicates a thriving niche in the Ethereum dApp landscape, but raises questions about the platform’s diversification beyond NFTs.

A look at user engagement

A curious problem emerges when looking at user engagement metrics. Despite the impressive increase in volume, the number of unique active wallets (UAWs) on the Ethereum network has actually decreased.

Ethereum is now trading at $3,316. Chart: TradingView

This disconnect suggests that current activity could be driven by a smaller, more active user base. While high volume is certainly a positive indicator, seeing broader user participation is essential to ensuring the sustainability of the dApp ecosystem.

A glimmer of hope ?

A positive long-term indicator for Ethereum is the trend of decreasing holdings on the exchange, as reported by Glass nodeThis suggests that ETH holders are moving their assets off exchanges, potentially reducing selling pressure and contributing to price stability.

If this trend continues, ETH could potentially target $4,000 this quarter or even surpass its all-time high. However, this price prediction remains speculative and depends on various market forces.

Ether price expected to rise in coming weeks. Source: CoinCodex

Ethereum at a Crossroads

Ethereum is at a crossroads. Dencun Upgrade has clearly revitalized dApp activity, particularly in the NFT space. However, uneven dApp performance and the decline of the UAW are raising concerns about the long-term sustainability of this growth. Network growth, measured by the number of new addresses joining the network, is also slowing, according to Santiment, which could potentially hamper wider adoption.

The short-term price outlook for ETH remains uncertain. While long-term indicators, such as declining exchange holdings, suggest potential for price appreciation, slowing network growth could lead to a price decline in the short term.

Look forward to

The coming months will be crucial for Ethereum. The platform must capitalize on the renewed interest in dApps by attracting a broader user base and fostering a more diverse dApp ecosystem beyond NFTs. Addressing scalability issues and ensuring user-friendly interfaces will also be essential to sustain growth.

If Ethereum can overcome these challenges, it has the potential to cement its position as the premier platform for decentralized applications. However, if it fails to adapt, other waiting blockchains could capitalize on its shortcomings.

Featured image from Pexels, chart from TradingView

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Ethereum

Ethereum, Bitcoin, and XRP Behind $1.5 Billion Losses in Cryptocurrency Scams

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Ethereum, Bitcoin, and XRP Behind $1.5 Billion Losses in Cryptocurrency Scams

The first half of 2024 has seen a surge in major hacks in the cryptocurrency sector. Ethereum (ETH)Bitcoin (BTC) and XRP have resulted in losses of over $1.5 billion due to cryptocurrency scams. This year, over 200 major incidents have resulted in losses of approximately $1.56 billion.

Cryptocurrency Scam Losses Reach $1.5 Billion

According to data from Peck Shield Alert, only $319 million in lost crypto funds have been recovered. Furthermore, this year’s losses represent a staggering 293% increase over the same period in 2023, when losses totaled $480 million.

Overview of Cryptocurrency Scams in 2024, Source: PeckShieldAlert | X

Additionally, DeFi protocols have been the top targets for hackers, accounting for 59% of the total value stolen. More than 20 public chains have suffered major hacks during this period. Additionally, Ethereum, Bitcoin, and XRP top the list for the amount lost via cryptocurrency hacks.

Additionally, Ethereum and BNB Chain were the most frequently targeted, each accounting for 31.3% of the total hacks. Meanwhile, Arbitrum followed with 12.5% of the attacks. One of the most significant incidents occurred on June 3, 2024.

Bitcoin DMMa major Japanese cryptocurrency exchange, reported a major breach. Attackers stole 4,502.9 BTC, worth over $300 million at the time. The incident highlighted the vulnerabilities of exchanges, especially those that handle large volumes of digital assets.

Major XRP, ETH and BTC hacks

A week after the DMM Bitcoin attack on June 10, UwU Loana decentralized finance (DeFi) lending protocol, was compromised. The breach resulted in a loss of approximately $19.3 million in digital assets. The hack underscores the ongoing risks associated with DeFi platforms, which often operate with less regulatory oversight. The platform later offered a $5 million reward to catch the hacker.

Earlier this year, on February 3, 2024, Ripple co-founder Chris Larsen confirmed a major security breach involving his personal wallets. Initially, rumors circulated that Ripple itself was targeted. However, Larsen clarified that the hack involved his digital wallets and not Ripple’s corporate assets.

The hackers managed to transfer 213 million XRP tokens, worth approximately $112.5 million. Additionally, on-chain detective ZachXBT first alerted the community about the suspicious transactions. In response to the theft, Larsen and various cryptocurrency exchanges took swift action to mitigate the impact.

Several exchanges, including MEXC, Gate, Binance, Kraken, OKX, HTX, and HitBTC, collaborated to freeze a significant portion of the stolen funds. Binance alone froze $4.2 million worth of XRP to aid in the investigation.

Additionally, on April 2, 2024, FixedFloat, a Bitcoin Lightning-based exchange, experienced a security breach. Unauthorized transactions resulted in financial losses exceeding $3 million. This incident highlighted ongoing security issues for FixedFloat, following a similar breach earlier in the year.

The company has also faced significant challenges securing its platform against repeated attacks. Additionally, in February, hackers stole $26 million worth of Ethereum and Bitcoin from FixedFloat. These digital assets were then transferred to exchanges for profit.

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Ethereum

Ethereum’s Year-Over-Year Revenue Tops Charts, Hitting $2.7 Billion

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Ethereum fees drop to seven-month low as L2 competition heats up

Ethereum blockchain has been in first place for a year incomesurpassing all major blockchains.

According to data provided by Lookonchain, Ethereum generated $2.72 billion in annual revenue, surpassing the Bitcoin network by a margin of $1.42 billion. The data shows that Bitcoin accumulated $1.3 billion in revenue over the same period.

Defi Llama Data watch that Ethereum is still the leader in decentralized finance (challenge) with a total value locked (TVL) of $58.4 billion, or 60.9% of the entire market. The blockchain recorded a 30-day fee revenue of $131 million, according to the data aggregator.

Bitcoin’s TVL is currently set at $1 billion.

The network of the second largest cryptocurrency, ETH, witness a 155% year-over-year increase in its fee revenue in the first quarter of this year, as the cryptocurrency market saw a bullish trend.

Tron comes in third with annual revenue of $459 million. Solana and BSC also recorded nine-figure revenues of $241 million and $176 million, respectively.

Notably, Tron is the second largest chain in the challenge scene with a TVL of $7.7 billion. BSC and Solana take third and fourth place with TVLs of $4.8 billion and $4.5 billion, according to Defi Llama.

Avalanche, zkSync Era, Optimism and Polygon reached the top 10 with $68 million, $59 million, $40 million and $23 million in year-over-year revenue, respectively.

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